SORT: 3230.03
DOCI: DODD 3230.3
DATE: 19861014
TITL: DODD 3230.3 DoD Support for Commercial Space Launch Activities, October
14, 1986, USDR&E, thru Ch 1, March 7, 1988
Refs:(a) Public Law 98-575, "Commercial Space Launch Act," 49 U.S.C. 2601-
23, October 30, 1984
(b) National Security Decision Directive 94, "Commercialization of
Expendable Launch Vehicles," May 16, 1983
(c) Interim Final Licensing Regulations, 14 CFR CH. III, Vol 51, No. 38,
6870-83, February 26, 1986
(d) Secretary of Defense approval of March 26, 1985 SAF/US Memorandum to
Secretary of Defense, April 4, 1985
(e) Secretary of Defense Memorandum, "Commercialization of Expendable
Launch Vehicles (ELV)," April 18, 1984
(f) DoD Directive 3200.11, "Major Range and Test Facility Base,"
September 29, 1980
(g) through (m), see enclosure 1
A. PURPOSE
1. This Directive implements references (a), (b), and (c) and the guidance
contained in references (d), (e), and (f) by establishing policies,
procedures and waivers to be used in providing DoD support for commercial
expendable space launch activities.
2. This Directive sets policy for assisting and consulting with the
Department of Transportation (DoT) on requirements concerning public
health and safety, safety of property, and national security.
B. APPLICABILITY
This Directive applies to the Office of the Secretary of Defense (OSD);
the Military Departments; the Organization of the Joint Chiefs of Staff
(OJCS); the Unified and Specified Commands; Inspector General, Department
of Defense (IG, DoD); and the Defense Agencies (hereafter referred to
collectively as "DoD Components").
C. DEFINITIONS
1. Launch Property. Propellants, launch vehicles and components thereof,
and other physical items (e.g., launch facilities) constructed for, or
used in, the launch preparation or launch of a launch vehicle.
2. Launch Services. Those activities involved in the preparation of a
launch vehicle and its payload for launch and the conduct of a launch.
3. Person. Any individual and any corporation, partnership, joint venture,
association, or other entity organized or existing under the laws of
the United States.
D. POLICY
It is DoD policy to:
1. Encourage the U.S. private sector development of commercial launch
operations.
2. Endorse fully and facilitate the commercialization of U.S. Expendable
Launch Vehicles (ELV's), consistent with U.S. economic, foreign policy and
national security interests.
3. Assist the Department of Transportation, Office of Commercial Space
Transportation, in implementing and achieving the objectives of the
Commercial Space Launch Act (reference (a)) and the Interim Final
Licensing Regulations (reference (c)).
4. Require appropriate reimbursement from persons authorized to acquire
DoD launch property or launch services. (See enclosure 2.)
5. Implement those policies and waivers (enclosure 3) granted for support
of commercial expendable launch vehicles, as approved by the Secretary of
Defense. Any further deviations (waivers) necessary in support of
commercial space launch activities will be submitted in accordance with
the Federal Acquisition Regulation (FAR) and the DoD FAR Supplement,
subpart 1.4 (reference (g) and (h)).
a. Direct cost for support provided to commercial space launch activities
was implemented effective April 24, 1985, except for transactions already
substantially completed on that date and meeting the criteria of reference
(a). The use of a direct cost pricing for launches of non-DoD ELV's prior
to FY 86 will only apply to those launches that have not been included in
the budget planning.
b. In accordance with reference (a), U.S. Commercial ELV operators may be
provided use of DoD-owned equipment not needed for public use or on a non-
interference basis. Cost for this use will be direct cost (including any
specific wear and tear and damage to the property) the Government incurs
as a result of such use. Government-owned production facilities or
equipment will be made available on a similar basis, with terms to be set
on a contract-by-contract basis by the Secretary of the Air Force with
agreement of the affected Service Secretary. If purchase of excess
government-owned equipment is requested by a U.S. Commercial ELV operator,
it will be accomplished under a waiver obtained from the General Services
Administration. The Air Force, with support of the Service who owns the
equipment to be purchased, will be the agent of the government to conduct
the sales transaction.
c. The use of DoD employees in quality assurance (QA) or contract
administration services (CAS) positions (e.g., Defense Contract
Administration Services Regions (DCASRs), Air Force Contract Management
Division (AFCMD)) in direct employment of "for profit" manufacturers of
ELV's is not in the Government's best interest. No DoD personnel may
perform functions listed as contract administration functions in the
Federal Acquisition Regulation (reference (g)) under the commercial ELV
program, except to assure that commercial ELV's are produced to standards
that would permit DoD use of an ELV far priority national security
missions.
E. RESPONSIBILITIES
1. The Deputy Under Secretary of Defense for Strategic and Theater Nuclear
Forces(DUSD(S&TNF)) has the primary responsibility for providing DoD
coordination to the DoT on matters arising from the commercial operations
of expendable launch vehicles (ELV's) that affect national security
interests of the United States.
2. The Assistant Secretary of Defense (Comptroller) (ASD(C)) shall have
primary responsibility for establishing procedures associated with the
pricing and disposition of collections concerning DoD support for
commercial launch activities (enclosure 2) and providing additional
guidance to the DoD Components as necessary.
3. The Secretary of the Air Force has primary responsibility for
establishing procedures within the DoD Components and with other agencies
regarding the use of DoD launch property and launch services by the
private sector.
