**National Aeronautics and Space Administration (NASA)**

**\[Notice (06-079)\]**

**RIN 2700-AB51**

**14 CFR Part 1266 Cross-Waiver of Liability**

**Notice of Proposed Rulemaking dated 23 October 2006**

United Space Alliance, LLC appreciates the opportunity to comment on the
subject Proposed Rules. USA generally agrees that implementation of
cross-waivers of liability will further participation in space
exploration, use and investment. The comments below are submitted in the
interests of seeking clarification of the proposed rules, including
elimination of inconsistencies, so that participation in the
exploration, exploitation, and use of outer space can be encouraged to
the fullest extent. USA understands that after the Proposed Rules become
final, NASA will implement changes to the procurement regulations and
resulting contract/subcontract clauses. For purposes of these comments,
USA assumed that the language in the implementing regulations, and
contract/subcontract clauses, will be the same or substantially similar
to the language in the Proposed Rules.

**[Summary and Supplementary Information.]{.underline}**

***Shuttle Operations:*** The Proposed Rules state that "NASA is
proposing to delete the subsection regarding the cross-waiver of
liability during Space Shuttle operations" and that "Since current
servicing mission plans envision no other non-ISS missions, there is no
longer a need to retain the section of part 1266 regarding a separate
cross-waiver of liability to be used during Shuttle operations (formerly
Section 1266.103), and NASA is proposing to delete it." Clarification is
needed with respect to when such deletion would occur. The Space Shuttle
cross-waiver regulations should not be deleted as long as Shuttle
operations continue, and prime contracts and subcontracts with
cross-waiver and indemnity provisions remain in place. Although current
serving mission plans "envision no other non-ISS missions", those plans
could change, and it would be premature to delete the section of part
1266 regarding a separate cross-waiver of liability to be used during
Shuttle operations.

*Expendable Launch Vehicles (ELVs), Evolved Expendable Launch Vehicles
(EELVs) and Reusable Launch Vehicles (RLVs):*

-   The terms Expendable Launch Vehicles (ELVs), Evolved Expendable
    Launch Vehicles (EELVs) and Reusable Launch Vehicles (RLVs) are used
    throughout the Proposed Rules, but there are not definitions for
    these terms. Definitions are needed, as well as clarification that
    the cross-waiver(s) are intended to apply to the vehicles being
    developed for the Constellation Program (e.g. Crew Exploration
    Vehicle; Crew Launch Vehicle; Cargo Launch Vehicle, etc.).

-   The scope of the "Protected Space Operations" for ELV and RLV
    appears to be reduced from the current regulation and limits
    protection for contractors and sub-contractors. See specific
    comments below.

-   ELV and RLV cross-waivers are extended to include co-payloads. If
    extended to other NASA contractors for co-payloads, why not extend
    the cross-waivers to all NASA contractors/sub-contractors involved
    in ELV or RLV activities on the same launch site?

***Changes to NASA Procurement Regulations:***

The Proposed Rules state that "To be made fully effective, the
cross-waivers required by this part will necessitate concomitant changes
to NASA procurement regulations. NASA plans to implement these changes a
expeditiously as possible after this proposed rule becomes final." Is
there a schedule for implementation of the changes. Contractors and
subcontractors currently are performing work on the Constellation
Program that falls within the definition of "Protected Space
Operations." How are these contractors and subcontractors "protected"
prior to implementation of the procurement regulations and contract
clauses? Will the contract clauses be made retroactive?

1266.102 Cross-waiver of liability for agreements involving activities
related to the International Space Station (ISS).

-   The capitalized term "Party" is introduced without a definition.
    This term is necessary to apply the cross-waiver requirements to
    NASA ISS contractors in addition to the term "Partner State", but it
    needs to be defined similar to 1266.104 (and 10266.103 current) as
    follows- "'Party' means a person or entity that signs an agreement
    involving the ISS."

-   1266.102 (a) -- added the sentence "Provided that the waiver of
    claims is reciprocal, the parties may tailor the scope of the
    cross-waiver clause in these agreements to address the specific
    circumstances of a particular cooperation."

The intent of such a broad statement is not clear. If these clauses are
not consistent across contracts then the cross-waiver between different
parties may not be the same.

-   1266.102 (b)(2)(i) -- Does the reference to a "contractor or
    subcontractor" include the related legal entities of the contractor
    or subcontractor? For example, is a subsidiary able to sue an other
    "party" since such entity is not the "entity" that actually has a
    contract that would incorporate the cross-waiver? Same
    comment/question for 1266.104 (b)(2)(i).

