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PEOPLE'S REPUBLIC OF CHINA AGREEMENT ON INTERNATIONAL TRADE IN COMMERCIAL SPACE LAUNCH SERVICES (AND ANNEXES)
MEMORANDUM OF AGREEMENT BETWEEN THE GOVERNMENT OF THE UNITED STATES OF
AMERICA AND THE GOVERNMENT OF THE PEOPLE'S REPUBLIC OF CHINA REGARDING
INTERNATIONAL TRADE IN COMMERCIAL LAUNCH SERVICES
I. PURPOSE
The Government of the United States of America (U.S.) and the Government of the
People's Republic of China (PRC) (hereinafter the "Parties") have entered into
this Memorandum of Agreement (Agreement) ,of which the attached Annexes are an
integral part, to address certain issues regarding international trade in
commercial launch services including continued PRC participation in the
international market for commercial launch services. Nothing in this Agreement
applies to launches of payloads for military purposes or for use in the
non-commercial, civilian space programs of either Party including programs using
spacecraft or satellites made by or for the use of the Government of the PRC.
II. TRADE ISSUES AND MARKET PARTICIPATION
The Delegation of the People's Republic of China and the Delegation of the
United States of America held 5 rounds of negotiations in Beijing and
Washington, D.C. As a result of these discussions, the parties believe that the
entry of PRC commercial launch services into the international market has
facilitated cooperation between the PRC and the U.S. in the space area, and
agree that certain measures are appropriate to address certain issues regarding
international trade in commercial launch services, including continued PRC
participation in the international market for commercial launch services.
Accordingly, after mutual and friendly consultations, the U.S. and the PRC have
agreed as follows:
A. The U.S. and the PRC support the application of market principles to
international competition among providers of commercial launch services,
including the avoidance of below-cost pricing, government inducements, and
unfair business practices.
B. The PRC shall continue to take steps to ensure that providers of commercial
launch services controlled by or operating within the territory of the PRC do
not materially impair the smooth and effective functioning of the international
market for commercial launch services.
(i) Among these steps, the PRC shall ensure that any direct or indirect
government support extended to its providers of commercial launch services is in
accord with practices prevailing in the international market.
(ii) The PRC providers of commercial launch services shall not launch more than
11 principal payloads to geosynchronous earth orbit or geosynchronous transfer
orbit for international customers during the period of this Agreement, excluding
Apstar II, Asiasat II, Intelsat 708 and Echostar I, which were reviewed and
determined to be covered by the provisions of the 1989 Memorandum of Agreement.
Any satellite launched by PRC providers that is entirely leased on orbit to
international customers (pursuant to a commitment between the PRC and such
customers) represents a launch of a principal payload for purposes of this
Agreement. If not entirely leased on orbit to international customers, such a
satellite may represent a launch of a principal payload if the satellite's
capacity is primarily leased to international customers, depending upon the
circumstances and facts of a particular case.
(iii)(a) The United States and the PRC take note of the potential emergence of
the market for launches to low-earth -orbit (LEO) since 1989 as a separately
identifiably commercial market with its own particular characteristics. It is
still under development and is closely related to rapid evolution of the
satellite market, and telecommunications market. The two parties further note
that participation of its providers of commercial launch services in an
appropriate manner in this market segment will contribute to, rather than
detract from, the development of this market segment.
(b)Taking into account the current predictions for the growth in, and structure
of, the LEO market, the United States recognizes that the participation of PRC
launch services providers in that market segment could be substantial, so long
as that participation is consistent with the provisions of this Agreement. The
PRC states that its participation in the LEO market shall be consistent with the
provisions of the agreement and with significant U.S. participation in the
development of the LEO market and agrees to take steps to ensure that such
participation will be proportionate and non-disruptive.
