u.s. rocket propulsion industrial base assessment

BIS/OTE U.S. Rocket Propulsion Assessment

Source: U.S. Department of Commerce,

Bureau of Industry and Security, Office of Technology Evaluation, RPIBA, 2018

FOR PUBLIC DISTRIBUTION

U.S. Rocket Propulsion

Industrial Base Assessment

Final Results

2018

1

U.S. Department of Commerce Bureau of Industry and Security

Office of Technology Evaluation





2

• Office of Technology Evaluation (OTE)

Mission: OTE is the focal point within BIS for assessing the capabilities

of the U.S. industrial base to support the national defense and the

effectiveness of export controls.

• Bureau of Industry and Security (BIS)

Mission: Advance U.S. national security, foreign policy, and economic

objectives by ensuring an effective export control and treaty compliance

system and promoting continued U.S. strategic technology leadership.

• Develops export control policies

• Issues export licenses

• Prosecutes violators to heighten national security

• Develops and implements programs that ensure a technologically

superior defense industrial base

Who We Are:





OTE Industry Surveys & Assessments

Background

•Under Section 705 of the Defense Production Act of 1950 and Executive

Order 13603, ability to survey and assess:

•Economic health and competitiveness

•Defense capabilities and readiness

•Data is exempt from Freedom of Information Act (FOIA) Requests

•Enable industry and government agencies to:

•Share data and collaborate in order to ensure a healthy and

competitive industrial base

•Monitor trends, benchmark industry performance, and raise

awareness of diminishing manufacturing and technological capabilities

3





Rocket Propulsion Survey Assessment

Background

• Partnership with NASA’s Marshall Space Flight Center, and in collaboration with the Joint Army, Navy, NASA, Air Force (JANNAF) Working Group

• The principal goal is to gain an understanding of the supply chain network supporting

the development, production, and sustainment of products and services supporting both

USG and commercial propulsion-related systems

• Objectives:

a) Map the propulsion industrial base supply chain in detail;

b) Identify interdependencies between respondents, suppliers, customers, and USG agencies;

c) Benchmark trends in business practices, competitiveness issues, financial health, etc. across many tiers of the propulsion industrial base; and

d) Share data results with USG stakeholders to aid planning, outreach, and problem resolution

4





Methodology

• The scope of the survey and assessment was limited to U.S. based organizations with Propulsion-related activities, defined as:

• “Any activity/component/subsystem/test/product/service that contributes to U.S. Government or Commercial propulsion systems (including the propulsion of a launch vehicle, missile, and in-space spacecraft propulsion). The activity/component/subsystem/test/product/service does not have to be specifically intended to support propulsion applications.”

• Survey exemptions were provided on a case-by-case basis with careful consideration provided by the BIS and relevant stakeholders

• Organization size was established based on sales from Propulsion related products manufactured in the U.S.:• Small: Under $10M in annual sales

• Medium: $10M-$50M in annual sales

• Large: Over $50M in annual sales

5





Survey Taxonomy

6

Propulsion Business Categories - 7Propulsion Business Lines - 24

1. Composite Materials

2. Composite Materials Processing

3. Electrical Systems

4. Engineering Services

5. Fabrication, (sub)system assembly

6. Instrumentation, sensors, transducers

7. Insulation

8. Interconnects, fasteners, standards, seals

9. Launch services

10. Liquid propellant materials

11. Machining

12. Maintenance/aftermarket/refurbishing services

13. Material preparation

14. Material processing/finishing

15. Mechanical controls

16. Ordnance/ignition components or systems

17. Raw materials

18. Research and development

19. Solid rocket linear material

20. Solid rocket propellant material

21. System integration

22. Test equipment

23. Testing services

24. Other

1. Large liquid propulsiona) Large chemical liquid propulsion systems

b) All engines with turbopumps

c) Features of the MPS that reside in the tanks

d) Booster/upper/in-space transit stages, propellant, pressurant

2. Small liquid propulsiona) Small chemical liquid propulsion systems

b) Pressure-fed engines

c) Spacecraft propulsion

d) Pressurant and propellant tanks, flow-control components,

dedicated sensors, and engines

3. Large solid rocket motora) 40” and larger motors requiring more than one mix to cast a

single motor and relatively limited production rate

4. Small solid rocket motora) 40” and smaller motors allowing casting of multiple motors

from a single mix and relatively limited production rate

5. Science and technologya) Interagency collaboration for propulsion science and

technology across all segments of the rocket propulsion

industrial base (e.g. strategic missile boosters to space lift, in-

space chemical and electric propulsion for satellites, to tactical

missiles and missile defense)

6. Test and evaluationa) Connected with the National Rocket Propulsion Test Alliance

7. Electric propulsiona) Electrothermal rocket propulsion

b) Electrostatic or ion propulsion engine

c) Electromagnetic or magneto plasma engine





Overview of Survey Data

2013-2016

7

Data is aggregated to allow public distribution of

business confidential responses





Respondent Profile

• The data presented in this assessment represents the submissions of

361 organizations with 531 owned/internal facilities

8

361 respondents

Small: Under $10M in annual sales Medium: $10M-$50M in annual sales Large: Over $50M in annual sales

128

104

129

0

20

40

60

80

100

120

140

Respondents by Organization Size

Num

ber

of R

espondents

Small Medium Large





Propulsion Business Lines - 24Involvement by Industrial Base Business Category (8 Total)

0

50

100

150

200

250

Num

be

r of

Re

sp

on

se

s

Large Liquid Propulsion Small Liquid Propulsion

Large Solid Rocket Motor Small Solid Rocket Motor

Science and Technology Test and Evaluation

Electric Propulsion Other

Q1c, A 361 Respondents





Propulsion Business Categories – 8 TotalCompany Participation by Category

452

403 399 389 389

311 301

203

0

50

100

150

200

250

300

350

400

450

Small LiquidPropulsion

Test andEvaluation

Large LiquidPropulsion

Small SolidRocket Motor

Science andTechnology

Large SolidRocket Motor

Other* ElectricPropulsion

Num

ber

of R

esponses

10

Q1c, A 531 Facilities

*Other includes lower tier

facilities who were unsure of

how they supported

propulsion-related engines

and systems





Organization Information

11

Q1a, A 33 respondents

Countries (16) with Equity Ownership in

U.S.-based Propulsion-Related

Companies (33)

United Kingdom 9

Japan 6

Germany 3

Norway 3

Cayman Islands 2

Switzerland 2

France 2

Belgium 2

Netherlands, Canada,

Austria, Sweden, United

Arab Emirates, India, Israel

and Luxembourg

1 each

33 respondents identified non-U.S. based

organizations with equity ownership

16 unique countries were identified with equity

ownership

4 respondents each had two countries with

equity ownership, for a total of 37 non-U.S. based

organizations with equity ownership





Organization Reporting

Level

Corporate/Whole Organization,

69%

248

Business Unit/Division,

31%

113

12

Q1a, A361 Respondents

Percentage of Respondents

with Parent Organizations

Yes, 39%

139No, 61%

222

Both questions are not mutually exclusive (e.g. respondents can report at the

Business Unit/Division level and not have a parent organization)





Headquarter Location by State (361 Total)

13

Q1a, A 361 Respondents

82

3

14 1

1

1

11

1

1

1

112

4

19

15

4

5

10

14

5 1418

4

1512

18

24

15

3

8

4

8

2

26

3

9

Top States

California 82

Florida 24

Arizona 19

NY, PA 18

AL, CT 15





Special Small Business TypesNumber of Respondents by Special Business Types

152

186

3 5 1929 22

0

20

40

60

80

100

120

140

160

180

200

Not Qualified Small BusinessAdministrationCertified Small

Business

8(a) Firm HUBZone Minority-ownedBusiness

Woman-ownedBusiness

Veteran-OwnedBusiness

Num

ber

of R

espondents

14

Q1a, D 361 Respondents

55 respondents identified as multiple special business categories, and therefore are counted twice.

31% self-identified as being

dependent on the USG for continued

viability

10% self-identified as being “unsure”

if they were dependent on the USG

for continued viability

18% were at moderate to severe

financial risk according to 2016

financials

HUBZone businesses are

located in and employ people

living in Historically Under-

utilized Business Zones as

defined by the SBA





Special Small Business TypesBreakdown of 186 Certified Small Businesses

111

26 25 4 412 1 1

18

4232

50 359

14 2 20

20

40

60

80

100

120

140

Num

ber

of R

esponses

Business Type

Primary Additional

15

Q1b, B 186 Respondents

Some respondents identified multiple “Additional”

business types and multiple agencies

28 24 2735

2019

23

29

34 41

55

47

0

20

40

60

80

100

120

140

Navy Army Air Force NASA

Num

ber

of R

esponses

JANNAF Agency Contracts

Direct Both Indirect





Special Small Business TypesBreakdown of 186 Certified Small Businesses

9

10

12

16

20

32

33

34

37

40

41

43

45

48

48

49

55

61

76

98

99

101

128

Solid rocket propellant material

Liquid propellant material

Maintenance/aftermarket/repair/refurbishing

Ordnance/Ignition components or systems

Insulation

Mechanical controls

Test equipment

R & D

Interconnects, fasteners, standards, seals

Electrical systems

Launch services

Instrumentation, sensors, transducers

System integration

Composite materials processing

Material processing/finishing

Material preparation

Composite materials

Testing services

Prototyping

Fabrication/system assembly

Raw material provider

Engineering services

Machining

Number of Small Businesses by Business Line (some respondents identified multiple business lines)

16


80

125

131

138

140

146

174

201

Electric Propulsion

Large Solid

Science & Technology

Other

Small Solid

Test & Evaluation

Large Liquid

Small Liquid

Number of Small Businesses by Industrial Base Category (some respondents identified multiple

industrial base categories)

“Other” includes lower-tier companies who were unsure how they supported

propulsion-related engines and systems





Top 5 State LocationsBy Organizations, Facilities, Suppliers, Customers

17

Q1A, Q2A, Q6B, & Q10B 361 Respondents

Organization Locations (158)

California 82

Florida 24

Arizona 19

NY, PA 18

AL, CT 15

Internal Facility Locations (224)

California 122

Florida 30

Alabama 28

AZ, PA 23

New York 21

Supplier Locations (850)

California 464

New York 108

CT, PA 99

Texas 96

Arizona 83

Customer Locations (713)

California 354

Alabama 103

Virginia 91

Florida 90

Colorado 75

California is the number

one state in all four

categories

A significant portion of

the supply chain is

located in Alabama,

Arizona, Florida, New

York, and Pennsylvania





Highlight: CaliforniaBy Top Cities (27 total)

0

5

10

15

20

25

30

35

40

45

50

Num

ber

of R

espondents

HQ Locations (2 or more) Facility Locations (3 or more)

Supplier Locations (10 or more) Customer Locations (10 or more)

18

Q1A, Q2A, Q6B, & Q10B 361 Respondents

Top Cities by Category:

HQ Locations – Torrance (5)

Facility Locations – El Segundo (9)

Supplier Locations – Los Angeles (26)

Customer Locations – Hawthorne (40)

172 cities in California

have at least one

organization, facility,

supplier, or customer

Customers may be double counted (e.g.

an organization can list a single

customer 10 times which is represented

below)

40 respondents listed 10 or more of

their customers are based in

Hawthorne





Propulsion-Related NAICS CodesTop 10 Most Common NAICS Codes

16

17

27

28

29

31

36

36

37

52

0 10 20 30 40 50 60

All Other Miscellaneous Fabricated Metal Product Manufacturing(332999)

Research and Development in the Physical, Engineering, and LifeSciences (except Nanotechnology and Biotechnology) (541715)

Other Aircraft Parts and Auxiliary Equipment Manufacturing(336413)

Guided Missile and Space Vehicle Manufacturing (336412)

Aircraft Engine and Engine Parts Manufacturing (336414)

Research and Development in the Physical, Engineering, and LifeSciences (except Biotechnology) (541712)

Engineering Services (541330)

Other Guided Missile and Space Vehicle Parts and AuxiliaryEquipment Manufacturing (332710)

Machine Shops (336419)

Guided Missile and Space Vehicle Propulsion Unit and PropulsionUnit Parts Manufacturing (336415)

Number of Responses

19

Q1b, A 361 respondents

North American

Industry Classification

System (NAICS) codes

identify the category of

product(s) or service(s)

provided

361 respondents’

products and services

were categorized by

173 unique NAICS

codes out of 2,196 total





Propulsion-Related Product & Service Codes (PSC)Top 10 Most Common PSC Codes

11

11

12

12

12

13

14

16

20

27

0 5 10 15 20 25 30

Guided Missile and Space Vehicle Inert Propulsion Units,Solid Fuel, and Components (1338)

R&D - Defense System: Missile/Space Systems(Engineering Development) (AC24)

R&D - Defense System: Missile/Space Systems (AppliedResearch/Exploratory Development) (AC22)

R&D - Defense System: Missile/Space Systems(Advanced Development) (AC23)

R&D - Space: Aeronautics/Space Technology(Engineering Development) (AR14)

Guided Missile and Space Vehicle Explosive PropulsionUnits, Solid Fuel, and Components (1337)

Gas Turbines and Jet Engines, Aircraft, Prime Moving,and Components (2840)

Guided Missile Components (1420)

Space Vehicle Components (1675)

Rocket Engines and Components (2845)

Number of Responses

20


Product and Service

Code(s) (PSC) are

federal supply codes

used by the U.S.