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-   1266.102 (b)(2)(iii) -- added the sentence - "The term "related
    entity" may also apply to a State, or an agency or institution of a
    State, having the same relationship to a Partner State as described
    in paragraphs (b)(2)(i) through (b)(2)(iii) of this section or
    otherwise engaged in the implementation of Protected Space
    Operations as defined in paragraph (b)(3)(iv) of this section."

This sentence was erroneously inserted into sub-paragraph (b)(2)(iii)
before the final sentence of that sub-paragraph "...The term
"contractors" and "sub-contractors" include suppliers of any kind\...".
It should follow sub-paragraph (iii) as a separate statement or
sub-paragraph.

-   1266.102 (c)(1) -- The final sentence has deleted "..., including
    but not limited to delict and tort (including negligence of every
    degree and kind) and contract,.." following claims and before
    against.

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-   1266.102 (c)(1)(iv) - Does the language mean that employees of an
    entity (or their survivors) cannot sue an other Party? Doesn\'t this
    say that by virtue of employment, the employee waives rights that it
    otherwise would have? Same comment/question for 1266.104 (c)(1)(iv)

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-   1266.102 (c)(4)(ii) -- added "..(except when a subrogee is a Party
    to this Agreement or is otherwise bound by the terms of this
    cross-waiver).."

> The reference should be to [the]{.underline} Agreement. The term
> Agreement is capitalized but not defined. It should be defined as NASA
> contracts related to the ISS.

-   1266.102 (c)(4)(ii) added the ***italicized*** words "..for
    ***bodily*** injury to, ***or other impairment of health of,*** or
    death of such person;"

> The change qualifies the word injury to limit "injury" to "bodily
> injury".

-   1266.102 (c)(4)(iii), (v) and (vi) -- "(v) Claims for damage
    resulting from a failure of a Party to extend the cross-waiver of
    liability to its related entities, pursuant to paragraph (c)(2) of
    this section: or (vi) Claims by or against a Party arising out of or
    relating to the other Party's failure to meets its contractual
    obligations set forth in the Agreement."

> These paragraphs are from the current section 1266.103 and 1266.104.
> The new sub-paragraph (v) is essentially the same as the current
> corresponding paragraph. The current wording for which the proposed
> sub-paragraph (vi) reads as follows -- "Contract claims between the
> Parties based on the express contractual provisions of the agreement."
> With the term "agreement" referring to Shuttle launch service
> agreements and to other NASA agreements that involve Shuttle flights
> and NASA ELV program launches respectively. The reference to "the
> Agreement" should be clarified with a definition.
>
> 1266.102 (c)(6) -- Added "This cross-waiver shall not be applicable
> when the Commercial Space Launch cross-waiver (49 U.S.C. 70101 et
> seq.) is applicable."
>
> Are the cross-waivers intended to apply when the Commercial Space
> Launch Act does not (e.g., COTS)?

**1266.103 (Reserved)**

It is proposed that the cross-waivers applicable to Shuttle operations
be removed. This is not necessary and could potentially affect future
Shuttle operations and current NASA Shuttle contracts.

**1266.104 Cross-waiver of liability for science and space exploration
agreements for missions launched by Expendable Launch Vehicles or
Reusable Launch Vehicles.**

-   1266.104 (a) -- inserted the ***italicized*** words -- "The purpose
    of this section is to ***implement*** a cross-waiver of liability
    between parties to agreements for NASA's ***science and space
    exploration missions launched by*** an Expendable Launch Vehicle
    (ELV) *or **Reusable Launch Vehicle (RLV) when those missions do not
    involve activities in connection with the International Space
    Station (ISS)*****.** This comprehensive cross-waiver of liability
    is intended to apply both between the parties to those agreements as
    well as to the parties' related entities, in the interest of
    furthering participation in space exploration, use, and investment.
    It is intended that the cross-waiver of liability be broadly
    construed to achieve this objective**. *Provided that the waiver of
    claims is reciprocal, the parties may tailor the scope of the
    cross-waiver clause in these agreements to address the specific
    circumstances of a particular cooperation*."**

The last sentence should be deleted as it could lead to inconsistent
waivers among the parties.

-   1266.104 (b)(1) -- new definition of Party reads (bolding added)-
    "\... Party means a **party** to a NASA agreement involving a launch
    of an ELV or RLV not involving activities in connection with the
    ISS". The current wording reads "\... Party means a **person or
    entity** that signs an agreement involving an ELV launch.".