4. The Heads of DoD Components shall:
a. Take actions at the request of the Secretary of the Air Force in
furthering the objectives of the Commercial Space Launch Act (reference
(a)).
b. Implement the procedures for pricing and disposition of collections as
defined by the ASD(C) in enclosure 2.
c. In consultation with the DoT, establish such liability insurance
requirements, hold harmless agreements, and other assurances as are
necessary to ensure full protection of the Government's interests.
d. Consult with the DoT regarding those requirements involving DoD
facilities, activities, or concerns to ensure public health and safety,
and the safety of property, as related to the commercial operation of
ELV's.
e. Ensure that commercial operators comply with the safety requirements
at the Test Ranges/Centers in accordance with the responsibilities under
DoD Directive 3200.11 (reference (f)).
f. Identify to the DUSD(S&TNF) those national security interests of the
United States that may be affected by proposed commercial space launch
activities.
F. EFFECTIVE DATA AND IMPLEMENTATION
This Directive is effective immediately. DoD Components shall forward two
copies of implementing documents to the Deputy Under Secretary of Defense
for Strategic and Theater Nuclear Forces within 180 days.
William H. Taft Deputy Secretary of Defense
Enclosures - 3 1. References 2. Pricing and Disposition of Collections for
Commercial Space Launch Program 3. DoD Waivers
REFERENCES (Cont'd)
(g) Federal Acquisition Regulation (FAR), April 1, 1984
(h) DoD Supplement to the Federal Acquisition Regulation, April 1, 1984
(i) DoD Instruction 7310.1, "Disposition of Proceeds from Sales of DoD
Excess and Surplus Personal Property," November 15, 1984
(j) DoD Directive 7200.1, "Administrative Control of Appropriations," May
7, 1984
(k) DoD Instruction 7230.7, "User Charges," January 29, 1985
(l) DoD Directive 2140.2, "Recoupment of Nonrecurring Costs on Sales of
U.S. Products and Technology," August 5, 1985
(m) Title 40, United States Code, Section 484
Pricing and Disposition of Collections for Commercial Space Launch
Program
A. PRICING. Reimbursement charges for persons acquiring space launch
property or launch services are as follows:
Type of Acquisition Launch Property Launch Services
Sale or transaction in Fair market value Direct costs lieu of sale Lease
Direct costs Direct costs Other Direct costs Direct costs
1. Launch Property.
a. Fair market value will be applied, subject to two constraints:
(1) All sales should guarantee a reasonable return to the Federal
Government; and
(2) The Federal Government should provide no direct subsidies.
b. Leases. Direct costs shall be based on the sum of:
(1) The direct costs incurred by the Department of Defense in providing
the equipment, and
(2) The direct costs required to replace or restore the property or site
to its condition before the lease or use.
2. Launch Services. The reimbursement shall equal the direct costs
incurred by the Department of Defense, unambiguously identified with the
particular launch support. Direct costs include United States Government
civilian and contractor labor, material, minor construction, utilities,
equipment, supplies, transportation, and any other resources damaged or
consumed in providing the launch services. Direct costs, including DoD
labor, shall be costed in accordance with paragraph E.3.a. of DoD
Directive 3200.11 (reference (f)).
B. DISPOSITION OF COLLECTIONS.
1. Collections for sale of excess launch property shall be deposited into
Miscellaneous Receipts Accounts in accordance with DoD Instruction 7310.1
(reference (i)).
2. Collections for DoD services and nonexcess property shall be credited
to the most current applicable component financing appropriation, from
which the cost of providing such services or property was paid.
C. RECOGNITION OF BUDGET AUTHORITY. Budget authority shall be recognized
in accordance with subsection 1.4. of DoD Directive 7200.1 (reference
(j)).
DOD WAIVERS
1. DoD Directive 3200.11, "Major Range and Test Facility Base" (reference
(f)). Waive paragraphs E.3.b., E.3.c. for all U.S. Government and U.S.
commercial ELV launches. Pricing for all U.S. Government and U.S.
commercial ELV launches will comply with paragraph E.3.a. on direct cost.
2. DoD Instruction 7230.7, "User Charges," (reference (k)). Waive
recoupments from U.S. commercial ELV operators for other than direct
costs.
3. DoD Directive 2140.2, "Recoupment of Nonrecurring Costs on Sales of
U.S. Products and Technology" (reference (l)). Waive recoupments from U.S.
commercial ELV operators required by DoD Directive 2140.2 (reference (l)).
4. DoD FAR Supplement, Subpart 35.71, "Recovery of Nonrecurring Cost on
Commercial Sales of Defense Products and Technology," (reference (h)).
Waive recoupments of nonrecurring and development cost for Government ELV
development from U.S. commercial ELV operators required by DoD FAR
Supplement Subpart 35.71 (reference (h)).
5. FAR para 45.407(a) (was DAR 13-404), "Non-Government use of Plant
Equipment" (reference (g)). Waive requirement for Agency Head approval for
use of Government equipment by non-Government organization. Approval may
be made by the head of the activity providing the use.
6, FAR, para 45.603, "Disposal Methods" (reference (g)). Allows the sale
of dedicated expendable launch (ELV) equipment directly to commercial ELV
operators.
7. FAR, para 45.610-2, "Exemptions from sale by GSA" (reference (g)).
Pursuant to 40 U.S.C. 484(e)(3)(B) and 484(e) (5) (reference (m)) or other
applicable provisions of the Federal Property and Administrative Services
Act, the Air Force will request delegation of competitive and negotiated
disposal authority from GSA for real and personal property dealing with
surplus ELV production equipment.
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Defense Department Space Policy