Government to describe

the products, services,

and research and

development purchased

by the government

361 respondents’

products and services

were categorized by 349

unique PSC codes out

of 2,907 total recorded





Business Categories – 9 TotalBusiness Category by Primary and Additional Focus

61

37

5

6

38

31

232

7

7

31

22

71

88

65

92

31

0 50 100 150 200 250

Holding Company

Non-Profit

Laboratory

Distributor

Testing Facility

Prototype Manufacturer

Service Provider

Research & Development

Manufacturer

Number of Responses

Primary Additional

21

Q1b, B 361 respondents

34.3% of respondents either

primarily or additionally

participated in manufacturing





Business Categories by Financial Risk

“Primary” Business Category by Financial Risk Levels

1

43

4

23

26

26

151

1

2

72

52

1

3

3

10

3

1

3

4

7

19

0 50 100 150 200 250

Holding Company

Laboratory

Testing Facility

Non-profit


Research and Development

Distributor

Service Provider

Manufacturer

Number of Responses

Low/Neutral Risk Moderate/Elevated Risk High/Severe Risk Insufficient Data

17% of responses are classified as

Moderate/Elevated Risk and 5% are

classified as High/Severe Risk

22






Business Categories Financial Risk“Additional” Business Category by Financial Risk Level

23


4

4

15

21

18

38

43

55

55

2

2

4

5

4

14

15

20

17

2

3

3

5

4

5

6

1

1

1

2

6

8

9

8

14

0 50 100 150 200 250

Holding Company

Non-profit

Distributor

Laboratory

Manufacturer

Service Provider

Testing Facility



Number of Responses


2.0% are classified as

Moderate/Elevated Risk and 6.8%

are classified as High/Severe

Risk





Internal/Owned FacilitiesAnticipated Change (2017-2021)

395

83

2516 12

0

50

100

150

200

250

300

350

400

No AnticipatedChanges

ExpandingOperations

Other Closing/ShuttingDown/Reducing

Operations

Moving Operations

Num

be

r of

Facili

ties

24

Q2, A 531 Facilities

66 respondents indicated

their organization intends

to invest in Additive

Manufacturing/3-D

technology capabilities

(propulsion-related 45,

non-propulsion 21)

Owning: 28

Leasing: 10Both: 9

0

5

10

15

20

25

30

Future InvestmentInvesting in New or Improved Facilities

Of the 83 respondents that plan

to expand operations, 47

respondents plan to invest in

new or improved R&D facilities

(owning, leasing or both)

Respondents can have

more than one facility





Internal/Owned FacilitiesExpanding vs Closing/Reducing Operations

25

Q2, A 99 Respondents

Closing Operations/Reducing Operations - 16Expanding Operations - 83

6

11

1

1

2 1

11

1

1

25

31

1

2

3

3

4

2 1 1 6

6

3

1 1

22

3

1

5

32

1





Internal/Owned FacilitiesMoving vs Closing/Reducing Operations

1

2

1 1

2

5

1

2 2

3

8

0

1

2

3

4

5

6

7

8

9





Science andTechnology

Test andEvaluation

ElectricPropulsion

Other

Num

ber

o F

acili

ties

Moving Operations Closing/Shutting Down Facility

26


54% of these 28 facilities that are

expecting to close or move are

manufacturers

60% of those manufacturers are

expected to close/shutdown

“Development work has gone away and we

don't see any more work coming to us. Just

structural support to Rocket launcher OEM.”-Large Company

“California business climate is poor, intending

to relocate to another state.”-Small Company

“Other” includes lower-tier companies

who were unsure how they supported

propulsion-related engines and systems





27

Q3, B 108 Respondents

2 2

8

12

33

6

8

9

3

0

2

4

6

8

10

12

14

2013 2014 2015 2016 2017

Num

ber

of J

Vs

JV-Propulsion JV-Non Propulsion

Joint Ventures (JVs)

U.S. and Non-U.S. - 2013-2017





28


2

8 8

3 3

31

38

51

58

47

0

10

20

30

40

50

60

2013 2014 2015 2016 2017

Num

ber

of M

AD

s

MAD-Propulsion MAD-Non Propulsion

Mergers, Acquisitions, and Divestitures (MADs)

U.S. and Non-U.S. - 2013-2017





Mergers, Acquisitions, and Divestitures (MADs) and

Joint Ventures (JVs) – by Country 2013-2017

0

1

2

3

4

5

6

7

8

9

10

Num

ber

of M

AD

s &

JV

s

JVs MADs

29

Q3, A-B 17 Respondents

MADs & JVs 2013-2017:

Total MADs: 249

Total JVs: 56

For more information on Chinese

MAD and JV activity, see slide 164





30


1

2

3 3

2

1

5

3

11

6

8

0

2

4

6

8

10

12

2013 2014 2015 2016 2017

Num

ber

of M

AD

s &

JV

s

JV-Propulsion JV-Non Propulsion MAD-Propulsion MAD-Non Propulsion

All Foreign Mergers, Acquisitions, and Divestitures (MADs)

and Joint Ventures (JVs) - 2013-2017





Products and ServicesOrganization Participation by Propulsion-Related

Product/Service Category (6 Total)

48

108

111

129

141

169

0 20 40 60 80 100 120 140 160 180

Other

Propellants and Other Materials

Electrical, Ignition, and Control

Systems and Services

Production Techniques

Manufactured Components

Number of Responses

31

Q4a, A-F 361 Respondents

Respondents may supply

product/services under more

than one category

“Other” includes maintenance,

cleaning agents, propellant

tanks, and misc





Products and ServicesRespondent Financial Risk by Propulsion-Related Product/Service Categories

31

65

69

79

96

116

12

26

23

25

23

30

1

6

6

7

9

10

4

11

13

18

13

13

0 20 40 60 80 100 120 140 160

Other

Propellants and Other Materials

Electrical, Ignition, and Control



Manufactured Components

Number of Responses


Insufficient data is a result of unavailable/missing

data and source data mismatches

32

Q4a, A-F 361 Respondents

Financial Risk: based on

profit margins, debt

levels, liquidity, product

dependence, and

performance over time





Respondent CapabilitiesBy Electrical, Ignition, and Control – 385 Total

3

3

5

5

6

10

8

8

11

12

12

16

14

20

20

3

3

7

7

9

3

8

9

4

9

6

9

12

8

10

2

4

4

7

5

7

5

6

9

4

11

6

8

8

12

0 5 10 15 20 25 30 35 40 45

Fuses

Igniter material

Transducers

Pyrotechnics, cartridge & propellant actuated devices

Batteries

Arm fire device/Armed or safe

Harnesses

Sensors

Power electronics

Ordnance systems and components

Igniter system and components

Mechanical controls

Avionics (sub)systems and components

Actuators

Electrical systems and components

Number of Responses

Product Service BothQ4b, A361 Respondents

An additional 27 responses

were reported as “Other”

electrical, ignition, and

control products/services as

they fell outside the listed

product/service categories

(i.e. combustion chamber,

circuit boards, welding

equipment, etc.)

33





Respondent CapabilitiesBy Manufactured Components – 438 Total

3

4

3

5

8

9

8

9

15

10

16

22

17

20

19

30

24

36

1

3

2

2

4

2

6

2

7

4

4

9

4

10

5

6

14

1

1

1

5

1

1

3

3

1

2

5

4

2

8

4

0 10 20 30 40 50 60

Dampers

Springs

Curvics

Strut

Regulators

Spun metal domes

Bellows

Castings

Bearings

Fairings and skirts

Turbopump

Pressure vessels/motor cases

Rotating machinery components

Ducts, tubing, and hoses

Thrust chamber

Valves

Fasteners, gaskets, o-rings, seals

Nozzles

Number of ResponsesProduct Service Both

34




manufactured components

as they fell outside the

listed product/service types

(ex. textile cutters, cover

plates, coils, etc.)





Respondent CapabilitiesBy Production Techniques – 528 Total

2

7

6

10

11

9

12

13

10

16

15

15

21

19

39

36

42

1

2

3

3

4

8

7

3

8

4

6

13

12

11

10

15

15

2

2

3

3

1

5

3

6

6

8

7

6

6

10

7

10

12

0 10 20 30 40 50 60 70

Flow forming

Casting

Plating

Forging

Turbopump machining

Coating

Forming

Molding

Brazing

Metal jointing

Sheet metal fabrication

Heat treating

Large machining

Additive manufacturing

Fabrication

Small machining

Precision machining

Number of Responses

Product Service Both

35

Q4b, C 361 Respondents



production techniques as they

fell outside the listed

product/service types (i.e. cold

treating, filament winding, rapid

prototyping, etc.)





Respondent CapabilitiesBy Propellants and Other Materials Category – 273 Total

2

3

2

3

3

5

3

5

10

11

9

11

7

9

17

7

11

1

1

2

2

2

4

4

4

2

2

6

3

6

4

1

10

8

3

3

3

3

3

2

4

5

3

4

3

4

6

7

5

6

10

0 5 10 15 20 25 30 35

HC polymer

Pressurant

Rayon

PBI-NBR rubber

Weld wire

Fuels

Solid rocket liner material

Liquid propellant and/or materials

Polymer

Insulation

Oxidizer


Carbon fibers

Adhesives and resins

Raw materials

Coatings

Composite materials

Number of Responses


36

Q4b, D 361 Respondents



propellants and other

materials as they fell outside

the listed product/service

types (ex. propellant fracture

modeling, thruster,

intermediate chemicals, etc.)





Respondent CapabilitiesBy Systems and Services – 509 Total

7

9

6

4

9

7

12

16

17

27

2

19

6

7

8

7

19

11

19

15

6

12

10

32

21

49

10

10

14

5

8

8

10

15

12

9

12

14

13

0 10 20 30 40 50 60 70 80

Test stand design

Engine/motor system testing

Launch services

Test equipment

Composite materials testing

Materials testing

System/subsystem integration

Fabricated assemblies

System/subsystem assembly

Machine parts and tooling

Test services

Component testing


Number of Responses


37

Q4b, E 361 Respondents



systems and services as they

fell outside the listed

product/service categories (i.e.

electric propulsion services,

software services, Satellite

ground systems and

operations, etc.)





Respondent CapabilitiesBy “Other” Category – 92 Total

2

3

12

5

10

5

1

7

4

0 5 10 15 20 25

Cleaning Agents

Maintenance/Aftermarket/Repair/Refurbishing

Propellant Tanks

Number of Responses


38

Q4b, F361 Respondents

An additional 43 responses were

reported as “Other” miscellaneous

products/services as they fell

outside the listed product/service

types (ex. aerostructure fairing,

risk analysis, etc.)





