Proposed 24% cuts to NASA’s budget.

Today is May 5th, 2025. I'm Maria Varmazis, and this is T-minus. T-minus. Twenty seconds to L-O-I, T-minus. Go for the floor. Five. DARPA and NASA have released the Lunar Asset via small satellite orbiter or LASSO solicitation. Four. The US Army has established a new military occupational specialty designated "40D" for space operations specialist. Three. Octogenarian Chinese engineer Leland Chang has signed up for the inaugural interstellar human spaceflight. Two. Gilmore Space Technologies has been given civil aviation safety authority approval for the maiden launch of the Aeron Orbital Rocket. The Trump Vance Administration released the president's budget for fiscal year 2026 with a proposed 24 percent cut to NASA's spending. And today we have our monthly space law segment, which is the first ever launch of the Aeron. Space Law segment with our partners at Aegis Space Law. Attorneys Bailey Reichelt and Jack Shelton will be tackling the kinds of contracts that commercial space companies have to deal with. So stick around for more on that later in the show. It is Monday. Hope you're having a happy one, everybody. Here is today's intelligence briefing. The Trump Vance Administration released the US president's budget for fiscal year 2026 on Friday. There has been a lot of speculation about what and where cuts would affect the space industry in the last few weeks. But this is the first time we've seen the proposed cuts in black and white, and the space industry is taking a breath to figure out what happens next. The proposed "skinny" budget slashes NASA funding by $6 billion compared to enacted 2025 levels from $24.8 billion down to $18.8 billion. And that is a cut of 24 percent for those doing the math at home. It would be the biggest single-year cut to NASA funding in American history at a time when space is being pushed as being more important than ever. So, let's go over the top lines of those on the chopping board. The cuts are especially deep for space science, which would be slashed by $2.3 billion. Earth science would be cut by $1.2 billion. And legacy human exploration systems would see their budget reduced by nearly $900 million. The budget ends what they call financially unsustainable programs, including Mars sample return. It also would end climate-focused green aviation spending. Also on the outs are the Space Launch System, or SLS rocket, and Orion capsule. The U.S. administration is calling for them to be retired after Artemis III. Paving the way for what they say will be more cost-effective next-generation commercial systems that will support subsequent NASA lunar missions. The budget also would end the Gateway program, although they say there will be the opportunity to repurpose already-produced components for use in other missions. It's not all about cuts, though. There's what NASA is calling an increased commitment to human space exploration for the Moon and Mars. The budget allocates more than $7 billion for lunar exploration and introduces $1 billion in new investments for Mars-focused programs. NASA says the budget ensures America's human space exploration efforts remain unparalleled, innovative, and efficient. We certainly hope so, Mr. President. Over to Australia now, and Gilmore Space Technologies have been given Civil Aviation Safety Authority approval for the maiden launch of its Eris Orbital rocket. The launch company has granted its provisional launch permit by the Australian Space Agency in November last year. With the CASA approval now final, they are optimistic that the formal permit will be granted this week. Gilmore is hoping that the approval will come soon as they have announced that the launch window for their maiden flight will open on May 15. A small team has already been sent to Gilmore's Bowen Orbital Space Port to begin launch readiness reviews. Very exciting times. Over to China now, and commercial space tourism is opening opportunities for people of all ages to finally get their chance to go to space. And in China, octogenarian engineer named Leland Cheng has signed up for the inaugural interstellar human spaceflight. And according to Chinese media, Li, who is an academic at the Chinese Academy of Engineering, booked a seat on the inaugural commercial spaceflight scheduled to depart in 2028. Right now, Li is the director of the expert committee of China Southern Power Grid in the city of Guangzhou and is a leading figure in China's electricity industry. He says he plans to take three trips into space before his 89th birthday. I guess he's proving it's never too late to realize your dreams. The US Army has established a new military occupational specialty designated for DD for space operations specialist. It's the first ever dedicated space career field for enlisted personnel in the army. Military officials say it will better prepare the force for modern conflicts that span land, sea, air, cyber and space. Space news is reporting that the initiative, which was unveiled last August, has now received approval from the Army's senior leadership. Previously only Army officers had access to a dedicated space operations career path. DARPA in collaboration with NASA's space technology mission directorate has released the lunar assay via small satellite orbiter solicitation, otherwise known as LASO. No, they're not looking to cowboy style LASO the moon. LASO aims to enable novel mission design and related technologies to identify the volume and location of resources available on or just