The Boeing Company (BA) Earnings Call Transcript & Summary

[Audio Gap] Teleconference to talk about some updates to Boeing CST-100 Starliner. We have NASA and Boeing representatives on the line to answer your questions. We'll first go through some opening remarks before we get to your questions, but that will take up the majority of our time today. On the line, we have Steve Stich, Manager of NASA's Commercial Crew Program; we have John Vollmer, Vice President and Program Manager of Boeing Commercial Crew program; and we also have Michelle Parker, Chief Engineer of Boeing Space and Launch. Thanks to all of our participants for joining today. We'll first go around the room and start with some opening remarks. In the meantime, while we are starting with some of these initial comments [Operator Instructions]. And that will take up the majority of our time today. So with that, I'll pass it over to Steve Stich for opening remarks.

And I apologize for the interruption. This is the operator. Today's conference is being recorded. If you have any objections, you may disconnect at this time. And I apologize, you may proceed.

Yes. Thanks, [ Gary ]. It's great to be here to talk about the progress. And the first thing I want to say is the Boeing NASA team is incredible. They are professionals, and they have been working through this investigation with a lot of rigor and care. Of course, the oxidizer is a hazardous commodity, and they've taken precautions along the way. We've made a lot of progress since we last talked. The team has worked through a lot of the items in the fault tree and had a lot of closures on that over the last month or so, using data from the vehicle as they do testing and also components offline to close out those items. And they'll work through a lot of the items in the fault tree over the next month or so. Michelle is going to talk more about it, but today is a pretty big day. After offloading oxides around the spacecraft in the last week, 2 of the valves have been removed, and those will go to the NASA Marshall Space Flight Center that has a really good CT scanner, like when you go in for a medical procedure. A lot of space flight hardware gets CT scanned, and there's a CT scanner there that will be used to look at the valves first. And then they'll go into a disassembly to look for the root cause. We also have our White Sands test facility at NASA involved. They have a long heritage with hypergolic propellants, and they'll be doing some testing. They have started some testing on 2 valves, which we started back in September, a long-term oxidizer exposure without moisture. We'll get some other valves out to White Sands and put them through a bunch of paces to replicate the environment in the C3PF and then also at the VIF to go understand root cause. And of course, we've talked about we'll fly when we're ready. We talked about the first half of next year as being a viable launch period, and I know John and Michelle will talk more about that. I'm incredibly proud of the team. They continue to work through the fault tree, continue to make progress, and we'll fly when we're ready. And I'll turn it over to John Vollmer, the Program Manager for Boeing.

Okay. Thank you, Steve. I appreciate that. So I'd like to start with a thank you for all of you for your interest in our progress. I'd also like to thank NASA and Aerojet Rocketdyne. Their partnership in this process has been absolutely invaluable. And then, of course, I'd like to express my appreciation to the Starliner team. They're really taking this like consummate professionals. They're committed to solving this challenge and getting back to the launchpad. Proceeding is just a tremendous honor and responsibility of flying astronauts to the International Space Station. And that goes for The Boeing Company as well. We are resolute in fulfilling our commitments that we've made to NASA to carry crew back and forth to the International Space Station. So with that, let me share what we've set as our objective for OFT-2, and that is, is to get back to flight safely, and I stress safely, as soon as possible. So everything we've done up to this point and the path that we're developing going forward is going to enable us to meet that goal of getting back to flight safely and as soon as possible. We looked at the options of how to go forward, and we felt the best path was to proceed with the current service module. By keeping the same service module and crew module configuration, it's putting us somewhere in the first half of 2022. And of course, that's pending spacecraft readiness, the availability of the Atlas V, getting a date on a range and, of course, working with our ISS partners to ensure that we've got a port to dock. I've also -- we have Michelle Parker with us today. And let me just give her a proper introduction. So Michelle is the Chief Engineer for Space and Launch Systems for the Boeing Company. She is responsible for not only the technical integrity success of Boeing Starliner. She's also responsible for engineering on International Space Station, the space launch system and satellite programs. So she has a lot of background and has been involved in helping us work the troubleshooting, the root cause investigation and as we work through the remediation activities to develop the path forward for the spacecraft. So she's been an incredible partner, and that's why I asked her to be with here to -- be here with us today. She will take a lot of the technical questions, and I'll focus on the programmatic questions. And so Michelle, over to you.