Domestic & Foreign SuppliersNumber of Propulsion-Related Suppliers by Respondent

1% of Respondents

3% of Respondents

70% of Respondents

26% of Respondents

500+ Suppliers 100-499 Suppliers

1-99 Suppliers 0 Suppliers

39


Companies that are service providers can report zero suppliers. Lower-

tier companies can report zero propulsion-related suppliers if they do

not consider themselves part of the supply chain

*269 respondents had 1 or more

suppliers

71

163

219

311

313

840

0 200 400 600 800 1,000

C: Production Techniques

E: Systems and Services

F: Other

A: Electrical, Ignition, and Control

D: Propellants and OtherMaterials

B: Manufactured Components

Number of Suppliers

Input Category by Supplier*

“F: Other” includes maintenance,

cleaning agents, propellant tanks, and

misc

Total Suppliers

(not unique): 1,917





40

Q6, A 269 respondents

342

33

2

4

74

12

67

8

3

17

24

10

49

33

17613

54

21

78

44

19

1044

14

73

49

65

67 12

21

83

4

7

4

SuppliersDomestic Unique Suppliers by State: 1,343

1

4

7

40

1

1

1

3

1 supplier in Puerto Rico

Domestic unique suppliers (unique by

name only) refers to the headquarter

location since suppliers may be associated

with multiple state locations





33

45

47

49

54

55

56

57

68

77

0 20 40 60 80

Turbopump

Pressure vessels/motor cases

Nozzles


Other Electrical, Ignition, and Control



Actuators

Valves

Raw materials (including AdditiveManufacturing Stock)

Number of Responses

41

Q6, A269 Respondents

Propulsion-Related SuppliersBy Top Inputs Sourced from Domestic Suppliers

68

147

204

260

298

798

0 200 400 600 800 1,000



Other

Propellants and OtherMaterials

Electrical, Ignition, andControl

ManufacturedComponents

Number of Responses

1,343 domestic suppliers (unique by name) supplied 1,775

products/services across 6 distinct input categories

Domestic Inputs – By Category Domestic Inputs – Top 10 Types





Propulsion-Related SuppliersTop Inputs Sourced from Foreign Countries

5

5

5

6

7

7

8

15

18

32

0 20 40

Ordnance systems andcomponents

Insulation

Other Systems and Services

Launch services

Turbopump

Solid rocket propellantmaterial

Thrust chamber

Other

Other ManufacturedComponents

Raw materials

Number of Responses

Foreign Inputs – Top 10 Types

42

97 foreign unique suppliers (unique by name) provided 142

products/services across 6 distinct input categories

3

13

15

16

42

53

0 20 40 60

Production Tehniques

Electrical, Ignition, andControl

Other


ManufacturedComponents

Propellants and OtherMaterials

Number of Responses

Foreign Inputs – By Category

“Other” includes maintenance, cleaning agents, propellant tanks,

and misc.

269 RespondentsQ6, A





Propulsion-Related SuppliersForeign Unique Suppliers – (97) by Country – (28)

Country Unique Suppliers Country Unique Suppliers Country Unique Supplier

Canada 19 Norway 2 Austria 1

Germany 12 Switzerland 2 Malta 1

China 10 Israel 2 Ireland 1

Japan 7 New Zealand 2 United Kingdom 1

France 6 Norway 2 Swaziland 1

Belgium 5 Taiwan 2 Malaysia 1

Italy 4 Finland 2 Thailand 1

Russia 3 Chile 2 Sweden 1

New Zealand 3 Mexico 1 Ukraine 1

India 2

43

269 RespondentsQ6, A

Foreign unique suppliers refers to the headquarters location since suppliers

may be located in multiple countries





Supply Chain Practices Defined

• MRP (Materials Requirements Planning): obtaining the correct quantity of materials and precise timeline to support production

• Multiple Sourcing: using various suppliers

• ERP (Enterprise Resource Planning): connecting producers with makers of raw materials

• Bar Coding: using a bar code as an identification tool to track products

• CRM (Customer Relationship Management): managing and tracking relationships with customers

• MRPII (Manufacturing Resource Planning): orchestrating the correct quantity of materials throughout the entire value stream

44

Q7





Propulsion-Related Supply Chain

184

105

343357

256

0

50

100

150

200

250

300

350

400

Supply ChainDisruptions

NegativeImpact ofImports

Supply ChainManagement

Practices

Num

ber

of R

esponses

Disruptions/Impacts Experienced

Yes No

45

Q7, A-C 361 Respondents

41

46

51

52

63

64

67

71

73

77

Manufacturing ResourcePlanning

Customer RelationshipManagement

Full Time Manager

External Consultants

Outsourcing

Subcontracting

Bar Coding

Enterprise ResourcePlanning

Multiple Sourcing

Materials RequirementsPlanning

0 20 40 60 80

Number of Responses

Number Companies Using Top 10 Supply Chain Practices





Employment - Space PrimesTotal U.S. Employment vs Propulsion-Related Employment

61,312

13,413

Total Space Primes - 11

Total Employees

Propulsion Employees

46


53,828

11,507

Legacy Space Primes - 5

TotalEmployees

PropulsionEmployees

7,484

1,906

New Space Primes - 6

TotalEmployees

PropulsionEmployees





Employment at Legacy and New Space PrimesPercentage of Propulsion Employees by Age and Education

0% 10% 20% 30%

25 or Younger

26-35

36-45

46-55

56-64

65+

Percent of Total Workforce

Legacy Space Primes

Associates and Below BA/BS

Masters/Professional Ph.D.

47


0% 10% 20% 30% 40% 50%

25 or Younger

26-35

36-45

46-55

56-64

65+

Percent of Total Workforce

New Space Primes

Associates and Below BA/BS

Masters/Professional Ph.D.





Employment - 2016Total Number of Employees (All Respondents) by State: 268,545

48


4,161

9,483

43,172

24,315

20,894

21,789

225301 940

29

26

Maryland

5,107

7,854

2,296

7597

3

201

New Hampshire

1,218

New Jersey

14,999

6,408

2739,893

7,081

110

2,376

31,890

2,841

138

11,717

13,217

6,532

4,300

118

459

1,773

Massachusetts

672

Connecticut

2,431

Delaware

2,066





Employment - 2016Total Number of Propulsion-Related Employees (All Respondents) by State: 29,238

49


13,383

386Connecticut

541

Delaware

239

3

Maryland

803

Massachusetts

199

2

New Hampshire

135

New Jersey

265

1,998

23

525

921

2,850 823

11

201

11

25

191

362

768

220

680

1,528

12

113

291

49

49 252439

589135

13,384.00





Employment – 2013-2016 Total U.S. Citizen vs Total Non-U.S. Citizen Employees

251,033 254,731262,869 262,118

4,493 4,678 5,932 6,0510

50,000

100,000

150,000

200,000

250,000

300,000

2013 2014 2015 2016

Num

ber

of E

mplo

yees

U.S. Non-U.S.

50


Total U.S. citizen employment

increased by 4.4%

Total Non-U.S. citizen employment

increased by 34.7%





Employment – 2013-2016Total Propulsion-Related vs Non Propulsion-Related Employees

255,526 259,786269,178 268,545

26,568 27,184 28,063 29,238

0

50,000

100,000

150,000

200,000

250,000

300,000

2013 2014 2015 2016

Nu

mb

er

of

Em

plo

yees

Non Propulsion Propulsion

Non-propulsion related employment

increased on average annually by 1.7%

compared to 3.1% for propulsion-related

employment


51





Employment – 2013-2016U.S. Citizen Propulsion vs Non-U.S. Citizen Propulsion Employees

26,002

26,676

27,443

28,423492

508

620

729

24,000

24,500

25,000

25,500

26,000

26,500

27,000

27,500

28,000

28,500

29,000

29,500

2013 2014 2015 2016

Num

ber

of E

mplo

yees

U.S. Non-U.S.

52






Employment – 2013-2016Average Percentage of FTEs by Occupational Category

47.2%

46.8%

46.7%

45.0%

30.5%

31.2%

31.2%

31.6%

15.2%

15.1%

14.4%

15.0%

6.0%

5.9%

6.2%

6.2%

2.6%

2.5%

2.8%

3.2%

0% 20% 40% 60% 80% 100% 120%

2013

2014

2015

2016

Percentage of Total Workforce

Production Line Workers Engineers Testing Operators/Support Technicians Scientists IT Professionals

53


Values are industry averages

and will not total to 100%





Employment – 2013-2016Average Turnover Rate by Operations

7.9%8.4%

9.2%

9.8%

3.1%

4.0%4.4% 4.6%

0%

2%

4%

6%

8%

10%

12%

2013 2014 2015 2016

Avera

ge T

urn

over

Rate

Overall Turnover Rate Propulsion-Related Turnover Rate

54






Employment – 2016Total STEM Degree Propulsion-Related FTEs by Age

566

1,453

1,404

1,830

1,602

275

497

1,684

1,077

1,227

1,484

257

63

604

590

629

780

166

73

114

178

149

92

0 500 1,000 1,500 2,000 2,500 3,000 3,500 4,000 4,500

25 or Younger

26-35

36-45

46-55

56-64

65+

Total Number of Employees

Associates and Below BA/BS Masters/Professional Ph.D.

55






Employment – 2016Average STEM Degree Propulsion-Related FTEs by Age

4

9

9

11

11

2

3

9

6

7

9

2

1

4

4

4

6

1

1

1

1

1

1

0 5 10 15 20 25 30

25 or Younger

26-35

36-45

46-55

56-64

65+

Average Number of Employees

Associates and Below BA/BS Masters/Professional Ph.D.

56






Employment – 2016Total Non-U.S. FTE Employees and Contractors by Visa Type

1838 256 305 338

2,116

39

309

264

0

500

1,000

1,500

2,000

2,500

H-2B O-1A F-1Student Visa

H-1B Other L:Intracompany

Transferee

Green Card

Num

ber

of N

on

-U.S

. F

TE

Em

plo

yees a

nd C

ontr

acto

rs

FTE Employees FTE Contractors

57

Q8, C 94 Respondents

In 2016, 94 respondents employed 6,051 Non-

U.S. Citizen FTEs

*Some respondents were unable provide a visa-based

breakdown of their Non-U.S. Citizen FTEs. Their

responses are only included in the aggregate total.





Employment – 2016Non-U.S. FTE Employees and FTE Contractors by Top 10 Countries

23 29 30 3154 59

133158

246

884

0

100

200

300

400

500

600

700

800

900

1,000

Num

ber

of N

on

-U.S

. F

TE

Em

plo

yees a

nd

Contr

acto

rs

58


Mexico accounts for 54% of all Non-U.S.

citizen FTE Employees and Contractors





CustomersBy Type of Customers Supported

59

Q10, B 361 respondents

36, 16%

42, 18%

58, 26%

90, 40%

Foreign Customers - 226

Non-USG Non-Defense

Non-USG Government Defense

Non-U.S. Commercial Defense

Non-U.S. Commercial Non-Defense

167, 12%

388, 27%

383, 27%

473, 34%

Domestic Customers - 1,411

USG Non-Defense

USG Defense

U.S. Commercial Defense

U.S. Commercial Non-Defense





CustomersTotal Propulsion-Related Unique Customers by State: 637

60

361 RespondentsQ10, B

One propulsion-related customer reported in Hawaii.

112

20

109

74

32

4

12

1

2

1

6

2

13326

34

127

4

12

26

58

19

2210 39

52

1

8

3

61

5

16

Washington, DC:

22

Maryland:

21

Delaware:1

New Jersey:

13

Connecticut:

16

Rhode Island:

1

17





61

Q10, D 361 Respondents

CustomersTotal Foreign Unique Customers by Country: 156

4

2

1

12

5

12

9

21

2

2

1

6

5

2

5

5

6

2012

3

1

2

2

1

1

1

1

1

3

1

1

1

1

1

9

1

1

2Top 10 #

Japan 21

UK 20

France 12

Germany 12

Israel 9

Italy 9

Norway 6

Turkey 6

India 5

South Korea 5

156 total foreign unique customers





CustomersTop 15 Product/Services Provided to U.S. and Non-U.S. Customers

10

9

11

31

11

8

10

13

8

13

14

9

1

4

9

14

22

23

31

35

35

36

39

41

41

50

54

60

116

0 20 40 60 80 100 120 140

Propellant tanks


Maintenance/aftermarket/repair/refurbishing

System and or subsystem integration


Composite materials (including carbon)

Launch services


Other

Valves

Raw materials

System and/or subsystem assembly

Test services

Precision machining


Number of Products/ServicesU.S. Customers Non-U.S. Customers

62


Products/services were reported as

“Other” if they fell outside the

listed product/service types (i.e.

combustion chamber, textile

cutters, filament winding,

propellant fracture modeling, etc.)