(c) If either party believes that the other party is participating, or may
participate in this market in a manner inconsistent with its commitments under
the agreement, the parties shall meet pursuant to the consultations provided for
under Article IV(2) to ascertain the facts of the situation and take appropriate
corrective action. In assessing the effect, or potential effect of PRC
participation in the LEO market relative to its commitments in this Agreement,
the United States Government will be guided, inter alia, by the following
factors:
1) The extent and growth of overall PRC and U.S. participation in the LEO
market;
2) With respect to proposals to deploy LEO satellite constellations, the extent
of participation by U.S., PRC, and third country launch service providers - in
particular, whether the overall level of participation by launch service
providers in countries with whom the U.S. has concluded a bilateral launch
services agreement (measured according to distribution of payloads) in the
deployment of any single LEO communications satellite constellation greater than
the participation of market economy launch service providers. The following
factors should, inter alia, also be taken into account:
- the extent of PRC and U.S. participation in the deployment;
- launch scheduling requirement and the need optimize launch vehicle selection
to meet deployment or operational requirements;
- the availability of competitively-priced market economy launches to meet these
requirements;
- opportunities made available to the parties for participation in the
replacement market;
- reasonable considerations by the proposed system operator regarding commercial
risk sharing;
- customers requirements.
(iv) The PRC agrees that its provider of commercial launch services shall offer
and conclude any contracts to provide commercial launch services to
international customers (including sole source or directed procurements) at
prices, terms, and conditions which are on a par with those prices, terms and
conditions prevailing in the international market for comparable commercial
launch services offered by commercial launch services providers from market
economy countries, including the United States.
(a) When the differential between a bid, offer or contract by a PRC launch
services provider and the bid, offer or contract by a commercial space launch
services provider from a market economy country, including the U.S., to provide
the commercial space launch services described in subparagraph (ii) above is
less than 15 percent, it shall be assumed, unless information is provided to the
contrary, that such bid, offer, or contract is consistent with subparagraph (IV)
and that no special consultations are needed. When the differential between a
bid, offer or contract by a Chinese launch service provider and the bid, offer
or contract by a commercial space launch services provider from a market economy
country, including the U.S., is greater than 15 percent and after taking into
consideration the comparability factors described in Annex II, the U.S. believes
that China's launch service prices are not consistent with subparagraph (iv) ,
the parties shall have special consultations under Article IV of this agreement.
(b) With respect to the commercial launch services described in subparagraph
(iii) above, the Parties agree to undertake a detailed examination on a per
payload basis, of the factors affecting the comparability of bids, offers or
contracts for such services with a view towards completing this examination by
the end of 1995.
(v) It, after consultations, both parties agree, the PRC may offer an
introductory price on only the first test flight of a new type of launch
vehicle.
(vi) The PRC agrees that any commitments to provide commercial launch services
to international customers by PRC launch service providers shall be
proportionally distributed over the period of the Agreement. To this end, the
PRC shall make its. best efforts to prevent a disproportionate concentration of
such commitments during any two-year period of the Agreement. The PRC may make
commitments in any three-year period of the Agreement consistent with
subparagraph II B (ii) above. The PRC shall seek to ensure that PRC launches of
principal payloads for international customers are performed as scheduled in the
original launch commitment.
(vii) The PRC agrees to require its launch service or insurance providers to
offer international customers any insurance or reflight guarantees on a par with
prevailing rates and practices in international markets for comparable risk.
C. The U.S. stated that the U.S. does not provide government inducements of any
kind in connection with the provision of commercial launch services to
international customers which would create discrimination against launch service
providers of other nations and has no intention of providing such inducements in
the future. Accordingly, the PRC stated it agreed not to offer inducements of
any kind in connection with the provision of commercial launch services to
international customers which would create discrimination against launch service
providers of other nations.
III. NONDISCRIMINATION
The U.S. stated that U.S. providers of commercial launch services do not
discriminate unfairly against any international customers or suppliers and that
it is not U.S. Government policy to encourage any such unfair discrimination by
U.S. providers of commercial launch services. Accordingly, in implementing its
commitments under this Agreement, the PRC shall require that its providers of
commercial launch services not discriminate unfairly against any international
customers or suppliers.
IV. CONSULTATIONS
1. The PRC and U. S. will consult annually with respect to the obligations in
this agreement - in particular, the implementation of Article II(B)(ii), (iii),
and (iv), including the nature and extent of direct and indirect government
support provided to commercial launch services providers and developments--in
particular, those described in Paragraph 3 below--in the international market
for commercial launch services.