All right. Thank you, John. Before I go into some of the technical details, I also would like to express my appreciation to NASA and to Aerojet and this combined team that really has been working very diligently from the time that we've had the issue on the launch pad to today. It really couldn't be a better team, very knowledgeable, all the way down to the details of the propulsion system as well as operations. And so really a great team working very, very closely together through a complex and difficult problem. So today, I'm here at the commercial crew and cargo processing facility. So downstairs -- the vehicle is downstairs in high bay. And as Steve already mentioned, it's been a big day for us today because we have removed 2 of the valves, and we are planning to remove a third as well. So we've gotten 2 of the valves successfully off of the vehicle, and the team is proceeding on to the third valve. And those will be important for us in order for us to verify what we believe is the most probable cause of the issue. So we'll take those valves. We'll pack them up, and we will send them out to Marshall Space Flight Center where, as Steve said, they'll get CT scanned and then be further disassembled to verify the root cause. So let me take us back a little bit. So back on August 3, we were on the launch pad. We were progressing through our countdown launch procedure through nominal operations, and about 4.5 hours prior to launch is a standard cycling of the valves. That's just part of our normal launch countdown procedure. And at that time, we had 13 of the 24 valves, which would not cycle for us. And at that time, we determined that we would not be launching that day. So since that time, we conducted troubleshooting efforts at the launch pad and then also at the Vertical Integration Facility. So we spent -- we just spent some time they're digging into the root cause, establishing our fault tree and doing investigation on the vehicle to pinpoint what was going on with the valves. At that time in the Vertical Integration Facility, we were able to free 19 of those 13 stuck valves. So through a combination of higher voltages, some external power to the valves and some heating, we were able to free 9 of those 13 valves. But at the end of the day, there were 4 that remained in the stuck configuration that we were unable to free at the Vertical Integration Facility. And we, therefore, decided to roll back to the factory, which is where we are now. Also, during that time, the team, again, that combined team, NASA Aerojet, Boeing put together an extensive fault tree on all potential causes that could be contributing to this condition. Very, very quickly, we were able to eliminate a number of those items, such as wiring or bad instrumentation that was just giving us faulty readings. Those were eliminated quickly from the fault tree. And also very quickly, the team really honed in on this most probable cause of an interaction between the oxidizer that is in the system and water or humidity in the valves as well, creating -- combining to form nitric acid and corrosion products, which then contributed to the sticking of the valves. So honed in on that pretty quickly, but again, working rigorously through the fault tree to make sure that we had supporting data to be clearing off the other branches on the tree. And we've really remained with that probable cause for the majority of this investigation. We did roll back to the factory, where we were able to gain better access to the valves by removal of some of the panels and such on the vehicle and be able to get direct access to those valves to perform additional troubleshooting efforts, which again, included the addition of higher voltages that we also were able to do with the VIF and then additional heating to the external portions of the valve, and we were able to free additional valves. We also took 3 valves, and we disassembled the dry side of the valve. So not where the oxidizer is, but on the ends of the valve are dry areas. One side, including the solenoid that operates the valve; one side, containing the valve positioning indicator that tells us whether the valve is open or closed. It provides the telemetry as to whether the valve is open or closed. We were able to disassemble 3 different valves to look in and see if we saw any anomalous behavior in there. We did -- the solenoid side of the valve was fairly clean. The valve positioning indicator side, as we disassembled that, we did get some indications of oxidizer as well as we saw corrosion products in the form of aluminum nitrates, which, again, supported the root cause that we have been pointing at. So that investigation was completed and again, continue to support what we believe was the root cause. From there, we've also -- we've moved into remediation efforts. As John said, it's -- we believe our quickest path back to launch is to use service module 2, again, assuming that we can do that in a safe manner that ensures operation of the vehicle. So we've continued to look at remediation efforts there, including adding desiccant to the valves to prevent further moisture ingression as well as looking at adding heaters. Because also as part of our troubleshooting efforts, we did put heat externally to the valves, which allowed the 3 of the remaining 4 valves to free up. And we have one valve that remains stuck close, but we've reserved that one. We haven't tried this troubleshooting method because we want to preserve that for further investigation, and that's one of the valves that we're removing. So looking at going forward with service module 2, what remediation efforts would need to be there for service model 2. So we've spent some time on the vehicle, looking at that and testing that as well. So that's been part of our investigation. And as we mentioned today, we did -- I should say, last week, we removed the oxidizer from the system. The team did a really great job of working through a complex operation to get that volatile commodity off of the spacecraft. So that has been removed, and then they proceeded into removing the valves, which is where we are today, removing those 2 valves. And the third will be removed as well. So really, where we are right now is a -- 3 areas that we need to continue to work: the verification, which will include those removed valves going down to Marshall Flight Center for CT scan and disassembly to look at corrosion products there; remediation that we would need for flight; and then flight rationale that we'll work very closely with NASA, both the Commercial Crew Program and ISS. So those are kind of the 3 focus areas that we're working through. And then just to say a little bit about this phenomenon of the corrosion. These valves do have Teflon seals in them. The Teflon is chosen because it's compatible with the oxidizer. But it is known that oxidizer will permeate through Teflon. So that's a known phenomenon that's been seen previously, depending on the length of time that, that commodity is in the system. But the Teflon is chosen because it is compatible with the oxidizer. And we've been able to rule out a number of areas, like I said, with regard to wiring, instrumentation, the propulsion controller itself. And so we are down now, those 13 valves that have been stuck. We've been able to free up 12 of them with the 1 that we are reserving -- preserving for further verification efforts. So we haven't really tried all of our tricks on that one. So that one is one of the valves we're removing to send to Marshall. And I'd just like to reiterate what John said. Our goal is really to get back to flight safely. We won't -- we will ensure that everything is safe, and that all procedures are followed safely and as quickly as possible. We really are excited to be able to launch this vehicle and test it out. It is important that we do it right. And the team has been very diligent about working through all of the potential causes and planning out all of the investigations and remediation. It is a complex issue. It's a complex issue that we've had to work through, so we definitely have been methodical about that. And again, the team is working together very closely every day to use sound engineering processes to get through that. And really looking forward to these next couple of steps of verification, getting the valves remediated and determining when it's safe and prudent to fly. And with that, I'll turn it back to [ Gary ].