R&D, Testing, and EvaluationGeneral Participation

63


Yes178, 49%

No183, 51%

Percentage of All Respondents





R&D Expenditures – 2013-2016Total and Propulsion-Related R&D Expenditures by Value

$635

$849

$1,034

$1,191

$10,096

$10,587

$10,965

$11,827

$0 $2,000 $4,000 $6,000 $8,000 $10,000 $12,000 $14,000

2013

2014

2015

2016

R&D Expenditures ($ Millions)

Total R&D Expenditures Propulsion Related R&D

64

Q11a, C 178 Respondents





R&D Expenditures – 2013-2016R&D Intensity Ratio by Average Sales

$723.7

$732.6

$718.0

$713.7

10.1% 10.0%

8.9%

10.2%

2.1% 2.0% 2.2%2.6%

0.0%

2.0%

4.0%

6.0%

8.0%

10.0%

12.0%

$700

$705

$710

$715

$720

$725

$730

$735

2013 2014 2015 2016

R&

D Inte

nsity R

atio

Avera

ge S

ale

s (

$ M

illio

ns)

Average Sales Average R&D Intensity Ratio Median R&D Intensity Ratio

65


Average R&D Intensity Ratio = Average

R&D Expenditures / Average Total Sales





R&D Expenditures – 2013-2016Top Categories of R&D Expenditures by Percentage

22.6% 22.9% 21.6% 20.8%

30.6% 30.1%33.3% 32.7%

65.7% 65.4% 65.0%67.8%

0%

10%

20%

30%

40%

50%

60%

70%

80%

2013 2014 2015 2016

Perc

enta

ge o

f R

&D

Expenditure

s

Basic Research Applied Research Product/Process Development

66








R&D Expenditures – 2013-2016Average R&D Expenditures by Company Size

$2.1 $2.9 $3.0 $3.7

$97.1

$112.4$115.9

$124.1

$64.4

$58.1 $59.4$64.0

$0

$20

$40

$60

$80

$100

$120

$140

2013 2014 2015 2016

Avera

ge R

&D

Expenditure

s (

$ M

illio

ns)

Small Medium Large

67

Q11a, B 178 Respondents





Propulsion-Related R&D ExpendituresTop Sources of Propulsion-Related R&D Expenditures by Percentage

6.5% 5.6%3.9%

7.1%

19.2%

22.7% 22.6% 23.4%

32.2%

35.7% 36.0% 36.7%

39.9% 39.8% 40.6%42.4%

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

2013 2014 2015 2016

Perc

enta

ge o

f Top S

ourc

es o

f P

ropuls

ion

-Rela

ted

R&

D E

xpenditure

s

Other USG-Related NASA-Related DOD-Related Non-USG-Related

68








Propulsion-Related R&D Expenditures – 2013-2016Average Propulsion-Related R&D Expenditures by Company Size

$0.8 $0.9$1.0

$1.2

$1.8$2.1 $2.2

$4.9

$3.2

$4.2

$5.8

$6.1

$0

$1

$2

$3

$4

$5

$6

$7

2013 2014 2015 2016

Avera

ge P

ropuls

ion

-Rela

ted R

&D

Expenditure

s

($ M

illio

ns)

Small Medium Large

69






R&D FundingTotal R&D Funding, Expenditures, and Refunds - 2013-2016

$14.1$13.7

$12.8

$9.1

$10.1$10.6

$11.0

$11.8

$2.8 $3.0 $3.0 $3.0

$0

$2

$4

$6

$8

$10

$12

$14

$16

2013 2014 2015 2016

Tota

l R

&D

Expen

diture

s/F

un

din

g/R

efu

nded

($ B

illio

ns)

Total R&D Funding Total R&D Expenditures Total R&D Expenditures Refunded by USG

70






R&D Expenditures Reimbursed – 2013-2016Total R&D Expenditures Reimbursed by USG Agencies

35.6%

32.9%33.7% 33.8%

18.9% 19.3%20.5%

22.3%

12.8%14.7% 14.9%

14.0%

0%

5%

10%

15%

20%

25%

30%

35%

40%

2013 2014 2015 2016

Perc

enta

ge o

f Tota

l R

&D

Expenditure

s

Reim

burs

ed b

y U

SG

Agencie

s

DOD-Related Propulsion-Related NASA-Related

71


Values are industry

averages and will not

total to 100%





R&D Funding – 2013-2016Top 3 Sources of R&D Funding by Percentage

72.2% 72.0% 73.1% 73.5%

45.5%47.8% 48.2%

46.5%

8.4% 9.2% 8.8%

13.0%

0%

10%

20%

30%

40%

50%

60%

70%

80%

2013 2014 2015 2016

Perc

enta

ge o

f R

&D

Fundin

g S

ourc

es

Internal/Self-Funded R&D USG U.S. Industry, Venture Capital, Non-Profit

72


Values are industry


total to 100%





USG-Related R&D Funding – 2013-2016Top Sources of USG-Related R&D Funding by Percentage

40.1%41.3%

43.6% 43.1%

20.7%22.7%

20.8%22.1%

8.7%10.5%

6.4%7.8%

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

50%

2013 2014 2015 2016

Perc

enta

ge o

f U

SG

Rela

ted R

&D

Fundin

g S

ourc

es

DOD NASA Other

73


Values are industry


total to 100%





74

R&D Funding – 2013-2016Average Value of R&D Funding by Company Size

$2 $3 $3 $4

$169

$146

$124

$35

$78.4$83.0 $83.4

$86.6

$0

$20

$40

$60

$80

$100

$120

$140

$160

$180

2013 2014 2015 2016

Avera

ge R

&D

Fundin

g (

$ M

illio

ns)

Small Medium LargeQ11a, C 178 Respondents

Average R&D funding for

medium sized companies

decreased by 79%





Research, Development, Testing, and EvaluationR&D Tax Credit Use and Type

105

19

54

R&D Tax Credit Usage

Yes Unsure No

75

5843

4

Type of Tax Credit Used

Both Federal and State

Federal Credit Only

State Credit Only

Q11a, D178 Respondents





Research, Development, Testing, and EvaluationR&D Tax Credit Use by Company Size

17, 37%

6, 13%

23, 50%


(Small Companies)

Yes Unsure No

76

Q11a, D 178 Respondents

57, 67%

7, 8%

21, 25%


(Large Companies)

Yes Unsure No

31, 66%

6, 13%

10, 21%


(Medium Companies)

Yes Unsure No

85 Respondents47 Respondents46 Respondents





Research, Development, Testing, and EvaluationR&D Application by Propulsion-Related Areas: 400 Total

12222

4666

77

888

1010

1111

1313

15171717

1919

21232323

2841

0 10 20 30 40 50

Laser electric propulsion

Laser thermal rockets

Hydropropulsion

Fuel oils

Satellite tethers

Supersonic retropropulsion

Thermal rockets

Casings

Inert propellants

Missiles - liquids

Retropropulsion

Solid propellant and fuels

Storable oxidizers

Hybrid rockets

Missiles - solids

Sensors

Large solid rockets

Nuclear thermal/nuclear fusion propulsion

Environmentally friendly propellant/fuel

Liquid propellant and fuels

Gas turbines

Hypersonic

Boosters

Electric propulsion/rockets

Large liquid rockets

Small solid rockets

Propellant tanks

Small liquid rockets

High-temperature materials

Combustion chambers

Nozzles

Thrusters

In-space propulsion

Analytical modeling

Number of Responses

77

Q11b 178 Respondents

1 company reported R&D related to

hydro-propulsion

No companies reported R&D

related to laser electric propulsion

or laser thermal rockets





R&D, Testing, and EvaluationR&D Application Areas by Industrial Base Business Participation (Part 1 of 2)

7

5

3

2

7

16

4

7

4

12

15

5

1

4

1

7

17

1

6

2

4

10

9

2

3

7

2

5

6

3

4

1

2

4

2

1

3

10

1

1

15

4

4

2

3

5

2

3

3

2

2

3

1

1

3

1

8

2

4

2

2

11

1

2

3

3

1

2

2

1

2

1

1

1

1

1

0 5 10 15 20 25 30 35 40 45



Gas turbines

Hypersonic

Boosters



Small solid rockets

Propellant tanks



Combustion chambers

Nozzles

Thrusters

In-space propulsion

Analytical modeling

Number of Responses

Small Liquid Propulsion Large Liquid Propulsion Other Small Solid Rocket Motor

Science and Technology Large Solid Rocket Motor Electric Propulsion Test and Evaluation

78


“Other” includes material

suppliers, materials testing, and

prototyping





R&D, Testing, and EvaluationR&D Application Areas by Industrial Base Business Participation (Part 2 of 2)

2

5

2

1

4

2

1

1

1

2

1

1

3

1

1

2

1

1

2

1

1

5

1

3

1

1

2

2

5

1

1

2

3

1

5

2

1

2

2

8

1

3

1

0 2 4 6 8 10 12



Hydropropulsion

Fuel oils

Satellite tethers


Thermal rockets

Casings

Inert propellants

Missiles - liquids

Retropropulsion


Storable oxidizers

Hybrid rockets

Missiles - solids

Sensors

Large solid rockets


Number of Responses

Small Liquid Propulsion Large Liquid Propulsion Other Small Solid Rocket Motor

Science and Technology Large Solid Rocket Motor Electric Propulsion Test and Evaluation

79


“Other” includes manufacturing

and additives, basic and applied

research services, and

experimental 3D printing





R&D, Testing, and EvaluationFinancial Risk by R&D Application Area (Part 1 of 2)

5

6

5

10

7

5

9

8

9

8

9

11

11

10

10

16

22

2

4

4

1

2

8

3

8

6

8

6

6

9

9

9

6

10

1

1

1

2

2

1

1

3

2

1

1

2

1

3

5

2

1

1

1

2

4

2

2

3

2

2

3

3

4

0 5 10 15 20 25 30 35 40 45




Gas turbines

Hypersonic

Boosters



Small solid rockets

Propellant tanks



Combustion chambers

Nozzles

Thrusters

In-space propulsion

Analytical modeling

Number of Responses


80


Financial risk is defined as

downside risk, estimating the

potential for financial loss and

uncertainty about its extent.





R&D, Testing, and EvaluationFinancial Risk by R&D Application Area (Part 2 of 2)

1

1

3

3

4

1

5

3

3

5

5

5

1

1

1

2

1

2

2

4

1

2

3

2

2

3

1

1

1

1

1

1

1

1

1

2

1

1

0 2 4 6 8 10 12



Hydropropulsion

Fuel oils

Satellite tethers


Thermal rockets

Casings

Inert propellants

Missiles - liquids

Retropropulsion


Storable oxidizers

Hybrid rockets

Missiles - solids

Sensors

Large solid rockets

Number of Responses


81






Research, Development, Testing, and EvaluationReceived Federal Research and Development Funding

(Direct and Indirect Funding)

No, 122, 69%

Yes, 56, 31%

82






Research, Development, Testing, and EvaluationUSG Propulsion-Related Spending Practices

Adversely Impact Organization’s R&D Activities

83

130, 73%

22, 12%

26, 15%

No

Yes

Unsure


USG Propulsion-Related Adverse Practices

Contract Type

Decreased Spending

Fluctuation/ Erratic Spending

Inadequate Guidance/ Outreach

Inadequate Budget

Program Cancellations

Domestic Sourcing/ Buy America/ Set Asides

Reliance on Prime Contractors

Revision of Requirements

No/ Limited R&D Reimbursement





Research, Development, Testing, and EvaluationUSG-Funded Small Business Innovation Research (SBIR)

and Small Business Technology Transfer (STTR) Contracts: 128

41

15

43

12

7

1 1 1

0

5

10

15

20

25

30

35

40

45

1 Contract 2 Contracts 3 Contracts 4 Contracts 5 Contracts > 5 Contracts

Num

ber

of R

espondents

SBIR STTR

84

Q11c, C 69 Respondents

USG Agency SBIR STTR

DOD 54 4

NASA 56 12

DOC - National Institute of

Standards and Technology

2 0

(e.g. 41 respondents had 1 contract

under SBIR funding. 15 respondents

had 2 contracts from SBIR funding).