under the surface of the moon. The program is designed to advance US commercial capabilities in CIS lunar space and to map probable reserves of water across the entire lunar surface through remote sensing measurements taken in a very low altitude lunar orbit. Proposers day is May 7th, so click on the link in our show notes for more information. And speaking of those show notes, NTK Senior Producer Alice Kruth has more on where you can find them. Alice? Yes, you'll find show notes on all good podcast platforms. And in our selected reading section you'll find links to further reading on all the stories mentioned throughout our episodes. Those links can also be found on our website, space.ntuk.com. Each episode page includes the original links to news releases and articles. Anything extra in there? That's extra good. Just one additional story for you today. Capella Space has achieved Cybersecurity Maturity Model Certification Level 2, authorizing the company to store, process and transmit US government-controlled unclassified information. Congrats to them. On the first Monday of every month our partners at Aegis Space Law bring us the Ask Aegis segment, covering all of the FAQs that you might have about space law. And today they're tackling contracts. By the way, if you have any questions you'd like the attorneys, Bailey Reichelt and Jack Shelton to cover, you can email them to us at space@ntuk.com. Hey, Jack. So here we are, another week of talking about space law. We get a lot of questions about contracts. So I thought it would actually be cool this week if we talked about contracts. So we get asked to do transactional work, just like commercial contracts all the time. And for a lot of things, contracts are contracts are contracts. But in the space industry, there are some things that are unique. I thought it would be cool if we could talk about some of the different types of contracts that maybe a lot of our listeners haven't heard of that are kind of unique to our industry and then maybe go through the parts of a contract and what they should be paying attention to. Yes, I guess we can start by just talking about some of the different kinds of contracts we see a lot in the space industry. Probably the most obvious one that we would think of is a launch agreement. So you have a satellite or other kind of spacecraft. You want to put it up into space, but you don't have a rocket. So you need to work with somebody who has a rocket, who can put you up into space. And of course, there's contracts there, which we call launch agreements. We also have things called ride share agreements. And there's a couple of different flavors of those. Just like SpaceX, they have dedicated ride share missions where essentially you have lots of different spacecraft on board the rocket and all of them have kind of an equal place. You don't have like one prime payload and then a bunch of secondary payloads. Everybody's kind of in the same position. But you also have these companies that we might call aggregators. The issue is that launch companies, they charge by the kilogram, but there's a base level where they won't charge less than that. And so what you might do is if you have a really small payload, a really small spacecraft is you work with one of these aggregators who has a larger spacecraft and all of the little spacecraft just get attached to that. It gets dumped into space and then it deploys all of the spacecraft from it. And so you have ride share agreements with those aggregators. You can also have orbital services contracts. So one example is, let's say that you've got a spacecraft and it's in a particular orbit and you want to change the orbit, but you don't have enough thrust or enough fuel to do it. Another company can come along with their spacecraft, grab onto you and pull you into a different orbit. And we would call those orbital transfer services. You also have companies that might perform in-space maintenance of your spacecraft or refueling. So those are fall under the category of orbital services contracts. We have ground station services. This is where if you have a spacecraft, you want to be able to talk to your spacecraft, but you don't have your own ground stations that can uplink and downlink data to and from. So you work with another company who has ground stations strategically located in different places around the earth and you can use their ground stations and contract with them. Hosted payload services is another one. This is where let's say that you have developed a really cool payload, but you don't have the expertise to actually design a complete spacecraft. What you do is you work with another company who has a spacecraft and you put your payload onto their spacecraft and they provide, of course, like the power to your payload and they'll downlink the data, et cetera. And then you also have some other kinds of contracts we see a lot in the space industry that aren't necessarily unique to space, but there might be some space specific things with respect to their services. Things like thermal engineering, certainly something that companies need to think about and often they outsourced other companies because you need to consider the vacuum of space and the extreme temperatures in space going from extreme cold to extreme hot. And then of course, if you're re-entering a vehicle and coming through the atmosphere, you need to make sure that things are designed from a thermal perspective that they're going to withstand all of that heat. That's