2. In addition, each party undertakes to enter into special consultations within
thirty (30) days of a request by the other party to discuss matters of
particular concern.
In particular, special consultations will he held to review the situation in
which there is an absence of Western launch availability due to full manifests
or launch failures during the required launch period (generally within three (3)
months before and after the preferred launch date), if the PRC has reached the
limitation set out in Article II(B)(ii), or if the bunching provisions
established in Article II(B)(vi) would apply to prevent the launch of a
satellite. If information is provided which verifies, to the satisfaction of the
U.S., that the situation described above exists, the U.S. may increase the
quantity restriction of available launches established under Article II(B)(ii)
or relax the bunching provision set out in Article II(B)(vi) to permit the
satellite to be placed on the PRC launch vehicle manifest for launch.
3. Semiannually, the limitation on the total number of satellites for
international customers that may be launched by PRC providers of commercial
launch services will be reviewed by both parties and, if appropriate, adjusted
to reflect changes in the demand for launch services (including changes arising
from a projected absence of Western launch availability over an extended period)
upon request of the PRC in light of developments in the commercial launch
services market.
Among the developments which would justify favorable reconsideration and cause
the U.S. and the PRC to raise the quantity restriction established under Article
I (B)(ii) and/or relax the bunching provision under Article II(B)(vi) are;
(a) development of the market for commercial space launch services to GEO that
is significantly greater than the estimated average over the life of the
agreement of 12--15 commercial launches per year upon which the limitation set
out in Article II(B)(ii) is based, taking into account PRC compliance with its
commitment under the agreement; or
(b) the development of a commercially viable project for satellite services that
fundamentally changes demand for launch services.
If the parties agree that either of the above conditions exist, the U.S. may
increase the quantity restriction established under Article II(B)(ii) and/or
relax the bunching provision set forth in Article II (B)(vi) to satisfy the
change in demand for launch vehicles for GEO satellites.
4. With respect to Article II(B)(ii), if the average annual number of commercial
launches subject to the provisions of Article II B (ii) (including launch
failures) is 20 or more over the first three years of the agreement, or if the
two governments, by mutual agreement, conclude that commitments (as defined in
Annex I) for such launches indicate that average annual launches of 20 or more
will occur during that three year period, then the quantitative limit contained
in Article II(B)(ii) shall be increased to 13.
If the average annual number of commercial launches subject to the provisions of
Article II(B)(ii) (including launch failures) is 20 or more over the first four
years of the agreement or, if the two governments, by mutual agreement, conclude
that commitments for such launches indicate that average annual launches of 20
or more will occur during the first four years of the agreement, then the
quantitative limit contained in Article II(B)(ii)shall be increased to 16.
5. If the U.S. independently determines that any of the conditions listed in
paragraphs 2 or 3 of this Article have been met, the U.S. may unilaterally raise
the quantity restrictions set out in Article II(B)(ii) or relax the bunching
provision described in Article II(B)(vi). Before such action, the U.S. shall
notify the PRC of its intent to act unilaterally, and the PRC shall have thirty
(30) days in which to respond to the proposed U.S. action. If the PRC does not
object within thirty (30) days, the U.S. may take unilateral action to increase
the quantity restriction or relax the bunching provision.
6. The U.S. and the PRC agree to work toward a common understanding of the
application of market principles to prices, terms and conditions of commercial
launch services for international customers.
7. To facilitate the annual consultations, the U.S. and the PRC agree to
exchange information as follows:
(a) The U.S. shall each year in advance of such consultations provide to the PRC
such publicly releasable information as it possesses with respect to prices,
terms and conditions prevailing in the international market for commercial
launch services.
(b) The PRC shall each year in advance of such consultations provide
comprehensive information to the U.S. regarding prices, terms, and conditions
offered by PRC providers of commercial launch services for the launch of
satellites. The PRC may also provide other information that it believes may have
a material effect on pricing practices at PRC providers of commercial launch
services.
(c) The PRC may request that the U.S. provide additional publicly releasable
information with respect to international prices, terms, and conditions, and may
in addition request U.S. views regarding prevailing international market
conditions and likely future developments, as well as government supports or
inducements. The U.S. shall respond to such requests within thirty (30) days.