All right. Thank you, Michelle, and thanks to our briefers for those initial remarks. We'll now open it up for questions. [Operator Instructions] Whenever you're called, please state to whom you'd like to direct your question, and we'll take Q&A for the rest of our time today. So with that, let's start off on our queue with Bill Harwood from CBS News.

It's Bill Harwood, CBS. Just across the street from you. I'm curious how the water/humidity got into the valve. I mean lots of rockets use these propellants, but this seems to have caught everyone off guard, and I'm kind of wondering about that. I'm wondering if the -- the rocket being exposed at pad 41 for a couple of days in Florida weather was a factor. And I guess what I'm really asking is, is this something nobody thought about? And I know you guys think about stuff like this, but I'm really curious how it happened.

Yes, I can take that one. So I think it is also important to note that we have seen this propulsion system work successfully. It's the same propulsion system that we use during our SM -- our service module hot fire as well as our Pad Abort Test as well as OFT-1 and had not seen any of these issues. So there was no reason to believe that we would have a concern here. We are looking at the length of time that the oxidizer was in the system to enable that permeation through the Teflon seal as well as the environmental conditions at the time. We do have a purge in the vehicle that should limit the humidity in that area. But really, the thought is that the just normal environment humidity was likely the source of that moisture in the valve, and that's what we're looking at now. And as we do see, as I mentioned, when we disassembled the valve as we were back here in the factory and we did see aluminum nitrates, so that shows us that we did have oxidizer and humidity present in that area.

All right. Thank you. We'll do our next question with Joey Roulette from the New York Times.

A question for John Vollmer. When was it first determined that Boeing couldn't launch until the first half of next year? And Boeing took a $410 million charge to do this OFT redo. And I was wondering if -- who was bearing most of the costs for these troubleshooting issues? And will Boeing need to take something like another charge in the future? And then one other question for Steve Stich. This problem was kind of found pretty close to launch, and that's something that the ASAP highlighted as a concern in its most recent meeting and -- for both NASA and Boeing, I guess. Are you guys reviewing how you verify flight readiness? Are you making any changes to what you guys do before launch?

Okay, Joey. Let me start with some of those there, and then we'll try to answer all of them. So relative to the cost, so NASA would not bear any responsibility for those costs that was in scope of our contract. That is firm fixed price. So we're not expecting any charges to the government from that side. Let's see, relative to -- and everybody asked this question, discovery. Why didn't we know this before it went to the pad? So just to be clear, we had operated these valves. As Michelle said, we had operated them on 3 different fire indications. But we had -- in the vehicle itself, we had cycled these valves many, many times in the factory as we installed them, as we checked them out, as we went through the environmental qualification testing. There was further vehicle qualification testing where these valves were cycled. And so we had no indication that we were -- there was going to be any problem with these valves. So we did load up the commodities 46 days before flight. And we're looking at that. Is that a contributing factor? Our specification is, is we should be good for 60 days. So we had loaded it 46 days before. We thought we'd be fine. Once we have loaded the propellant and the oxidizer onto the vehicle, we cannot cycle those valves at random. We have to be at the pad. We have to be powered up. And so that was part of our procedures was to cycle those valves 4 hours before flight. So we really didn't have any indication or reason to believe that we -- those valves would not cycle. Part of that cycling is just opening them for our flight procedures. So will we do something different? And that's exactly what we're looking at. We're looking at maybe we load propellent later. Maybe there's some different purge operations that we will make sure that we conduct to mitigate moisture. And so we're looking at all those things as potential to mitigate this problem going forward. And I'll turn it over to Michelle to add any additional that she's got.

Yes, John, I think you covered it pretty well. I'll just add that the valves, as you said, went through full qualification efforts, acceptance testing of each of the valves. We saw them operate on the vehicle. We saw them cycle when we serviced. We cycled a couple of them post servicing. So there really wasn't any indication prior -- during the operation, prior that there would be an issue.