a lot of different types of contracts and maybe many of our listeners have not heard of those types of contracts. Now, there are some provisions that you're going to see in all contracts, liability provisions, IP provisions, a statement of work. But Jack, what do you think out of like the normal provisions that are in a contract, which ones would you tell everyone out there, "Hey, you need to pay special attention to these provisions in the space industry. Like don't just gloss over them. They're not boilerplate. Really read and negotiate these." You mentioned the statement of work. I think that's incredibly important. It might be a good place to start. Usually what you're going to have is some overarching contract, which might include more than one mission and usually it's some template contract that a service provider has. The specifics of the mission will go into the statement of work. Very often what happens with lawyers is they spend a lot of time working on the overarching contract. They give it to the company. The company then fills out the statement of work and don't necessarily send it back to the lawyer. It's probably something the lawyers are going to want to pay some attention to as well. But in all of these contracts, there's going to be some degree in which there's performance milestones. Let's take, for example, the hosted payload agreement. You've got a company that has a payload. They want to put it onto a spacecraft. There's going to be a lot of handoffs, a lot of instances where both parties are having to do some engineering work and making sure that they're meeting deadlines to get the project done on time before the launch. For example, the payload company is going to need to make sure that their payload is finished by a certain time. They're going to need to do some testing on it. Then they're going to have to figure out the interfaces of how does it actually interface with the spacecraft. The two companies are going to have to bring their engineers together to make sure that the payload can actually interface with the spacecraft. They're going to have to do some testing, making sure that, for example, vibration testing, making sure that the payload is not going to rattle off. You need to make sure that all these things are really clearly defined when these things need to happen. You also want to think about, well, what if somebody misses a milestone? Can the other party just get out of the contract at that point? Or do the parties push the other milestones down? If somebody misses a milestone by a certain amount, is that then an opportunity for the other party to get out of the contract? Is there liquidated damages involved where one party has to pay the other due to a missed milestone? Those are things you definitely want to focus on. Rather than just saying, here's the milestones you need to pay attention to, well, what happens if the milestones are missed? Because, frankly, milestones get missed a lot. Jack, you make a really good point here. I think one of the things we see a lot is how important these milestones become. Because as with most things in space, there's uncertainty. There's unpredictability. And the point of the contract is to add certainty and predictability about who is responsible for what and what will make the other person whole if the other party does or does not do something. So that's where you really need to look at this statement of work and let it influence the provisions in the terms of the contract. And then I think another thing that's kind of unique about the space industry is you don't have unlimited people you can contract with. There's not a huge deep bench of suppliers to go to. So you really need to think about provisions that are going to either preserve a relationship if it's a relationship you really need to sustain your business. Or if you're counting on this one action to happen at this one time, then that really makes you want to consider your liability provisions more seriously. What are some liability provisions? I mean, I think a lot of people get confused about what is liquidated damages? When should I use it? What about indemnification and those types of things? Yeah. So one of the things that I try to think about when putting these contracts together is I like to separate between problems that arise on Earth and then problems that arise in space. Very often we will have liquidated damages, indemnity, things like that for problems that occur on Earth. For example, missed milestones, things like that. Or if a company just isn't able to perform and get the job done before the launch, of course we want to figure out who's going to be responsible for what. Things get a bit more complicated once you get into space because space is inherently dangerous and everybody recognizes that. When things go wrong in space, it's a lot harder to figure out who is at fault or what caused the problem or whether the problem was actually foreseeable or not. So very often you see in contracts that once the spacecraft has been launched, and let's look again at the example of the payload, the hosted payload agreement, once the spacecraft has been launched, something goes wrong, the spacecraft isn't working properly, something else happens. Very often we see the parties holding each other harmless and obtaining insurance if they can to deal with those problems because it's so difficult to figure out who is at fault and also just because of the inherent risk involved in all of this. That doesn't mean that you