If such information cannot be provided directly because of business
confidentiality, the U.S. shall provide such information in summary form.
(d) The U.S. may request additional information with respect to the prices,
terms, and conditions offered by PRC providers of commercial launch services and
any PRC government supports or inducements. The PRC shall respond to such
request within thirty (30) days. If such information cannot be provided directly
because of business confidentiality, the PRC shall provide such information in
summary form.
(e) The U.S. and the PRC shall keep all information received from each other
under this paragraph strictly confidential and shall not provide it to any other
government or any private person without the written consent of the other.
8. The U.S. and the PRC shall also provide each year, in advance of the annual
consultations, information on a consolidated basis concerning the commitments
their launch service providers have undertaken to provide commercial launch
services for international customers. This information may be made publicly
available.
9. If a launch of a satellite for an international customer will not be
performed as scheduled, the PRC shall notify the U.S. regarding the reasons for
the delay and the new date for the launch as soon as possible.
10. It is understood that the U.S. and the PRC will review the information
contained in this Article during annual consultations in the context of
developments in the international market for commercial launch services.
V. CLARIFICATION OF RIGHTS AND OBLIGATIONS
1. If, after friendly consultations with the PRC, the U.S. determines that there
is clear evidence that the provisions at this Agreement have been violated, the
U.S. reserves its right to take any action permitted under U.S. laws and
regulations, taking into account the harm caused to U.S. interests under the
Agreement. The U.S. shall seek to avoid actions inconsistent with this
Agreement.
2. With regard to export licenses, any applications for a U.S. export license
will be reviewed on a case-by-case basis consistent with U.S. laws and
regulations. Nothing in this Agreement shall be construed to mean that the U.S.
is constrained from taking any appropriate action with respect to any export
license, consistent with U.S. laws and regulations. Nevertheless, the U..S. will
do its utmost to assure, consistent with U.S. laws and regulations, continuity
of issued license(s) and the completion of the transactions covered in such
license(s).
VI. DISCUSSIONS ON INTERNATIONAL RULES
The U.S. and the PRC are prepared to enter into discussions with other
interested parties on comprehensive international rules with respect to
government involvement in and other matters relating to the international market
for commercial launch services. It is understood, however, that nothing in this
Agreement shall prejudice any position on any issue that either the U.S. or the
PRC may take in those discussions.
VII. COMPREHENSIVE REVIEW
The U.S. and the PRC shall complete a comprehensive review of the term and
operation of this Agreement by mid-1998.
VIII. ENTRY INTO FORCE
This Agreement shall enter into force on January 1, 1995 and shall remain in
force until December 31, 2001. It may be terminated at any time by mutual
agreement international agreement on government involvement in, and other
matters relating to, the international market for commercial launch services or
under such other circumstances as may be mutually agreed.
IN WITNESS WHEREOF, the undersigned, being duly authorized by their respective
Governments, have signed this
Agreement.
DONE at _______________, in duplicate, in the English and Chinese languages,
both texts being equally authentic this
________________________.
For the Government of the United States of America:
For the Government of the Peoples Republic of China:
____________________ ________________________
ANNEX I
The following agreed definitions constitute an integral part of the Memorandum
of Agreement between the Government of the United States of America and the
Government of the People's Republic of China Regarding International Trade in
Commercial Launch Services of ___________________.
1. "Commercial space launch services" means commercially offered or provided
services to launch into space any spacecraft or satellite, including but not
limited to communications satellites, for an international customer. All types
or classes of launch vehicles that may be used by a Chinese space launch service
provider to provide commercial space launch services are subject to this
Agreement.
2. "PRC space launch service providers" means any PRC entity, or agent or
instrumentality acting on its behalf, permitted by the government of the People
s Republic of China to provide commercial space launch services or the space
launch vehicles for such services.