The word "party" in the proposed wording should be revised to read
"person or entity" to be consistent with reference throughout the
clause.

-   1266.104 (b)(2)(iii) -- added the sentence - "The term "related
    entity" may also apply to a State, or an agency or institution of a
    State, having the same relationship to a Partner State as described
    in paragraphs (b)(2)(i) through (b)(2)(iii) of this section of
    otherwise engaged in the implementation of Protected Space
    Operations as defined in paragraph (b)(3)(iv) of this section."

This sentence was erroneously inserted into sub-paragraph (b)(2)(iii)
before the final sentence of that sub-paragraph "...The term
"contractors" and "sub-contractors" include suppliers of any kind\...".
It should follow sub-paragraph (iii) as a separate statement or
sub-paragraph.

-   1266.104 (b)(4) -- new definition added for "launch vehicle" taken
    from the current section 1266.102 applicable to ISS launches that
    reads as follows: " \... launch vehicle means an object or any part
    thereof intended for launch, launched from earth, or returning to
    Earth which carries payloads or persons or both.".

This definition should be amended to include the terms ELV and RLV
vehicles, and the terms ELV and RLV should be defined.

-   1266.104 (b)(6) -- Protected Space Operations has been restricted
    for ELV and RLV activities by removal of the following sentence -- "
    Protected Space Operations begins at the signature of the agreement
    and ends when all activities done in implementation of the agreement
    are completed."

> This restricts the scope of cross-waivers for the protection of NASA
> ELV or RLV contractors and sub-contractors. NASA's reason for this
> change is not clear, and the change should not be made.

-   1266.104 (b)(6)(i) uses the term "...launch or transfer vehicle".
    The term transfer vehicle is not defined. The term "launch vehicle"
    reference is specific to ELV in the current wording.

The terms "transfer vehicle" and "launch vehicle" should be clearly
defined. Such definitions will enhance understanding of the
applicability of the Proposed Rule to vehicles being developed under the
Constellation Program, and otherwise.

-   1266.104 (b)(6)(ii) added -- ".."Protected Space Operations"
    excludes activities on Earth that are conducted on return from space
    to develop further a payload's product or process for use other than
    for activities within the scope of an Agreement for launch
    services."

The term Agreement is capitalized without definition or reference. This
provision is carried from section 1266.102 in reference to ISS products.
NASA ELV and RLV contractors and subcontractors would want cross-waivers
and indemnity provisions to protect them from any potential liability
arising out of NASA customer or payload product liability arising out of
ELV or RLV launch services.

-   1266.104 (c)(1) - deleted the following wording between "...claims
    for damage" and "against" at the end of the paragraph -- "..,
    whatever the legal basis for such claims, including but not limited
    to delict and tort (including negligence of every degree and kind)
    and contract,\..."

-   1266.104 (c)(1)(ii) -- added "A party to another NASA agreement that
    includes flight on the same launch vehicle."

This accomplishes NASA's intent to expand the scope to co-payloads, but
why not extend to other NASA contractors involved in NASA launch
activities on the same launch site? 1266.104 is a revised regulation
that, inter alia, adds Reusable Launch Vehicles to coverage for
Expendable Launch Vehicles. There is no limitation in the regulation to
domestic ELVs or RLVs. Does NASA intend this regulation to authorize use
of cross waivers when NASA payloads are launched on foreign vehicles? If
so, isn\'t section 1266.104(c)(1)(ii) too narrow, as owners of multiple
payloads on such a vehicle may not have agreements with NASA, but would
with the vehicle owner?

-   1266.104 (c)(4)(ii) added the following ***italicized*** words "...
    for ***bodily*** injury to, *or **other impairment of health of**,*
    or death of such person;"

> The change qualifies the word injury to limit "injury" to "bodily
> injury".

-   1266.104 (c)(4)(vi) references \"the Agreement.\" Use of the
    capitalized form of the word usually refers to a defined term, but
    there is no definition for Agreement in the proposed regulations.
    What is meant by the word \"Agreement\" as used in the proposed
    regulations?

-   1266.104 (c)(6) -- Added "This cross-waiver shall not be applicable
    when the Commercial Space Launch cross-waiver (49 U.S.C. 70101 et
    seq.) is applicable."

> Are the cross-waivers intended to apply when the Commercial Space
> Launch Act does not (e.g., COTS)?