Research, Development, Testing, and EvaluationSBIR Contract Financial Risk

29

14

3 3 1 1

6

1

6

1

1

0

5

10

15

20

25

30

35

40

45


Num

ber

of R

espondents


85


USG AgencySBIR

Responses

DOD 54

NASA 56


Standards and Technology2





Research, Development, Testing, and EvaluationSTTR Contract Financial Risk

3

1 1

1

2

1

1

0

1

2

3

4

5

6

7

8


Num

ber

of R

espondents


86


USG AgencySTTR

Responses

DOD 4

NASA 12


Standards and Technology0





Research, Development, Testing, and EvaluationProgram Technology Transfer

87

Q11c, D 178 Respondents

• Program Technology Transfer - defined as the movement of knowledge or

technology developed by a federal laboratory for private organizations in the

commercial marketplace

• Examples: patent dissemination, licensing of intellectual property, and R&D

collaborative relationships such as Cooperative Research and Development

Agreements (CRADAs)

• 6 organizations each identified they participated in one propulsion-related

technology transfer activity between 2013 and 2016

• The federal agencies/departments involved included: U.S. Navy, U.S. Army,

U.S. Air Force, NASA, and U.S. Department of Energy





Research, Development, Testing, and EvaluationNumber of Organizations with Testing Needs

45

7

2

Propulsion-Related

Both Past & Future Use

Anticipated Future Use (2017-2020)

Past Use (2013-2016)

88

Q11d, A 178 Respondents

27

8

Engine and/or Motor-Related

Both Past & Future Use

Anticipated Future Use (2017-2020)

Past Use (2013-2016) (0 Total)

“No” and Blank

responses are

not included





Research, Development, Testing, and EvaluationLocation of Testing Facilities Used By Testing Needs

11

15

14

19

28

36

11

12

14

17

21

36

14

17

19

20

31

42

0 20 40 60 80 100 120

Other

Other government facilities

Leased facilities

NASA facilities

Non-government facilities

Facilities owned by other industry entities

Facilities owned by your company

Number of Facilities

Past Use (2013-2016) Current Use (2017) Anticipated Future Use (2018-2020)

89

Q11d, A 178 Respondents

One additional testing facility

was reported as “Other” as it

fell outside the types listed

(Test Launch application)





Research, Development, Testing, and EvaluationOrganization’s Ability to Perform Test Type (Internal/ External)

0 5 10 15 20 25

Altitude Engine (100K+ Lb Thrust)

Altitude Engine (50K-100K Lb Thrust)

Altitude Hybrid

Altitude Engine (25K-50K Lb Thrust)

Altitude Stage (100K+ Lb Thrust)

Altitude Stage (50K-100K Lb Thrust)

Altitude Hypergolic

Ambient Hybrid

Ambient Engine (100K+ Lb Thrust)

Ambient Engine (50K-100K+ Lb Thrust)

Ambient Engine (25K-50K Lb Thrust)

Ambient Hypergolic

Altitude Stage (< 50K Lb Thrust)

Altitude Engine (0-25K Lb Thrust)

Thermal Vacuum (Engine or Stage)

Ambient Solid

Ambient Engine (0-25K+ Lb Thrust)

Ambient Stage

Component (e.g. Preburner, etc.)

Number of Responses

Internal Capability Procured Externally

90

Q11d, B 178 Respondents

An additional 40 test types (23

internal and 17 external) were

reported as “Other” as they fell

outside the listed test types

(i.e. altitude electric engine,

nuclear fusion, cryogenic

fueled stages, etc.)





91

$157.4$164.6

$157.6$153.2

$62.4 $65.1 $62.0 $63.5

$0

$20

$40

$60

$80

$100

$120

$140

$160

$180

2013 2014 2015 2016

To

tal S

ale

s (

$ B

illio

ns)

U.S. Sales Total Non-U.S. Sales Total

SalesTotal U.S. and Non-U.S. Sales – 2013-2016






SalesTotal U.S. and Non-U.S. Propulsion-Related Sales – 2013-2016

$22.4

$24.0

$26.0

$28.0

$2.3 $2.1 $2.0 $2.0

$0

$5

$10

$15

$20

$25

$30

2013 2014 2015 2016

Tota

l P

ropu

lsio

n-R

ela

ted

Sale

s (

$ B

illio

ns)

U.S. Propulsion-Related Sales Non-U.S. Propulsion-Related Sales

92






SalesU.S. and Non-U.S. Propulsion-Related Sales as a Percent of Total Sales

2013 – 2016

93

15.8%

17.2% 17.4%

18.4%

4.1%4.5% 4.2% 4.3%

0%

2%

4%

6%

8%

10%

12%

14%

16%

18%

20%

2013 2014 2015 2016

Pro

puls

ion-R

ela

ted S

ale

s (

% o

f Tota

l)

U.S. Non-U.S.Q9, B 361 Respondents





Sales

Combined Total U.S. and Non-U.S. Propulsion, NASA, and Defense Related

Sales – 2013-2016

94

Q9, B-D 361 Respondents

$24.7$26.0

$28.1

$29.9

$4.6$5.4 $5.3 $5.3

$36.8$37.6 $36.9 $36.5

$0

$5

$10

$15

$20

$25

$30

$35

$40

2013 2014 2015 2016

Tota

l S

ale

s (

$ B

illio

ns)

Total Propulsion-Related Sales (U.S.+Non U.S.) Total NASA-Related Sales (U.S.+Non-U.S.)

Total Defense-Related Sales (U.S.+Non-U.S.)

Total sales can be accounted for in

more than one category (e.g. total

sales can be both NASA and

Propulsion-related)





Financial Growth 2013–2016Median Net Sales, Gross Profit, EBIT

$18.4

$21.6$22.5 $22.1

$6.4 $6.5 $6.4 $6.0

$1.32 $1.20 $1.00 $0.94

$0

$5

$10

$15

$20

$25

2013 2014 2015 2016

($ M

illio

ns)

Net Sales ($) Gross Profit ($) (Net Sales - COGS) EBIT ($) (Earnings Before Interest and Taxes)

95

Q12 361 Respondents

*Values used are industry medians

*Data reflects all organizations activities





Financial Growth 2013–2016Average Gross Profit Margin % by Business Size

42.1% 42.0%40.3%

41.7%

29.6% 30.2%28.8% 28.1%

24.4% 25.0%24.0% 24.0%

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

2013 2014 2015 2016

Avera

ge G

ross P

rofit M

arg

in

Small Business Medium Business Large Business

96

Q12 361 Respondents

*Values used are industry averages





Financial Growth 2013–2016Average Net Sales by Business Size

$14.3$5.7

$20.8 $19.0

$304.3$297.7

$268.6 $264.9

$2.1 $2.1

$1.9 $1.9

$0.0

$0.5

$1.0

$1.5

$2.0

$2.5

$0

$50

$100

$150

$200

$250

$300

$350

2013 2014 2015 2016

Avera

ge N

et S

ale

s (

Larg

e, $ B

illio

ns)

Avera

ge N

et S

ale

s (

Sm

all

& M

ediu

m, $ M

illio

ns)

Small Business Medium Business Large Business

97

Q12 361 Respondents

*Values used are industry averages

Change in average net sales (2013-2016):

Small Businesses: +33.2%

Medium Businesses: -13.0%

Large Businesses: -9.6%





Financial Risk – 2013-2016

Current Ratios

2.51 2.48

2.262.31

2.91

2.502.77

2.56

1.861.95

1.79

1.99

1

1.5

2

2.5

3

3.5

2013 2014 2015 2016

Curr

ent R

atio


Small Business Current Ratio Medium Business Current Ratio

Large Business Current Ratio

98

Q12 361 Respondents

Liquidity ratio - measures if current

assets can meet liabilities when

due. Includes: current ratio and

quick ratio

Current ratio - ability to pay short-

term and long-term liabilities

through the proportion of current

assets to current liabilities. A

higher current ratio is better than a

lower one

*Data reflects all

organizations activities, 25

organizations had

insufficient data and were

excluded





Financial Risk – 2013-2016Quick Ratios

1.59

1.69

1.49

1.57

1.741.72 1.77

1.48

1.201.17 1.19

1.23

1

1.1

1.2

1.3

1.4

1.5

1.6

1.7

1.8

1.9

2013 2014 2015 2016

Quic

k R

atio

Small Business Quick Ratio Medium Business Quick Ratio

Large Business Quick Ratio

99

Q12

361 Respondents


*Data reflects all

organizations activities, 25

organizations had


excluded

Liquidity ratio - measures if

current assets can meet

liabilities when due.

Includes: current ratio and

quick ratio

Quick ratio - ability to meet

short-term liabilities with

quick/near cash assets.

Excludes inventories. A

higher quick ratio is better

than a lower one





Financial Risk – 2013-2016Debt Ratio by Business Size

0.470.46

0.430.43

0.40

0.36

0.34

0.39

0.40

0.44

0.43 0.42

0.3

0.32

0.34

0.36

0.38

0.4

0.42

0.44

0.46

0.48

2013 2014 2015 2016

Debt R

atio


Small Business Debt Ratio Medium Business Debt Ratio

Large Business Debt Ratio

100

Q12 361 Respondents

Debt Ratio – capability to pay long-

term debt by measuring the

proportion of assets financed by

debt. Ratio < 0.5 indicates most

assets are financed by equity

*Data reflects all organizations

activities, 25 organizations had

insufficient data and were excluded





Financial Risk – 2013-2016Debt/Equity Ratio by Business Size

0.46

0.40 0.40

0.33

0.51

0.47 0.45

0.48

0.58

0.48

0.67

0.46

0.3

0.35

0.4

0.45

0.5

0.55

0.6

0.65

0.7

2013 2014 2015 2016

Deb

t/E

qu

ity R

atio

Small Business Debt/Equity RatioMedium Business Debt/Equity RatioLarge Business Debt/Equity Ratio

101

Q12

361 Respondents


Debt/Equity Ratio – Extent

debt is utilized to finance

assets relative to value of

equity. Ratio lower than 1

indicates more assets

financed by equity rather than

debt

*Data reflects all organizations

activities, 25 organizations had


excluded





Financial Risk – 2013-2016Asset and Industry Turnover Ratios

1.57 1.50 1.44 1.40

4.884.74 4.69 4.67

0

1

2

3

4

5

6

2013 2014 2015 2016

Asse

t a

nd I

nve

nto

ry T

urn

ove

r R

atio


Asset Turnover (sales/average total assets)

Inventory Turnover (COGS/average inventory)

102

Q12 361 Respondents

Asset Turnover Ratio - Indicates the

efficiency in which an organization

utilizes its assets to generate revenue.