And this is Steve. Just in terms of the flight readiness review process, I mean, I thought that process was very thorough. And we reviewed all the problems in the vehicle. I think the thing that was a bit of a surprise here, if you look back, we had a Pad Abort Test in 2019 at White Sands Missile Range and flew a very similar service module and had no issues. Cycled the valves, loaded, didn't have any problem with permeation. We flew OFT-1 in December of 2019, and also, no problems with that vehicle. It was out at a pad in a little longer time frame. We did a dry dress rehearsal. We did a wet tanking test for there. And so I think we didn't anticipate a problem at all. Would we have seen issues with Teflon in previous programs in NASA? It's been a very subtle thing, and it's been hard to kind of seek out. The Teflon is very important because it's very compatible with oxides. So most seals on these kind of valves are not compatible, so they use Teflon. Teflon in this case, permeated a little oxidizer. Oxidizer has an affinity for moisture, and so perhaps it was drawing the moisture in. And then we'll understand that a little bit better when we get the valves off, take them to Marshall, disassemble them and see where these corrosion products are. So...

We'll now go to Jackie Wattles with CNN.

Just to follow up really quickly on Bill and Joey's questions. Do we know any specifics about why there were only 3 or 4 valves that couldn't become unstuck? I mean were they -- is it possible there were like manufacturing defects for those? Or anything about why it was only some of them that seemed to be a persistent problem. And then also curious if you could provide kind of more exact time lines on when those oxidizers were added on the 2019 test flight versus the last time it was on the pad. If you can say like X number of days it was added before the launch attempt or before the problem was identified versus what happened in 2019?

In fact, yes, I can answer that. And then John and Steve can add on if they'd like. So with regard to the first question of why those 4 valves perhaps remained stuck when we were at the VIF, we are -- through troubleshooting after that, we can see in the current traces of the valves that there is likely something going on with a number of the valves. And some are just better behaved than others. So we don't think there's anything unique necessarily in the valve. We found no -- nothing different in the manufacturing or the lot data. We've gone through all of that. We don't see anything different really in the acceptance test data for these valves. And so again, we think based on what we're seeing in our troubleshooting, that probably the majority of these oxidizer valves have some -- have some level of this going on in them. So I would say that perhaps those 4 either were a little -- had a little more of the corrosion products. Or in the case of some of the valves, we didn't have the direct access at the launch pad that we had back at the factory, so we weren't able to do all of the -- at the Vertical Integration Facility, we weren't able to put the direct heat on some of the valves that we were the others. And we could do that when we returned to the factory. So I would say that was a difference as well.

Jackie, this is John Vollmer. I'll just add that it was -- yes, 46 days for OFT-2 from the time we loaded the propelled and oxidizer until August 3. And on OFT-1, it was 35 days. However, we did have a wet dress rehearsal at 21 days into the cycle. Now that was something that we did on OFT-1 because it was the first time we were flying. And so the wet dress rehearsal was primarily to make sure that we had an integrated spacecraft and launch vehicle, that everything was operating correctly between the 2. So we wouldn't necessarily do a wet dress rehearsal for every flight. It was just that first flight. But anyway, to answer your question, it was 46 days for OFT-2 and 35 days with a wet dress rehearsal at 21 days where we did cycle those valves.

Next question comes from Eric Berger with Ars Technical.

A question for Stich. Can you clarify how many new missions -- or excuse me, how many missions that NASA's purchased from SpaceX and Boeing? I think it may be 6 each. I don't know, though. And would you need to negotiate a new contract with SpaceX soon since they manifested a Crew-5? And then finally, sort of along the same lines, when Boeing is ready to fly crew flights and you're sort of getting into more regular crew rotations, will they alternate with SpaceX? Or will they fly several missions in succession to sort of catch up?

Yes. Happy to answer the question, Eric. So both SpaceX and Boeing were awarded a total of 6 post-certification missions on the contract. And they both have 6. So for Boeing, we've given authority to proceed on 3 of those flights. And then SpaceX, we have turned on, as you said, through Crew-5. We know today that the Space Station will likely be extended past 2024. And so we're in the process of going through those contract actions and figuring out how to add additional flights likely to both contracts at some point. And that will become a little more apparent in the next months or so of what kind of actions we're going to go do for both. In terms of the long-term plan, our model had always been, and we really want 2 viable space transportation systems. And having Boeing flying to the space station, as John and Michelle said, is extremely important to NASA. When we get into the long-term rotations, we would like to see SpaceX once a year and then Boeing fly once a year as well. And we're looking forward to the day that we get into those flights where we're handing over from a SpaceX vehicle on orbit to a Boeing vehicle and vice versa. So...

Next, we have Mike Wall from Space.com.

Just a quick question about these valves. I just want to get a sense of -- I mean, like are these valves commonly used across a lot of different spacecraft and a lot of different missions? And if that's the case, has this sort of problem ever cropped up before in the research you've done? Is there something that has been observed, this sort of moisture seepage that leads to corrosion? Or is this something that you just hadn't seen in this type of valve before?