3. "International customer" refers to the following:
(a) any person, or any kind of corporation, company, association, venture,
partnership, or other entity, whether or not organized for pecuniary gain, or
privately or governmentally owned or controlled other than those institutions or
entities which are owned or controlled by PRC nationals and provide
telecommunications services primarily to the Chinese domestic market; or
(b) any governmental body, excluding the Government of the United States of
America and the Government of the People's Republic of China; or
(c) any international organization or quasi-governmental consortium, including
but not limited to INTELSAT, INMARSAT, or their respective legal successors;
which is the ultimate owner or operator of a spacecraft or satellite or which
will deliver a space craft or satellite orbit for use by such ultimate owner or
operator.
4. "Commitment" means any agreement by an international customer with a provider
of commercial launch services to launch a principal payload, which effectively
removes the launch from international commercial competition. The term
commitment" does not include reservation agreements .
5. "Comparable commercial space launch services" means commercial space launch
services offered to launch a spacecraft of the weight class that is the subject
of a launch competition sole source or directed procurement, taking into
consideration relevant factors that may be considered when evaluating the
prices, terms and conditions of such services, including, but not limited to,
such factors as intended orbit, risk management, financing, satellite lifetime
on orbit and integration costs.
6. "Government inducements" with respect to a particular launch services
transaction include, but are not limited to, unreasonable political pressure,
the provision of any resources of commercial value unrelated to the launch
service competition and offers of favorable treatment under or access to defense
or national security policies or programs, development assistance policies or
programs, and general economic policies or programs (e.g., trade, investment,
debt, or foreign exchange policies).
7. "Unfair business practices" means the making of any offer, payment, promise
to pay, promise or offer of anything of value or the authorization of the
payment of anything of value, or any promise to make such payment, to any
official, individual, or any other entity for the purpose of obtaining or
retaining business for or with or directing business to, any person, including
making payment to a person while knowing that all or a portion of the payment
will be offered, given or promised, directly or indirectly, to any official,
individual or any other entity for the purposes of obtaining or retaining
business.
8. "Geosynchronous earth orbit means an orbit approximately 19,400 nautical
miles (35,900 kilometers) above the surface of the earth at the equator in which
a payload completes one earth orbit in a 24-hour period, holding a fixed
position above the earth.
9. "Geosynchronous transfer orbit" means a temporary orbit used to reposition a
spacecraft or satellite into a geosynchronous earth orbit.
10. "Low earth orbit" means, for purposes of this agreement, any orbit below
geosynchronous earth orbit.
11. "Principal payload" means a telecommunications satellite, or, in the absence
of a telecommunications satellite, any other spacecraft or combination of
spacecraft.
12. "Sole source or directed procurement" means any agreement where the launch
services customer does not hold a competition and selects a supplier with whom
to negotiate a launch services agreement.
13. A "new type of launch vehicle" must have significantly higher risk for the
first launch than other launch vehicles already in production in order to
qualify for a "test flight" price. Significantly higher risk results only from
major changes to high risk systems such as the propulsion of an avionics
systems. Accordingly, a "new type of launch vehicle" is one in which a majority
of the primary systems (e.g., propulsion, end-to-end avionics, primary
structure) and a majority of the component subsystems (e.g. strap-on boosters,
guidance package, interstage adaptor) have been redesigned or significantly
modified, resulting in a new untested capability not previously available on
that vehicle. Minor vehicle enhancement, such as an enlarged fairing, upgraded
software, extended propellant tanks, a modified payload or interstage adaptor,
or a slightly modified electrical system would not by themselves represent a
redesign or a significant modification for purposes of determining a new
vehicle.
Annex II: Pricing Comparability Factors for Commercial Launch Services to GEO
Both parties agreed to the six factors comparing or evaluating launch services
in the international market. Such factors can often explain legitimate
distinctions in the price offered for the launch of a particular payload
relative to market economy providers of commercial launch service.
For each factor, a brief description is provided along with average ranges
representing the impact that the factor could have on the ultimate price, to the
customer when applied in a competition. These cost ranges represent the values
associated with the factors for contracts involving PRC launch providers in the
international commercial launch services market. The particular value associated
with a given comparability factor may be higher or lower than the ranges
discussed below for a specific case. Such a value can be used if it can be
definitely established after examination of the actual circumstances in that
case.
During annual consultations the ranges for each factor shall be evaluated to
determine if they have changed.