A higher ratio is better than a lower

one

Inventory Turnover Ratio – Measures

the effectiveness that inventory is

managed through a comparison of

cost of goods sold with average

inventory. A lower ratio indicates

weaker sales and excess inventory

*Data reflects all

organizations activities





Financial Risk – 2013-2016Profitability Measures

5.8% 6.0%5.2% 5.2%

8.1% 7.9%6.6%

5.7%

16.6%

21.0%

24.4% 24.7%

0%

5%

10%

15%

20%

25%

30%

2013 2014 2015 2016


Net Profit Margin (net profit/ total revenues)

Return on Assets (net income/ total assets)

Percent of Companies with Elevated and Above Financial Risk

103

Q12 361 Respondents

Net Profit Margin -

Indicates the extent of

profit associated with each

dollar sold

Return on Assets (ROA) –

Indicates the efficiency in

which an organization can

manage its assets to

generate profits

*Data reflects all

organizations activities





Financial Risk and Facility Reduction/Closing

40

4853 55

20

28

35 34

0

10

20

30

40

50

60

2013 2014 2015 2016

Num

ber

of R

espondents

Number of Respondents by Financial Risk - 2013-2016

Moderate/Elevated Risk High/Severe Risk

104

Q2, Q9 361 Respondents

97

0

2

4

6

8

10

Reducing Operations Closing/Shutting Down

Num

ber

of F

acili

ties

Propulsion-Related Facility Reductions/Closings (Projected

for 2017-2020)

From 2013 to 2016:

-Total companies identified as moderate/elevated risk

and high/severe risk grew by 48.3%

3% of propulsion-related facilities (16 of 531) are

projected to either reduce operations (9) or close (7)

between 2017 and 2020

Financial risk is defined as downside risk which

estimates the potential for financial loss and uncertainty





Organization Standards/CertificationsStandards/Certifications Organizations are Currently Holding or Pursuing

13

25

27

38

46

68

54

136

225

2

1

1

3

3

7

84

12

12

0 50 100 150 200 250

AMS

J-STD-001DS

FAA

ISO 14001

Independent/Internal (From Customer)

NADCAP

AS9100D

AS9100

ISO 9001

Number of Responses

Currently Holding In Process

105


Currently Holding Total: 962

Pursuing Total: 175

19 of 361 respondents had to requalify

for propulsion-related purposes,

which cost an average of $33,067 with

potentially high variability





Additive Manufacturing / 3-D PrintingLevel of Involvement

273

926

53

0

50

100

150

200

250

300

None Propulsion Non-Propulsion Both

Num

ber

of R

espondents

None Propulsion Non-Propulsion Both

106


24% of survey respondents utilize additive

manufacturing/3-D Printing. Most lower-tier respondents

do not

The business types covered include:

distributor, holding company, laboratory, manufacturer,

non-profit, prototype manufacturer, research and

development, service provider, and testing facility





Additive Manufacturing / 3-D PrintingParticipation

107


2

2

8

6

7

10

10

1

5

9

10

16

19

22

22

4

4

12

12

21

25

33

33

0 10 20 30 40 50 60 70

Other

A.M./3-D Design Outsourcing

A.M./3-D Design Products/Services

Integration into Systems/Subsystems

Direct Manufacturing

Tooling/Machining

Prototyping


Number of Responses

Participation By Application Area

Propulsion Non-Propulsion Both

Other Prop Non Both

Fixtures - - 3

Testing - - 1

Advisory Services - 1 -





Additive Manufacturing / 3-D PrintingParticipation By Process Type

108


2

2

2

7

1

4

10

1

2

2

3

3

8

4

10

11

10

1

4

1

4

3

6

8

14

13

0 5 10 15 20 25 30 35

Continuous Liquid Interface Production

Sheet Lamination

Binder Jetting

Material Jetting

VAT Photopolymerization

3-D Welding

Other

Directed Energy Deposition

Material Extrusion

Powder Bed Fusion

Machining/Finishing A.M./3-D Products

Number of Responses


Other Prop Non Both

FDM/FFF 1 2 2

Plastic-related - 3 -

SLA Castings 1 - -

Cold Spray - 1 -

Composite Lay-up - 1 -

EBAM - - 1

Liquid Additives - 1 -





Additive Manufacturing / 3-D PrintingPropulsion-Related Investment – 2013-2016

$511.4

$2,028.6

$1,515.9

$353.3

$0

$500

$1,000

$1,500

$2,000

$2,500

2013 2014 2015 2016

Investm

en

t S

pen

din

g (

$ M

illio

ns)

109


62 respondents listed either

“Propulsion” or “Both” to indicate

their level of involvement in additive

manufacturing/ 3-D printing.





Capital ExpendituresMedian Capital Expenditures by Year – 2013-2016

110

$374.0

$474.0

$610.0 $595.0

$0

$100

$200

$300

$400

$500

$600

$700

2013 2014 2015 2016

Me

dia

n C

ap

ita

l E

xp

en

ditu

res (

$ T

ho

usa

nd

s)






Capital ExpendituresAverage Capital Expenditures by Year – 2013-2016

111

$57.4$51.7

$47.5$43.3

$0

$10

$20

$30

$40

$50

$60

$70

2013 2014 2015 2016

Ave

rage

Capital E

xpe

nd

itu

res (

$ M

illio

ns)






Capital ExpendituresMedian Propulsion-Related Capital Expenditures by Year – 2013-2016

112


$114.7

$133.0

$172.5$164.7

$0

$20

$40

$60

$80

$100

$120

$140

$160

$180

$200

2013 2014 2015 2016

Med

ian P

ropu

lsio

n-R

ela

ted

Capital

Expe

nd

itu

res (

$ T

hou

sa

nd

s)





Capital ExpendituresAverage Propulsion-Related Capital Expenditures by Year – 2013-2016

113

$4.4

$9.4

$10.5

$6.6

$0

$2

$4

$6

$8

$10

$12

2013 2014 2015 2016

Ave

rage

Pro

puls

ion

-Rela

ted

Capital

Expe

nd

itu

res (

$ M

illio

ns)






114

15a, B 361 Respondents

No Negative

Impact

82.23%

Negative

Impact

10.8%

Capital ExpendituresOrganization CapEx Adversely Impacted by Reductions in

USG Spending – 2013-2016

54, 15%

307, 85%

Overall CapEx

Adverse Impact

No Adverse Impact

38, 11%

323, 89%

Propulsion-Related CapEx

Adverse Impact

No Adverse Impact





Capital ExpendituresAnticipate Organization’s CapEx Will Be Adversely Impacted by

Reductions/Fluctuations in USG Spending – 2017-2020

115

15a, B 361 Respondents

No Negative

Impact

84.5%

47, 13%

314, 87%

Overall CapEx

Anticipate Adverse Impact

Do Not Anticipate Adverse Impact

35, 10%

326, 90%

Propulsion-Related CapEx

Anticipate Adverse Impact

Do Not Anticipate Adverse Impact





Production/Capacity Capacity and Utilization - 2016

116


• “Utilization” refers to the fraction of an organization’s potential output that is

actually being used in current production. Potential output is based on a 7

day-a-week, 3x8-hour shift production schedule

• 311 organizations reported an average utilization rate of 61.4%, with 231 of

these organizations reporting a propulsion-related utilization rate of 38.8%

• 262 organizations reported an average of 18 weeks to reach 100% utilization,

with 240 organizations reporting an average of 22 weeks to reach 100%

propulsion-related utilization

• Some organizations had difficulty reporting utilization rates because they are

distributors, service providers, etc.





Production/CapacityWhich constraints listed would your organization face during a surge in demand

for propulsion-related products?

117

164

105

7974

55

0

20

40

60

80

100

120

140

160

180

Workforce Capital Inventory Funding Quality Control

Num

ber

of R

esponses

Types of Constraints


Comments:

• Labor, time, and inventory constraints

• Accommodate for recruitment, training, equipment, modification of

facilities, suppliers, regulatory approval, and funding

• Need technical skilled workers

• Noted productivity impact of regulatory burdens and audits

• Ability to rapidly shift resources to face a surge in demand due to

their small percentage of propulsion-related work

• Already plan for potential surges in demand





Participation in Propulsion-Related Cost Sharing

Arrangement Types

4

6

6

9

15

13

20

8

8

8

12

18

16

26

0 5 10 15 20 25 30

University-Sponsored

Inter-Agency Cooperation

Partnership With Subsidiary

Partnership With Downstream Suppliers

Public-Private Partnerships

Partnership With Subcontractor

U.S. Government-Sponsored

Number of Responses

Cost S

haring A

rrangem

ent T

ype

Most Common Past and Future Cost Sharing Arrangement Types

Future (2017-2020) Past (2013-2016)

118

Q15b, A 361 Respondents

Examples:

University-Sponsored: For R&D and non-

profit goals

Inter-Agency: Reduce risk, leverage

investments, utilize different talent and skill

sets, required by sponsor





Cost Sharing Arrangements By Deterrents

8

10

10

11

13

13

17

25

0 5 10 15 20 25 30

Export Control Adherence

Logistics/Operations

Legal Costs

Legal Time/Burden

Regulatory Burden

Contract Vehicle

Intellectual Property Concerns

Financial Concerns

Number of Responses

119


28 organizations responded

“Yes” for deterrents to cost

sharing arrangements

“The intense requirements

and regulations required to

obtain and maintain

classified computing

equipment (are a deterrent)”- Small Business





Support to USGSupport to U.S. Government Agencies by Organization Size

2013-2017

67

61

82

0

10

20

30

40

50

60

70

80

90

Small (<$10M) Medium ($10M - $50M) Large (>$50M)

Nu

mb

er

of R

esp

on

de

nts

Organization Size Based on Revenue

120


42% of respondents did not

support USG agencies





Support to USGTop 10 Federal Agencies Supported (All Contracts)

8

11

36

23

22

17

38

49

48

61

11

11

11

16

23

22

45

50

57

61

12

35

14

30

39

62

73

85

98

88

0 50 100 150 200

Intelligence

USMC

Other/Misc

DOE

DARPA

MDA

U.S. Army

U.S. Navy

USAF

NASA

Number of Responses


121

Other Direct Both Indirect

DOD Other 14 4 4

Misc. 6 1 3

Department of Transportation

4 1 1

Defense Logistics Agency

4 - -

National Science Foundation

2 1 -

Research Laboratories

1 2 -

Classified - 1 2

Coast Guard 1 - 1

EPA 2 - -

Department of Agriculture

1 - 1

U.S. Postal Service - - 1

Nuclear Regulatory Commission

1 - -

FDA - - 1

IRAPA - 1 -Sample does not include “N/A” entries






Propulsion-Related Support to USGTop 10 Federal Agencies Supported (All Contracts)

7

4

7

3

17

37

16

28

51

74

11

38

40

49

37

26

75

80

60

45

13

15

14

17

30

38

65

76

92

91

0 50 100 150 200

Intelligence

USMC

Other/Misc

DOE

DARPA

MDA

U.S. Army

U.S. Navy

USAF

NASA

Number of Responses


122

Sample does not include “N/A” entries






Support to USGPrograms Supported by 25 or More USG Dependent Respondents

6358

49 48 46 4339 38 36 36 35 34

30 29 29 29 28 27 26 25 25

0

10

20

30

40

50

60

70

Num

ber

of R

esponses p

er

Pro

gra

m

123

Q5c, B 210 Respondents

210 respondents

supported USG

Programs. Some

reported supporting

multiple USG Programs





Support to USGPrograms Supported by 25 or More USG Dependent Respondents

With Non-U.S. Employees (Top 5 Countries)

0

50

100

150

200

250

300

350

Num

ber

of R

esponses p

er

Pro

gra

m

India Mexico China Canada Philippines

124


India and China account for 55% of

all Non-U.S. employees that support

USG programs.

Non-U.S. employees are not program

specific and can be accounted for in

more than one USG program

33% of Non-U.S. employees were

identified as engineers

14% of Non-U.S. employees supported

small liquid propulsion systems





Support to USGPropulsion/Non-Propulsion-Related Support to USG JANNAF Agencies

48

33

24

18

48

41

24

22

62

61

43

34

13

15

26

20

13

16

26

23

26

37

41

39

0 50 100 150 200

NASA

USAF

U.S.Navy

U.S.Army

Number of Responses

Direct-Propulsion Both-Propulsion Indirect-Propulsion

Direct-Non Propulsion Both-Non Propulsion Indirect-Non Propulsion

125

Q5a, A-E 210 Respondents

156

184

203

210





Financial Risk of Organizations that Support USG JANNAF Agencies

140

106

146

124

34

30

29

35

17

11

25

16

12

9

10

9

0

50

100

150

200

250

USAF Army NASA Navy

Num

be

r o

f R

espo

nses

High/Severe

Insufficient Data

Moderate/Elevated

Low/Neutral

Insufficient data is a result of

unavailable/missing data

and source data mismatches

126

Q5a 210 Respondents

Financial Risk





High/Severe Risk Organizations That Support USG JANNAF Agencies – 2013-2016

127

Q5a 16 Respondents

Army

NASA

Navy

USAF 4

4 out of 16 or 25% of high/severe risk

organizations support all 4 listed

USG JANNAF Agencies across 10

programs

Not Shown:

USAF & NASA: 1

Army & Navy: 1

1

21

1

1

1

2

1

USG/Commercial

Program*

Number of

Respondents

SpaceX - Falcon 9 2

M270 MLRS 2

RAM 2

Antares 1

Atlas V 1

SLS Exploration Upper State 1

EELV 1

Griffin 1

Javelin 1

MGM-140 (ATacMS) 1

*Denotes respondents that support all

JANNAF agencies





High/Severe & Moderate/Elevated Risk Organizations

that Support USG JANNAF Agencies – 2013-2016

128

Q5a 63 Respondents

Army

NASA

Navy

USAF 19

19 out of 63 or 30% of high/severe or

moderate/elevated risk organizations

support all 4 listed USG JANNAF

Agencies across 10 programs

Not Shown:

USAF & NASA: 3

Army & Navy: 3

3

71

3

2

9

6

3 2

2

USG/Commercial

Program*

Number of

Respondents

Atlas V 7

Delta IV 6

Delta IV - Heavy 6

Atlas V - Centaur 5

Atlas V - CCB 5

Delta IV - CBC 5

Vulcan 5

Antares 4

Blue New Shepard 4

CST100 4

*Denotes respondents that support all

JANNAF agencies





Support to USGParticipation in Small Solid Engine/ Motor Programs – 2017-2018

53

4

5

5

6

8

10

11

12

14

15

16

18

23

2

1

1

1

2

2

0 10 20 30 40 50 60

Other

Trident V5 - Fairing Eject Motors

NASA Peregrine Army Motor

Trident V5 - Third Stage Eject Motors

Black Brant V (third stage)

Trident V5 - Vector Control Motors

Trident V5 - Post Boost Motors

NASA Oriole Rocket Motor (second stage)

STAR 48BV Solid Rocket Motors

SLS Attitude Control Motor

Trident V5 - Launcher System Motors

SLS Booster Separation Motor

SLS Jettison Motor

SLS Launch Abort

Number of Responses

Yes No, But Supported Between 2013-2016

129

Q5b, A 361 Respondents


reported as “Other” small solid

engine/motor programs (53 currently

and 2 between 2013-2016). These fell

outside the programs listed (ex.