I can start, and then maybe Steve and John can jump in as well. So these valves, they are -- the supplier of the valve is Marotta, and they are part of a product line of valves. So they're based on heritage valves that Marotta has. There were some slight changes of configuration, dimensions and such for Starliner exact specific application. But they had not been used previously for oxidizer. So it's the first -- so they have a history, but they have not been used for oxidizer. That being said, though, they did go through a full qualification program, material compatibility program, and had requirements that were consistent with our operation and the way that we did operate them on launch day. So that's the background of the valves. And as far as -- and again, I'll let John and Stich chime in as well, but there have been previous incidents of permeation of oxidizer through Teflon seals.

Yes. I can talk. I mean we have seen similar problems with oxider permeating on various valves. The one that comes to mind today is on the space shuttle on the orbiter. We had primary RCS thrusters, about 870-pound thrusters that were used to maneuver that vehicle. And we would have a similar problem before we instituted some purging when the vehicle was back in the Orbiter processing facility. We would see moisture forming with the oxider vapor and forming nitrates, and then causing damage. And then we would get on orbit, and many times we would fire a thruster and we would either fail that thruster off, the valves didn't open properly or in a few cases, it failed leak and so we had to isolate a manifold. And so it took a little while to figure out what was going on. It was eventually moisture. We remediated that problem with always having a purge on those clusters, and then we're able to do some changes to the processing and eliminate the problem.

Next is Michael Sheetz with CNBC.

Questions for John Vollmer. I'm curious, if I understand correctly, these valves are supplied by Aerojet Rocketdyne. And I'm curious whether or not the company is reexamining its existing contracts and suppliers for those valves. Or are there other valves out in the marketplace that would be compatible with Starliner? And if so, have you guys taken a look at possibly purchasing different valves from another supplier for future Starliner missions?

Thanks, Michael. So we've been working very closely with Aerojet Rocketdyne. They have been part of our investigation team. They have also involved their supplier, Marotta, who is the supplier of those valves. We have looked at the valves. We've looked at the basic design. The basic design is sound. We are looking at, are there some slight modifications we need to make to the design. Is there additional purging that we need to do to make sure we don't get moisture. But no, we believe that the system design is sound. And so we just need to work through what the remediation is that's going to allow us to use those valves. We have not gone and looked at other suppliers at this time. Aerojet Rocketdyne is our propulsion system supplier, so they provide the entire system. And we rely on them to help us with making sure that we've got an end-to-end system that will perform.

Next is Haygen Warren. And Haygen, before you ask your question, if you can state your affiliation.

Haygen Warren with NASASpaceflight. My question is for Michelle. How is the team able to begin repairing the system when the root cause isn't fully identified? And what does the current repair process for Starliner look like?

Thanks, Haygen. So with regard to determining the remediation before we fully verify the root cause, I would say, going back to my previous comments, we've been working through the fault tree pretty diligently pretty early on. It was -- we were narrowing down to this as the most probable cause. So knowing that, that is the most probable cause allows us to evaluate the remediation techniques, as John mentioned. So the team can continue to work those as we continue to work through verification. The work that we've been able to do here in the factory, the troubleshooting that we've been able to do with desiccant and with heaters has also, again, given us data that supports that root cause as well as given us information that helps us determine that, that is the correct or that is the path for remediation. So all of those things we can do as we continue to do the final verification of that root cause. So pretty confident in that -- in the path that the team has been working through on that. With regard to repair, so as mentioned, we're a taking a couple of the valves off for further verification. Those valves will be replaced, so they'll have clean valves in their space, in their place. And then as John mentioned, we are looking at what we can do to limit the moisture that could potentially get into the valve, such as desiccant, maybe a slight valve tweak to prevent moisture ingression as well as looking at -- at least for service module 2, adding the addition of heaters that -- to the valves that then allow you to free up those byproducts, those corrosion products, and allow the valve to cycle. So the team is off designing that as well, and we'll have a design review in the next couple of days on that. But that would be a -- the second part of that repair and remediation. And again, through the troubleshooting efforts that we've been able to do on the factory, we've seen that be successful in freeing up the valves. And so that gives us confidence that we'll be able to move forward with that remediation plan.

Next is Emre Kelly with Florida Today.

I just wanted to follow up on Bill's question potentially to Michelle. Around that launch time, we had some pretty intense thunderstorms, if I remember correctly. And I just wanted to double check. So far is the idea here that it was just general crazy Florida humidity or potentially these storms that rolled through? Because with the former, Florida is always a little crazy humid. So I'm just trying to wrap my mind around where this humidity could have come from.