Intended Orbit: Based on delivery orbit for launch provider and provider of
Perigee Kick Motor (PKM).
Resolution: Both sides agreed that recent contracts involving the purchase of a
PKM by the customer have resulted in additional costs of $6 to $7 million (USD)
for the purchase of the PKM alone.
Integration and risk management costs for the pavload,/PKM will be included in
this factor, when appropriate. To the that integration and risk management costs
for the pavload vehicle and PKM/vehicle exist, they already are included in the
additional costs and risk management factors discussed below. In some cases this
factor may also reflect certain discounts representing customer preferences for
GTO delivery, rather than LEO delivery.
Risk Management : Addresses potential differences in insurance prices for the
customer (and different forms of risk management, such as political risk
insurance).
Resolution: Both sides agreed that the basic risk management insurance rates for
PRC vehicles can be 1 to 4 percent higher than the rates for market economy
vehicles, depending upon the particular vehicles in question (relative rates can
also vary greatly on the basis of a vehicle's recent performance). However, this
difference in rates does not always result in significantly different
absolute premiums for the customer depending on the difference in launch service
prices and satellite costs. It was also agreed that (in addition to differing
vehicle characteristics) factors such as political risk may be considered in
this calculation, if appropriate.
Additional Costs : Integration costs address different types of payload vehicle
and or PKM vehicle integration costs and mission software hardware modification
costs. Launch support costs involve extra transportation expenses, security
costs, extra equipment, and personnel support.
Resolution: Both sides agreed that the total costs for this factor range between
$4 and $6 million.
Vehicle Lift Ensures comparison of vehicle classes providing similar
performance.
Capacity:
Resolution: Both sides agreed that 1ift capability may sometimes be applied as a
comparability factor due to differences in vehicle prices from one class of
performance to the next.
Payment Conditions and Terms : Related to various payment and financial
conditions or incentives.
Resolution: The issue centers on the economics of the customers financial
position. A lower total cost is determinate in instances where a customer is
cash- rich. On the other hand, a launch provider's ability to offer favorable
credit terms which would produce a favorable payment schedule, may be more
important in cases where the customer has credit limitations.
In cases where favorable credit terms are not possible, a flexible payment
schedule still can be a powerful incentive. Since both sides have the capabilitv
to offer credit, they agreed that payment conditions and terms should be
considered as comparability factors, when appropriate.
Lifetime: Addresses impact of different satellite lifetimes resulting from
launch services.
Resolution: Both sides agreed that the use of some PRC launch vehicles can
result in satellite lifetimes that are 1 to 2 1/2 years less than launches on a
market economy vehicle, though in some cases there may be no impact on satellite
lifetime. Evaluation of this factor is complex and must be done on a
case-by-case basis. Additional elements such as intended (or desired) satellite
lifetime, cost per transponder, number of transponders, etc., must also be
considered.
AGREED MINUTES
FIFTH ROUND NEGOTIATIONS
U.S.-CHINA SPACE LAUNCH AGREEMENT
January 24-27, 1995
On January 27, 1995 , the China and U.S . Commercial Space Launch government
delegations concluded negotiations on the provisions of a renewed agreement. The
new agreement was initialed by AUSTR for Industry Donald M. Phillips for the
United States and Sun Jiadong of the China national Space Administration,
subject to a final review and comparison of the U.S. and Chinese texts. It is
the intention of both delegations to have the final text signed within one month
at a location to be named later.
______________ _________________
Donald M. Phillips Sun Jiadong
AUSTR for Industry, President, Science & Technology
Office of the U.S. Trade Commission, Representative China National Space
Administration
ANNEX III: Pricing Comparability Factors for Commercial
Launch Services to Low Earth Orbit
The Government of the United States of America and the Government of the
People's Republic of China hereby agree, with respect to the Memorandum of
Agreement Between the Government of the United States of America and the
Government of the People's Republic of China Regarding International Trade in
Commercial Launch Services, signed in Beijing, on March 13, 1995, as follows:
Provision II (B)(iv)(b) of the Memorandum of Agreement's hereby amended as
provided in the attached "Annex III: Pricing Comparability Factors for
Commercial Launch Services to Low Earth Orbit."
