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Specifically, the LASD evaluation is designed to determine if the applicant has:
·  Identified all energy and toxic sources and implemented controls to preclude accidental or
inadvertent release.
·  Evaluated safety critical aspects, potential safety problems, and accident risk factors.
·  Identified potential hazardous environments or events, and assessed their causes, possible
effects and probable frequency of occurrence.
·  Implemented effective hazard elimination, prevention or mitigation measures or techniques to
minimize accident risk to acceptable levels.
·  Specified the means by which hazard controls or mitigation methodology can be verified and
validated.
FAA System Safety Handbook, Chapter 13: Launch Safety
December 30, 2000
13 -3
13.3.2 Financial Responsibility Determination
Section 70112 of the Act requires that all commercial licensees demonstrate financial responsibility to
compensate for the maximum probable loss from claims by:
·  A third party for death, bodily injury, or property damage or loss resulting from an activity
carried out under the license; and
·  The U.S. Government against a person for damage or loss to government property resulting
from an activity carried out under the license.
Section 70112 also requires that the Department of Transportation set the amounts of financial
responsibility required of the licensee. The licensee can then elect to meet this requirement by:
·  Proving it has financial reserves equal to or exceeding the amount specified, or
·  Placing the required amount in escrow, or
·  Purchasing liability insurance equal to the amount specified.
The most common and preferred method is via the purchase of liability insurance.
The methodology developed for setting financial responsibility requirements for commercial launch
activities is called Maximum Probable Loss (MPL) analysis1. MPL analysis was developed to protect
launch participants from the maximum probable loss due to claims by third parties and the loss of
government property during commercial launch activities. Note that this is maximum probable loss, not
maximum possible loss. Generally speaking, MPL is determined by identifying all possible accident
scenarios, examining those with the highest potential losses for both government property and third party,
and then estimating the level of loss that would not be exceeded at a given probability threshold. If the
launch is to take place from a private licensed range and no government property is at risk, no
government property financial responsibility requirement will be issued.
An integral part of, and critical input to the MPL, is the Facility Damage and Personnel (DAMP) Injury
Analysis2: DAMP uses information about launch vehicles, trajectories, failure responses, facilities and
populations in the launch area to estimate the risk and casualty expectations from impacting inert debris,
secondary debris and overpressures from impact explosions. Together, the MPL and DAMP analyses are
used to determine the financial responsibility determinations necessary to insure compensation for losses
resulting from an activity carried out under the commercial license.
13.3.3 Environmental Determination
The environmental determination ensures that proposed commercial space launch activities pose no threat
to the natural environment. The National Environmental Policy Act (NEPA) of 1969, as amended,
requires that: Federal agencies consider the environmental consequences of major Federal actions; take
actions that protect, restore, and enhance the environment; and ensure that environmental information is
available to public officials and citizens before making decisions and taking action. The licensing of
commercial space launch activities, either for a launch or launch site, is considered a major Federal
action. Consequently, AST is responsible for analyzing the environmental impacts associated with
proposed commercial space launch activities. AST is also responsible for the assessing the applicant’s
preparation and submittal of Environmental Assessments and Environmental Impact Statements to ensure
compliance with the NEPA.
1 Futron Corporation developed the MPL Analysis methodology employed by AST.
2 Research Triangle Institute developed the DAMP Analysis methodology employed by AST.
FAA System Safety Handbook, Chapter 13: Launch Safety
December 30, 2000
13 -4
Figure 13-3
System Safety, Software Acquisition and
Systematic Software Acquisition Process
SRR – System Requirements Review
SDR – System Design Review
SSR – Software Specification Review
　
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