Yes, Emre, I could address that. Yes, so you are right, we did experience some storms while we were out there, both at the VIF and then when we rolled out to the launchpad. And in fact, the day prior, we had a pretty significant storm. We had some indications on the vehicle at that time that there could be condensation in the vehicle or some type of water ingression. Once we were able to get to -- so that was on our -- or is on our fault tree. Once we were able to get to the vehicle and see all of the seals that are between the crew module and the service module, we don't see any significant leaking. So we don't think that it was just pure rain getting into the service module. We do see some indications of moisture or condensation or -- having been present, which again supports the fact that within the service module, based on the environment, that we were getting some condensation which, again, could contribute to this or support this root cause. So we're seeing both -- we're seeing that physical evidence on the vehicle. But it's not just -- we see no evidence of just pure rain ingression. It's more of a condensation effect.

Next is Paul Brinkmann with United Press International.

A question for Steve Stich. I just want to like zoom out a little, I guess, like astronauts and access to ISS. I mean is NASA assuming that Boeing will succeed eventually? I understand NASA has full faith and confidence in the company selected to provide commercial crew launch. But these delays are not insignificant given the original schedules. And I believe there was a third proposal that NASA supported earlier. So in a general context, what has NASA done or is doing to ensure success in case any commercial crew launch provider can no longer deliver for whatever reason? If a provider can no longer deliver on a specified time period, will NASA continue with only one provider? Or will another provider be brought in? And when or how quickly would that happen?

Yes. Thanks for your question. In the near term, what we have continued to do is we have a certified system with SpaceX. And at the end of October, we're going to embark upon our second crew rotation mission. We'll have the Crew-3 vehicle launch and come up to the space station, and we'll return the Crew-2 vehicle. And then we've already talked about the mission in the spring time. April 15 or so is the date, and that will be Crew-4, which is another SpaceX crew rotation mission. We have every confidence that Boeing will be flying crew soon. I look at -- back to OFT-1 and how well much of that spacecraft performed on orbit in terms of the systems, the guidance and navigation systems, propulsion systems, the thrusters on the service module. And all the rest of the life support, avionics all performed really well. That was a great checkout of Starliner, and it performed well. Now we found an issue on the service model that we got to go work on. Michelle and John have a good plan laid out of how to get there. Getting these valves out was a huge step in determining root cause. And we've already seen some success with remediation of moisture on the service module and also using heaters to free the valves up. So we'll get this problem solved, and then we'll have 2 space transportation systems like we want. We'll have Boeing and SpaceX both flying and fulfill the needs of our flights. And so that's our plan for the future. So...

Okay. But I guess I still want to know. Does that mean you're assuming that Boeing will be successful at some point?

Yes. I have every -- I have no reason to believe that Boeing won't be successful. I've seen the spacecraft up close. We've tested the parachute systems. We did a Pad Abort Test. We're working through the remainder of the issues with this particular service module and the valves. And so I don't really see any scenario where Boeing is not successful. The company is committed to these flights with NASA. It's important to Boeing, I can tell from the diligence of the team, the resources they've applied and quite frankly, the attitude and professionalism and the can-do spirit of the team to go solve the problem and move forward.

Next is Micah Maidenberg with The Wall Street Journal.

I just wanted to go back to the humidity. Maybe this is for Michelle. Like at any point, did Boeing sort of account for humidity in this launch? Like where would that come in, if it did? And the second thing is, are there any dissenting views about what caused the moisture in the system? Or is the thought that humidity caused it?

Yes, Micah, I can address that. So we do assess humidity within the requirement space. So the specifications do say that we need to be able to operate in humidity, the specifications that go out to our suppliers. We do also have purges on the vehicle to maintain the dry air and prevent moisture ingression. Again, it was a humid time of the year in August. We've looked at dew points. We've looked at temperature dew points while we were out there at the launch pad and also our -- at the purges. And like I said, we've physically seen some evidence of condensation within the service module. So all of that, again, supports that we had some of that perhaps going on. But we -- and that will be -- we'll continue to look at that going forward as part of the remediation and ensuring that we don't have that. Again, the previous test that we talked about, OFT-1, Pad Abort, SM hot fire, we did not experience that in the -- same valve in the propulsion system. As far as dissenting views of where the moisture is coming from, again, the team is working very, very closely, the Boeing, NASA, Aerojet team. So there is coalescence around this probable cause. We continue to work through each branch of the fault tree to make sure that there -- before we officially close a branch, it's got buy-in from all of those from the entire team, again, working very, very closely. There was some discussion early on because this is the vehicle that we use for environmental qualification tests. So there was some discussion early on about whether the referee fluid that we used -- so this -- the Environmental Qualification Test consists of acoustic testing on the vehicle, thermal vacuum testing and electromagnetic testing. And so as part of the acoustic testing, you need to simulate the commodities in the vehicle. And so we did have [ HSE ] in the oxidizer system. And so -- but that was chosen specifically because it doesn't -- it's not a water-based commodity. And so there was a discussion on that. We don't believe that, that's contributing. The system was cleaned, purged after that. We have valves that were removed after EQT and replaced and -- with the new valves that are on the vehicle also experienced this issue on the launch pad, so valves that never went through EQT. Then we have valves that were removed after EQT that we've put now through acceptance tests again and seen nominal performance of those valves. And so indications are, based on the selection of that referee fluid that, that is not a contributor, but that's certainly a discussion we've had.