THAAD Motors, Hydra Motors,

Tomahawk Motors, Atlas Motors, etc.)

These programs are either directly or

indirectly related to USG. They may be

commercial, but used by the military

or other agencies





Support to USGParticipation in Small Liquid Engine/Motor Programs – 2017-2018

36

9

11

10

13

15

2

2

1

1

1

0 5 10 15 20 25 30 35 40

Other

Virgin Galactic NewtonFour

SpaceX Kestrel (upper stage)

Virgin Galactic NewtonThree

SpaceX Draco Thrusters

SpaceX SuperDraco

Number of Responses


130



reported as “Other” liquid

engine/motor programs (36 currently

and 2 between 2013-2016). These fell

outside the programs listed (ex.

NASA Lunar Flashlight, Moog

Monarc, NASA NEA Scout, etc.)


indirectly related to USG. Participation

can be commercial and used by the

military or other agencies





Support to USGParticipation in Large Solid Engine/Motor Programs – 2017-2018

13

20

22

25

25

30

3

1

1

1

1

0 5 10 15 20 25 30 35

Other

Orbital ATK GEM 63XL

Orbital ATK Castor 30 (A, B and/or XL)

Aerojet Rocketdyne AJ-60A*

Orbital ATK GEM 60

Orbital ATK SLS Booster

Number of Responses


131


An additional 16

responses were reported

as “Other” large solid

engine/motor programs

(13 currently and 3

between 2013-2016).

These fell outside the

programs listed (ex.

Super Strypi (Leonidas),

Minotaur, Orbital ATK

EELV, Atlas 5, etc.)These programs are either

directly or indirectly related to

USG. They may be

commercial, but used by the

military or other agencies.





Support to USGParticipation in Large Liquid Engine/Motor Programs – 2017-2018

21

1

1

1

1

2

9

9

9

15

15

17

21

21

23

26

32

35

41

49

1

1

3

1

4

2

1

6

2

1

3

2

0 10 20 30 40 50 60

Other

Energomash RD-151

Energomash RD- 191

Energomash RD- 193

Energomash RD- 181

IHI Aerospace BT-4

Aerojet Rocketdyne AJ26 (first stage)

Energomash RD-180

Vulcan XR-8H21 (TBC)

SpaceX Raptor

SpaceX Merlin 2 concept

SpaceX Merlin 1D Vacuum (MVacD)

Blue Origin BE-3

Blue Origin BE-4

SpaceX Merlin 1D

Aerojet Rocketdyne J-2X

Aerojet Rocketdyne AR-1 Booster

Aerojet Rocketdyne RS-25

Aerojet Rocketdyne RS-68 (including A)

Aerojet Rocketdyne RL10 (A, B and/or C)

Number of Responses


132

Q5b ,D 361 Respondents



large solid engine/motor

programs. These fell outside

the programs listed (ex. Delta

IV EELV, Blue Origin Shepard,

SpaceX Dragon, etc.)


indirectly related to USG. They may be

commercial, but used by the military

or other agencies





Support to USGTop 15 Supported USG Programs and Systems

63

58

49 4846

4339 38

36 36 35 34 3329 29

0

10

20

30

40

50

60

70

Num

ber

of P

rim

ary

Pro

duct/

Serv

ice A

ssocia

ted

USG Programs and Commercial Systems

133


C: Centaur

SM: Standard Missile

CCB: Common Core Booster

PAC: Patriot Advanced Capability

SLS: Space Launch System

THAAD: Terminal High Altitude Area Defense





Support to USGFinancial Risk of Organizations by Program/System - 2016

4540

36 35 32 32 29 3124 26 25 22 23

19 21

10

10

95 10 9

56

8 7 68 7

66

6

5

4

44 2

4

1

3 33 4 2

32

2

3

4

11 1

11

0

10

20

30

40

50

60

70

Num

ber

of R

eponses

Low/Neutral Risk Moderate/Elevated Risk Insufficent Data High/Severe Risk

134


Financial Risk: based on profit margins, debt

levels, liquidity, product dependence, and

performance over time

High/Severe Risk: organizations with low

profit margins, high debt levels, high product

dependence, and poor performance over time

Insufficient data is a result of

unavailable/missing data and

source data mismatches





USG Contract InformationMost Common Propulsion-Related Contract Type

709

163

43 26 23 22 90

100

200

300

400

500

600

700

Fixed Price CostReimbursement

Other Time andMaterials

Best Value Lowest PriceTechnicallyAcceptable

(LPTA)

Incentive

Num

ber

of C

ontr

acts

Type of Contract

Types of Contracts Used to ProvidePropulsion Support

135

Q16, B-C 242 Respondents

30

212

119

Do Particular Contract Types Inhibit/Discourage Ability to

Provide Propulsion Products/Services?

Do not Contract

with USG

No

Yes

An additional 43 responses were reported

as “Other” contract types as they fell

outside the programs listed (ex. Indefinite

Delivery/Indefinite Quantity [IDIQ], Federal

Acquisition Regulation [FAR], etc.)





USG Contract InformationMost Concerning Contract Vehicles, Ranked 1-3

13

5 5

32 2

23

3

1

1

3 1

1

1

2

0

2

4

6

8

10

12

14

Fixed Price Other CostReimbursement

Time andMaterials

Lowest PriceTechnicallyAcceptable

(LPTA)

Incentive Best Value

Num

ber

of C

ontr

act V

ehic

les

Rank 1 Rank 2 Rank 3

136

Q16, C, 1-3 30 Respondents

30 organizations reported particular contract types

inhibited/prevented them from providing propulsion-

related support to the USG. Some reported multiple

contract types as concerning

Fixed Price Comments:

• Reported the high risk put on

contractors with this type of contract,

especially for small organizations

• Reported the difficulty in accounting

for R&D estimates

• Suggested there should be variable

scope if utilizing this type of contract

“Other” included contract types beyond those

listed (ex. Indefinite Delivery/Indefinite Quantity

[IDIQ], Federal Acquisition Regulation [FAR], etc.)





USG Contract Information

13, 7% 17,

9%

Neither,151, 84%

Effect of USG Acquisition Reform on Business Lines*

Hindered

Helped

137

Q16, D-E 361 Respondents

Yes, 100, 28%

No, 199, 55%

27, 7%

35, 10%

Does Your Organization Consider Itself Dependent on

the USG?

Dependency is based on an

organization’s own assessment of

its sustainability and operations

Unsure

Not Applicable

“Nobody comes to the small companies to get

knowledge. USG not willing to understand

lower tier and know who is making the parts for

the programs.” – Small Company

* Blank

responses

were not

included





5

13

2161

Respondents that are USG Dependent by Financial Risk

High/Severe Risk Insufficient Data

Moderate/Elevated Risk Low/Neutral Risk

138

Q16, E 100 Respondents

Perceived Support to USGPerceived Dependence USG - 2016

Of the 100 organizations that identified

their dependence on USG, 13

respondents did not provide enough

data to calculate financial risk.

11 respondents identified being

dependent on USG and identified

engaging in DMSMS activities.

4, 36%

7, 64%

Financial Risk of Respondents that are USG Dependent and Engaging in DMSMS Activities

Low/Neutral Risk Moderate/Elevated Risk





Perceived Support to USGSelf-Determined Dependence USG JANNAF Agencies

20

25

24

25

20

22

27

26

22

24

22

25

0 10 20 30 40 50 60 70 80

U.S. Army

U.S. Navy

NASA

USAF

Number of Responses


139

Q16, E, 1 100 Respondents

76: USAF

support

73: NASA

support

71: U.S. Navy

support

62: U.S. Army

support

Dependency is based on an

organization’s own assessment of

its sustainability and operations.





Counterfeit Parts

• Six organizations reported identifying counterfeit parts in 2013, 2014, and 2015

• Reported counterfeit parts included bearings, fabrications, electrical systems and components, and igniter systems and components

• Four organizations identified counterfeit parts as originating in the U.S., while two organizations identified counterfeit parts as originating outside the U.S.

• Nineteen organizations identified cyber security breaches as a threat to long-term viability. Of the nineteen organizations identified, three organizations also identify counterfeit parts as a threat

140

17b, D 6 Respondents





U.S. Air Force Release of Surplus ICBM MotorsRespondent Perspectives - 2016

Yes, 52, 14%

No, 309, 86%

Are you familiar with USAF plans to release surplus ICBM

motors into the commercial market?

141

17b, E 361 Respondents

Yes36,

10%

No167, 46%

Unsure158, 44%

Does your organization perceive the release of ICBM motors as damaging?

Perceived Harm Respondents (361)

Direct 14

Indirect 16

Both 6

Unsure 158

None 167

Indicate your organization’s

anticipated harm/benefit

resulting from the proposed

release of surplus ICMB

solid rocket motors by USAF

Perceived Benefit Respondents (361)

Direct 12

Indirect 3

Both 4

Unsure 82

None 260





Propulsion-Related Patents

• How many of your organization’s patents registered with U.S. Patent and Trademark Office (PTO) are propulsion-related?

• Thirty (30) respondents reported a total of 1,119 propulsion-related patents from 2013-2017• Of the 30 respondents identified: 15 were large companies, 7 were medium companies,

and 8 were small companies

• A single organization reported detecting a patent infringement

• The organization reported being unable to resolve the patent infringement issue• “They published proprietary information which they were prohibited from doing under an

NDA they signed.” – Small Company

142

17b, G 30 Respondents





Diminishing Manufacturing Sources & Material

Shortages (DMSMS)• 19 respondents indicated their facilities engage in DMSMS activities

• A Diminishing Manufacturing Sources and Material Shortages (DMSMS) issue is the loss, or impending loss, of manufacturers or suppliers of items, raw materials, or software

• Support of U.S. Agencies by those 19 respondents:

143

1917

1513 12

97 6

4 4 3 2 10

10

20

Num

ber

of R

espo

nses



Diminishing Manufacturing Sources & Material

Shortages (DMSMS)Propulsion Industrial Base Support – By Business Categories

144

1

3

5

11

14

1819

0

2

4

6

8

10

12

14

16

18

20

ElectricPropulsion


Test andEvaluation




Other

Num

ber

of R

esponses

Business Category


“Other” was most commonly

identified by companies who

were unsure of how they

supported propulsion-

related engines and systems





Diminishing Manufacturing Sources & Material Shortages

By DMSMS Spending – 2013-2016

$127,023

$106,228$102,633 $102,253

$9,378 $10,353 $10,378

$30,809

$0

$20,000

$40,000

$60,000

$80,000

$100,000

$120,000

2013 2014 2015 2016

DM

SM

S S

pen

din

g (

$ T

hou

sa

nd

s)

Total DMSMS Spending NASA-Related DMSMS Spending

145

Q17b, C19 Respondents

Average DMSMS Spending:

$5.76 Million

Average NASA-Related DMSMS Spending:

$0.80 Million





Security: Cyber/Physical

• Cyber Security: The body of technologies, processes, and practices

designed to protect networks, computers, programs, and data from attack,

damage, or unauthorized access

• Commercially Sensitive Information (CSI): Privileged or proprietary

information which, if compromised through alternation, corruption, loss,

misuse, or unauthorized disclosure could cause serious harm to the

organization owning it

• CSI Can Include: Customer/client financial records, intellectual property,

internal communications, manufacturing and production line information,

patents and trademarks, R&D information, and supplier/supply chain

information

146





Security: Cyber/PhysicalExpenditures – 2013-2016

$622

$849

$924

$1,020

$378 $384

$705$679

$0

$200

$400

$600

$800

$1,000

$1,200

2013 2014 2015 2016

Tota

l C

yber/

Physic

al S

ecurity

Expenditure

s

($ M

illio

ns)

Total Expenditure on Cyber and Physical Security

Cyber Spending Physical Spending

147


$2.59

$3.32 $3.38$3.59

$1.83 $1.81

$3.11

$2.83

$0.0

$0.5

$1.0

$1.5

$2.0

$2.5

$3.0

$3.5

$4.0

2013 2014 2015 2016Avera

ge C

yber/

Physic

al S

ecurity

Expenditure

s

($ M

illio

ns)

Average Expenditure on Cyber and Physical Security

Cyber Spending Physical Spending





Security: Cyber/PhysicalNetwork Administration – 2016

1

4

5

12

37

66

231

0

9

5

67

46

94

130

0 50 100 150 200 250

Only Non-U.S. External ServiceProvider

Both U.S. and Non-U.S. ServiceProviders

Internal IT Department and Externalnon-U.S. Service Provider

Not Applicable

Only U.S. External Service Provider

Internal IT Department and externalU.S. Service Provider

Internal IT Department

Number of ResponsesResponsibility for Computer Networks

External Network Internal Network

148


115 130224

0

50

100

150

200

In Storage(at rest)

Transmitted AcrossInternal Networks

TransmittedOutside

Oraganization'sNetworks

Encryption of CSI Data

No, 62

Yes, 196

Unsure, 103

Able to Detect the Theft of CSI?





Security: Cyber/PhysicalDirect JANNAF Suppliers and CSI Theft Detection

14 1418

14

16 16

28

17

0

10

20

30

40

50

USAF Army NASA Navy

Num

ber

of R

espondents

Organizations that Cannot/Are Unable to Detect CSI Theft

Cannot/Are Unable Unsure

149


30 30

46

31





Security: Cyber/PhysicalDirect JANNAF Suppliers

0

2

4

6

8

10

12

14

16

18

20

Num

be

r of

Re

sp

on

de

nts

Cyber Impacts by Type of DOD Service - 2013-2016

USAF Army NASA Navy

150


7263

29 24

17

17

2





Security Measures by Organization SizeLarge: >$50M Medium: $10M - $50M Small: <$10M (2016)

151


0% - 60% 61% - 84% 85% - 100%1 respondent excluded because they did

not begin sales until after 2016

Values denote % of Companies (e.g. 85-

100% of Large Companies employ Malware

Defenses

0% 100%

Malware Defenses

Data Recovery Capability

Controlled Use of Admin. Privileges

Wireless Access Control

Data Protection

Controlled Access for Need to Know

Account Monitoring and Control

Secure Configurations Network Devices

Application Software Security

Limit/Control of Network Ports/Services

Secure Configurations on Hardware

Incident Response and Management

Secure Network Engineering

Boundary Defense

Inventory of Software

Inventory of Devices

Maintain/Monitor/Analysis of Audit Logs

Continuous Vulnerability Assessment

Security Skills Assessments & Training

Penetration Test & Red Team Exercises

Large (129)0% 100%

Medium (104)

0% 100%

Small (127)





Companies Seeking Cyber Security SupportLarge: >$50M Medium: $10M - $50M Small: <$10M (2016)

152


29, 45%Small

25, 37%Medium

12, 18%Large

44% of companies seeking

additional cyber security support

are Small Businesses





Cyber SecurityImpacts and Actions of Malicious Cyber Activity – 2013-2016

2

9

11

12

20

38

57

5

6

14

26

106

0 20 40 60 80 100 120

Theft of Software and/or Source Code

Exit from Product or Business Line

Exit from Foreign Markets or Market Segments

Exfiltration of CSI Data

Damage to Production Capabilities or Systems

Damage to IT Infrastructure

Significant Change in R&D Strategy

Loss of Sales/Business Interruption

Revised Approach to International Partnerships

Costs from Damage Assessment/Remediation

IT Downtime

Major New Investment in Cyber Security

Number of Respondents

Impact Experience

Action Undertaken

153






Top Organizational ChallengesLarge-Size Organizations (>$50M) Top 15 Rankings

1

1

1

1

3

5

2

3

3

6

5

5

8

11

13

11

10

12

4

12

11

8

9

10

12

12

14

13

16

8

10

12

10

17

8

12

14

16

12

8

11

12

11

9

0 5 10 15 20 25 30 35 40

Material Price Volatility

Export Controls/ ITAR Regulations

Labor Costs

Government Regulatory Burden

Material Availability - U.S.

Competition - Foreign

Labor Skills

High Fixed Costs

Skills Retention

Government Purchasing Volatility

Aging Equipment

Labor Availability

Government Acquisition Process

Reduction in U.S. Government Demand

Competition - Domestic

Number of Responses

Primary Ranked Other Ranked Concerns Unranked Concerns

154

Q17a 129 Respondents





Top Organizational ChallengesMedium-Size Organizations ($10M - $50M) Top 15 Rankings

3

2

1

1

3

1

2

3

5

11

6

2

7

5

5

4

8

7

7

12

12

9

13

6

5

13

19

15

21

8

6

5

8

8

4

6

9

5

11

7

4

5

9

7

0 5 10 15 20 25 30 35

Program/System Cancellation

QA/QC Requirements (sosts, Lead Time, etc)

Supplier Reliability - U.S.

Taxes

Labor Costs

Access to USG R&D Funding

Export Controls




Reduction in U.S. Government Demand

Healthcare


Labor Skills

Labor Availability

Number of Responses


155






Top Organizational ChallengesSmall-Size Organizations (<$10M) Top 15 Rankings

9

1

4

1

2

8

6

6

3

4

6

6

9

7

12

7

9

15

9

10

12

7

16

18

17

15

16

19

4

9

14

13

4

13

13

6

15

8

10

10

12

11

9

0 5 10 15 20 25 30 35 40

Access to USG R&D Funding

Labor Costs

Program/System Cancellation

QA/QC Requirements (Costs, Lead Time, etc.)

Aging Equipment

Export Controls

Taxes

Availability of Capital



Healthcare

Labor Skills



Labor Availability

Number of Responses


156






Competitiveness/Long-Term ViabilityExport Controls

66, 19%

26, 7%

156, 43%11, 3%

102, 28%

Sell Product/Services That Are Export Controlled (248)

Yes - International Traffic in Arms Regulations

Yes - Export Administration Regulations

Yes - Both

Unsure

No

157


19, 12%

35, 22%

104, 66%

Export Product/Services That Are Export Controlled (158)



Yes - Both

158 of 361 respondents reported

exporting product/ services that

are export controlled

248 of 361 respondents

reported selling export

controlled product/services.





Competitiveness/Long-Term ViabilityExport Controls – 2013-2016

158

158 Respondents

61

8

45

Loss of Export Sales Opportunities of Propulsion-Related Products/Services (60)



Yes - Both

Unsure

19

35

104

Export Product/Services That Are Export Controlled (158)



Yes - Both 15 of 158 directly attributed

losses in export sales to

export controls.

Q17b, A






1

1

1

1

1

1

1

2

2

2

3

4

5

6

7

0 1 2 3 4 5 6 7

India

Italy

Netherlands

New Zealand

Poland

Russia

Turkey

China

Switzerland

Taiwan

South Korea

Israel

United Kingdom

France

Germany

Number of Organizations Who Lost Sales

Countries Where Export-Related Sales Were Lost

159

17b, A&B 361 Respondents

Respondents reported top three

countries where sales were lost

303

232

96

Impact of Export Control Reform on Propulsion-related Technology

Favorable Unfavorable No Effect Unsure






160

Actions Taken in Response to Export Controls ITAR Both EAR

Avoid Exporting 19 15 3

Incentivize "design-out" 14 6 -

Incentivize "ITAR Free" 13 6 -

Engage in Cost-sharing 7 3 1

Modify to avoid export-control 5 4 1

Reduce/eliminate investment in R&D 7 3 -

Related production outside the U.S. 6 3 -

Reduce/eliminate investment in production 6 3 -

Discontinue Production 2 5 1

Related R&D outside the U.S. 5 2 -

17b, A&B 361 Respondents





OutreachTop 10 Areas that Organizations Request Information for USG

Programs/Services

33

34

34

34

38

38

44

53

55

66

0 10 20 30 40 50 60 70

Design for Manufacturability

SBIR and STTR Contracts

Export Assistance

Technology Acceleration

Quality Management and Control

R&D Assistance and Partnership

Continuous Improvement/Lean Manufacturing

Market Expansion/Business Growth

Export Licensing (ITAR/EAR)

Cybersecurity

Number of Responses

161


ITAR: International Traffic in Arms

Regulations

EAR: Export Administration

Regulations

SBIR: Small Business Innovation

Research

STTR: Small Business Technology

Transfer





Highlight on China

162





HighlightChina and the Propulsion Supply Chain

Quotes Regarding China

and the Supply Chain

• “Chinese suppliers dump tungsten

powders and semi-finished products

in the U.S.”

• “Undercutting of price structure by

dumping of aluminum powder by

China.”

• “Availability of foreign made

spherical aluminum powders,

particularly in the case of China

market dumping practices, in

conjunction with the severe export

licensing requirements for export of

our product renders our Company

unable to compete in the non-U.S.

commercial market.”

163

27

15

110

3 3

0

20

40

60

80

100

120

Chinese Employees By Visa Type

H1B F1 Green Card L O1A

A total of 158 Chinese Nationals

(excluding Taiwan, Hong Kong, and

Macau) were reported by 17

propulsion-related organizations.

However, most do not work in

propulsion-related roles for the

surveyed organizations.

China and Ownership Structure

• Zero companies reported a Chinese parent company

• One company reported an internal/owned facility in China, with no anticipated change in the next four years

• Zero companies reported using external facilitates inside China





10

1

0

2

4

6

8

10

Supplier/Customer

China as Propulsion Supplier

China as Propulsion Customer

164

3

8

0

1

2

3

4

5

6

7

8

9

Mergers, Acquisitions, Divestures (MADs) and

Joint Ventures (JVs)

China MADs China JVs

As a supplier, China provides Raw

materials (including Additive

Manufacturing Stock), Solid rocket

propellant material, Weld wire,

Other Systems and Services, and

All Other

As a customer, China buys

propulsion-related Raw materials

(including Additive Manufacturing

Stock)

Companies engaging in JVs in

China reported “Broaden customer

base” and “Improved access to

foreign markets” as the top reasons

Companies engaging in MADs in

China reported “Broaden customer

base” and “Reduce costs” as the

reasons

HighlightChina and the Propulsion Supply Chain

BIS/OTE 165

U.S. Department of Commerce, Bureau of Industry and Security

Office of Technology Evaluation

HCHB 1093, 1401 Constitution Avenue, NW

Washington, D.C. 20230

http://www.bis.doc.gov/DIB

BIS/OTE Contact Information

Brad Botwin

Director, Industrial Studies

(202) 482-4060

[email protected]

Erika Maynard

Special Projects Manager

(202) 482-5572

[email protected]

Government Analysts:

Jennifer Rice, Trade and Industry Analyst (Project Lead)

Moriah Phillips, Trade and Industry Analyst

Support Staff: Alex Csanadi, Alexander Werner, Ashira Naftali Greer, Caela Mandigo, Camden Landew,

Christopher Whittle, Cole Welch, Connie Lee, Gauri Deshpande, Hannah Kim,

Ian Bonanno, Ian Kearns, Kimberly Kruse, Lea Carroll, Lena Richenberg, Morgan Hughes,

Norris Kpamegan, Ormond Derrick

Jason Bolton

Senior Trade and Industry Analyst

(202) 482-5936

[email protected]

http://www.bis.doc.gov/DIB

mailto:[email protected]



u.s. rocket propulsion industrial base assessment

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