can't have liability provisions where one party is indemnifying the other for things that happen in this space. But more often than not, I think we see the parties holding each other harmless and just taking care of their own damages in those instances. Awesome. That's a lot to think about. I think that's really good points that you made, Jack. Anything else that you think that you definitely need to look at, maybe pay attention to in negotiations? Compliance. Certainly, there's a lot of regulations involved. The contract or the statement of work needs to clearly delineate which parties are responsible for what things. For example, a spacecraft is going to have to undergo an FAA payload review, which is part of the rocket company's FAA license. The parties are going to need to work together to make sure that they pass the payload review. FAA also requires that part 440 of its regulations, reciprocal waivers of claims with respect to any of the FAA license activity. In other words, launch or reentry, anything that happens during those periods, if the rocket blows up, for example, all of the parties, including their subcontractors, etc., have to hold each other harmless for anything that happens. You've got FCC licenses. Between the payload company and the spacecraft company, who's actually getting the FCC license in order to talk to the spacecraft and talk to the payload? NOAA licenses for remote sensing. We've got export controls, which is a huge issue, especially if one of the parties is foreign and one's American. If they're passing technology back and forth, if they're creating an interface control document and creating some technology that might be export controlled, then we need to consider, okay, do we need licenses in order to exchange this information? How do we mark documents to make sure that everybody knows how things are controlled? Can we use licensing exceptions? One thing that comes up somewhat less, but it still comes up, is OFAC sanctions. Foreign parties are sanctioned by the Treasury Department by the Office of Foreign Assets Control, and so we need to make sure any foreign parties we're dealing with aren't sanctioned parties. That's about all we have time for today, but we're certainly happy to take any contracts questions that anyone listening may have. So, stay tuned for our next episode. . We'll be right back. Welcome back. Today is May 5th, and it is also National Astronaut Day here in the United States. Yeah, it does seem we have a lot of space-related days in early May around here, doesn't it? National Space Day, Star Wars Day, and National Astronaut Day all fall around the same time. Cinco de Mayo, as it's also known, was selected to be National Astronaut Day as, on this day, in 1961, Ellen Shepard became the second person and first American to ever travel to space. Ellen Shepard's inaugural flight is known as the Mercury-Redstone 3 mission. Shepard piloted the Freedom 7 capsule on a 15-minute suborbital flight, reaching an altitude of 116 miles. A flight was a significant step in the US space program and was widely publicized, with millions of people watching it live. National Astronaut Day was established to celebrate the heroism, bravery, and adventurous spirit of the extraordinary people who have traveled to space and hoped to inspire the next generation of explorers. Former NASA astronaut Danny Olivas posted on LinkedIn, "There is no team sport bigger than space exploration. Much like the musician on stage, thanks to the hundreds or thousands of people who helped them behind the scenes, an astronaut going to space is the final result of a collective effort. This National Astronaut Day I want to give a shout out to everyone who has contributed big or small in some way to space exploration." And on that note, there are a few ways to celebrate, and we at Team Inaz were pleased to hear that donations to the Higher Orbit's STEM outreach program will be matched by astronauts today. So if you are looking to do something that gives back and inspires the next generation, maybe head on over to their website and donate. At least thank an astronaut that has helped inspire you today, that's one idea. We will be also raising margaritas and tacos in their honor. No one said we couldn't make celebrations. That's it for T-minus from May 5th, 2025, brought to you by N2K CyberWire. Additional resources from today's report, check out our show notes at space.n2k.com. We'd love to know what you think of this podcast. Your feedback ensures we deliver the insights that keep you a step ahead in the rapidly changing space industry. If you like the show, please share a rating and review in your podcast app. Please also fill out the survey in the show notes or send an email to space@n2k.com. We're privileged that N2K CyberWire is part of the daily routine of the most influential leaders and operators in the public and private sector, from the Fortune 500 to many of the world's preeminent intelligence and law enforcement agencies. N2K makes it easy for companies to optimize your biggest investment, your people. We make you smarter about your team while making your teams smarter. Learn how at N2K.com. N2K's senior producer is Alice Carruth. Our producer is Liz Stokes. We're mixed by Elliot Peltzman and Tre Hester with original music by Elliot Peltzman. Our executive producer is Jennifer Eiben. Peter Kilpey is our publisher. And I'm your host, Maria Varmazis. Thanks for listening. We'll see you tomorrow. [MUSIC PLAYING] [SIDE CONVERSATION] [BLANK_AUDIO]