Next is Jeff Foust with Space News.

A couple of quick questions, one for Michelle. How long does it take for this corrosion to be created on the valves when the oxidizer and moisture interact? Does it happen very quickly? Or is this something that takes time to build up? And then for Steve, do you anticipate NASA requesting or requiring Boeing to perform any specific tests to verify that the fixes that they make to the valves are in fact successful, and you're ready to proceed to flight?

Jeff, I'll take the first one. So with regard to the time of that reaction, so the reaction between the oxidizer and the moisture that creates nitric acid, that's pretty instantaneous. As soon as you get those constituents together, that's pretty quick. So then you have the nitric acid sitting there near the stainless steel or aluminum, and then that's a corrosion product or a corrosion process. And that is -- that we've determined could occur in the time frame that we had the oxidizer in the system in those 46 days, as John mentioned.

Yes. In terms of NASA requiring tests, I mean, one of the tests that we've already identified that I think is going to be very beneficial is -- and I talked about this, is sending some valves out to White Sands. And what will happen is we'll try to recreate the exact scenario that a valve went through, in other words, expose it to the environment in the C3PF and allow oxidizer to permeate across that Teflon seal. And oxidizer tends to want to suck water in, and that's what's causing this nitric acid that Michelle talked about. So we'll be able to replicate that whole time frame. And then we can sort of see how fast the corrosion grows. And the way we can do that is not by necessarily taking the valve apart, but then we can measure the current required to open and close that valve over time, and see how it's degrading and see that performance. And so we'll take a number of these valves out to White Sands and do that testing. And I think that is a key set of tests that we have planned to get to flight in addition to all the other materials testing that is ongoing right now. And we're a part of the team. We are a voting member relative to closing out fault tree blocks. And then we sit in on developing the test together. So right now, the test plan that Boeing and NASA have laid out is the one that we're going to use for flight. So...

Next is Robert Coppinger (sic) [ Rob Coppinger ] with spaceflight mag.

My question is for John Vollmer. With this latest delay, I mean, are you looking at just not making any profit on the start? In short, is the latest charges going to wipe out any profit you could make?

So I won't speak directly to the profit part of it. I will speak to -- like I said, there's no additional charges that would be going to the government for this. This is something The Boeing Company will make sure that we've got covered as we get this vehicle prepared. I will say that we are 100% committed to fulfilling our contract with the government, and we intend to do that. And so going forward, our focus will be on getting OFT-2 to flight the first half of this year, and then getting CFT to flight as soon as possible after that.

Next is Ken Kremer with Space UpClose.

I want to get back to the moisture question. I'd like to know in more detail what are you doing to actually replicate the moisture conditions and find the source of the condensation. Because it is always humid in Florida. And your Pad Abort Test, I don't know that you had -- and your hot fire, I don't know that you had hot, humid conditions when you did those tests. So I want to hear a lot more about the -- intentionally inducing moisture and drenching these valves maybe with water to find where it's coming in.

Okay. I could start on that one. So I -- so pad -- just to close on that one. So Pad Abort did take place in New Mexico, right? So not significantly humid conditions. OFT-1 was here in Florida as well as OFT-2. So we have looked at the difference in humidity conditions between those 2 times of the year. Certainly, we do see more humidity in August, probably not a -- that's probably not surprising for Florida, August in Florida. And again, we do have purges and such. There is on the side of the valve that we talked about, the valve positioning indicator where as we disassembled here at the factory, where we saw the aluminum nitrate products. There is one small vent hole that would allow -- could allow moisture or environmental conditions, environmental error to get into that into that area. So that's where we believe the path has come from. And again, going forward, we have since put desiccant in that area to prevent the moisture ingression and to make sure that, that side of the valve stays dry. And so that's what we're looking at going forward. And we'll look at the purges. We'll add the heaters, and we'll look at the length of time that we've got the oxidizer in the system to prevent those constituents from getting together and forming the nitric acid in corrosion.

But what about reengineering that vent hole? The desiccant only -- that doesn't keep -- prevent the water from getting in.

The desiccant is providing a dry environment in that area. So we've seen -- again, that's a part of our troubleshooting that we've been able to do on the factory and prove out. So it certainly prevents the moisture from getting drawn into that area. That's what we've seen. We are looking at options for that, for the vent hole.

Yes. I would just add in that we don't anticipate that this was because the valve was submerged in water or subjected to liquid water. This is more of picking up moisture from the ambient environment. And like Steve said, the NTO acts like -- almost like a sponge to absorb that moisture. So the moisture is attracted to the NTO, causing it to form the nitric acid. Now also, Steve mentioned that we are going to run some tests at White Sands, and we are going to try to replicate the conditions that these valves went through. So we will be taking them through a high moisture or high -- yes, a high-moisture environment and seeing what the effects are on those valves in test on the ground.