DONE at Washington, this twenty-seventh day of October 1997, in duplicate in the
English and Chinese languages, both texts being equally authentic. This
Agreement shall enter into force upon signature.
FOR THE GOVERNMENT OF FOR THE GOVERNMENT OF THE UNITED STATES OF AMERICA:
THE PEOPLE'S REPUBLIC OF CHINA:
Both parties agreed to the following six factors for comparing or evaluating Low
Earth Orbit (LEO) launch services and prices offered to customers in the
international market for commercial launch services. Such factors, when applied
to an examination of a particular LEO launch competition, can explain legitimate
distinctions in the prices offered for a LEO launch by PRC and market economy
providers of LEO commercial launch services.
For each factor, only a brief description is provided. It is not possible to
include quantitative ranges at this time due to the current lack of data and
experience pertaining to the commercial deployment of satellites to LEO
(especially in the case of multiple-satellite LEO constellations.) The actual
assignment of quantitative ranges for each factor will represent an important
part of the ongoing implementation of the MOA, as data and experience with
commercial LEO launches increases. In addition, it may be appropriate to review
periodically the relevant comparability factors. At the same time, market
pricing trends will be rnonitored to determine if orbital insertion accuracy
evolves as a typical factor in LEO commercial launch pricing, or if the
government license procedures become a quantifiable factor for explaining
differences in LEO commercial launch pricing relative to the LEO pricing
disciplines of the MOA.
Single and multiple-manifested launches to LEO can often involve different
mission or contractual characteristics, especially in the case of LEO
constellation deployment. Consequently, separate language is provided below for
the two types of missions (when appropriate.)
Comparability Factor Description
Risk Management Addresses potential differences in insurance prices for
customer, based on vehicle and scheduling reliability (as well as other forms of
risk management, such as political risk insurance.) For multiple-manifested
missions, two additional
considerations may affect the application of this factor: 1) the total number of
satellites covered by the risk management package (and how this coverage relates
to the number of satellites that might fail in a particular launch); and 2) the
uncertainty in performance for such launches (for all providers) given the
newness of this type of commercial mission.
Payment Relates to various payment and financial conditions or Conditions/Terms
incentives that may be offered as part of a launch services bid (governed by the
provisions of any relevant trade agreements and OECD guidelines.)
Additional Costs
-- Integration Costs For single-manifested missions, this factor addresses
different types of payload/vehicle integration costs.
For multiple-manifested missions, it will relate to the integration of several
payloads to a "dispenser," which is then mated to the vehicle. In both cases, it
can involve mission software/hardware modifications necessary for the mission.
--Launch Support Involves extra transportation expenses, security costs, extra
equipment, and
personnel support costs (relative to Western launches) due to launching in the
PRC. For multiple- manifested missions, it is still unclear how such costs will
compare to the levels typically seen for GEO launches (due to differences in
support philosophy and requirements.)
Dispenser Development For multiple-manifested missions only, relates to the
impact of the dispenser development on the overall launch services price. This
factor will typically be a function of the maturity of the dispenser design and
the number of times that it has been used (e.g., it must be determined whether
the bid reflects the development of a new dispenser for the launch -- including
any adjustments to the launch vehicle itself necessary to accommodate the new
dispenser -- or simply minor changes to an existing dispenser design.)
Fairing Size Considers possibility that vehicle might have insufficient fairing
size (in terms of dimensions and internal volume) to accommodate customer's
preferences for number of satellites per launch (potentially forcing customer to
pursue other options.) This issue should be considered, when applicable, in
comparisons of vehicles with comparable lift capability.
Multiple Launch For multiple launches Supporting LE0 constellations, addresses
possibility that price discounts maybe offered (by launch provider) in exchange
for commitments to higher numbers of launches on a specific vehicle and for a
particular constellation (either for deployment or replacement), yielding
production economies.
This
material is produced independently for NTI by the James Martin
Center for Nonproliferation Studies at the Monterey Institute of
International Studies and does not necessarily reflect the
opinions of and has not been independently verified by NTI or
its directors, officers, employees, agents. Copyright © 2007 by
MIIS.