Next is Irene Klotz with Aviation Week.

For Steve, regardless of the availability of an Atlas and regardless of station ops, what is the minimum amount of time that you're showing on schedules between OFT-2 and Crew Flight Test?

Yes. I wouldn't say we have necessarily a minimum time identified. We -- and one of the things that John has not talked about and we are on a full-court press to get through this OMAC and RCS isolation valves. But we continue to make a lot of progress on the CFT vehicle. And so really, Crew Flight Test would be gated by when we think we've got the root cause identified on OFT-2, a successful OFT-2 flight and good data from that flight. And then we'll have to lay out a time frame of when that CFT flight would fit with the station schedule. For right now, our crew rotation missions, you've seen them. They are in the spring and the fall, and we have a time frame where we'll have both ports sort of tied up. But then other than that, we'll just have to find that right time for CFT. And maybe John can talk a little bit more about if you see some number of months or time line between the 2 flights. I don't necessarily see that. If we can get all the -- and we have a certain amount of certification work that we need to get done for Crew Flight Test. We have a number of VCNs and hazard reports and tests that have to be done in the vehicle. As long as those are met successfully, then -- and a successful OFT-2 flight, then we would get into CFTs.

Irene, this is John. So we're looking at OFT-2 flight first half of 2022, and we would look at CFT maybe by the end of the year. We'll have to -- like I said, our first focus will be on making sure we get OFT-2 launched successfully. And then after that, we'll look at the CFT schedule. So I mean, we like to see 6 months between flights. I mean something on that order. I mean there is some turnaround time, there's some refurb time. But as Steve said, we are aggressively working the CFT vehicle in parallel with the efforts that the investigation team, the remediation team and the test team is working on the OFT-2 vehicle.

And Steve, when do you expect to add a third crew member back to the Crew Flight Test?

Yes. We haven't talked much about that. It's probably too early to speculate. We'll have to sit down with the astronaut office and go through that discussion. And we just haven't had time to do that, Irene. So...

All right. We'll go over to Loren Grush with The Verge.

I'm curious if you know what might have happened if you hadn't caught the valve issue before launch and had taken off any way. And do you have confidence that the abort capability would have been able to counteract whatever negative side effects might occur?

Loren, I'll take this one. This is John Vollmer. So I mean, that's exactly why our procedures prior to launch were to go through, and we very methodically go through and check out all systems. This was one of those things that had to absolutely work or else we would not fly. So this is not an issue of we had -- if we had launched and not known this, we absolutely knew that these valves would be in the right position before launch.

All right. Now we'll circle back to Bill Harwood with CBS News.

Just 2 real quick ones for me. Are any of these valves of this service module being replaced? Or are you cleaning the valves and leaving them in place? Or using the same valves, I guess, I should say. And in all cases, did the valve itself fail to move? Or was it the position indicator or both? I was confused about that.

So we are -- as we've mentioned today, we're removing 3 of the valves. Those will be replaced with new valves. So those 3 will be replaced. And then as far as the valve not moving versus the valve positioning indicator, the valve is not moving. We have verified that the valve positioning indicator is working. That was a branch on our fault tree. Could it just be a bad telemetry indicator? But that has since been ruled out. So we do believe that it's -- in seeing it in a number of ways, we do know that it's the valve that is not moving.

Okay. But the valves that are staying on the vehicle, do you clean those? Or how do you get them in shape where they're ready to operate normally?

So those will all be subject to the remediation efforts that we've talked about, including desiccant, potential heater addition. Right now, we are -- it's not a baseline plan to clean those valves or flush those valves. That has been done on programs in the past, so there are some discussions. But right this moment, the remediation includes the limiting of any human error, moisture ingression as well as adding heaters to break up any of the products that might be created for service module.

I understand. I'm sorry, let me -- can I just squeeze this last one in? You mentioned corrosion products in the valve though. I'm just -- I'm curious as to -- is that a physical interference that's keeping the valve from running? I'm just wondering why you don't have to clean it. And I promise that's my last question.

So at this moment, we have all but one of the valves have been shown to operate. And so -- and the one that I mentioned, we're preserving for the root cause verification. So we haven't really tried all the tricks to get that one to move. So we've been able to operate them through this combination of desiccant and heaters. So at this point, right now, we believe -- and we're in discussions again. This would have to -- we still have to finalize all of this as we proceed to through flight rationale and such. But we believe that will be our remediation path.

We've now exhaust our time for today. Thanks to everyone for their questions and, of course, to our participants today for answering the questions. You can follow up and check out the latest status always on our blog and, of course, at nasa.gov/commercial crew. Thanks, everyone, for joining today.

And this concludes today's conference. Thank you for participating. You may disconnect at this time.