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NASA Hoping To Create Super X-Prizes
Rei writes "NASA is attempting to use a strategy of handing out contracts as prizes, akin to the Ansari X-Prize, instead of the contractor-preferred method of bidding and having payment before work is completed. They are hoping to have prizes worth as much as one billion dollars. The only hitch? Congress won't let them."
This could turn out to be a good thing, Developer handles all of the R&D costs doesnt get a dime unless work is satisfactorily completed and cant go over budget.
only down side I see is it could also scare off buisnesses not willing to take the risk of spending all that money and then not getting the contract.
Congress doesn't care if a contractor gets actual results. All they care about is milking the various contractors for re-election contributions. Those who give the most get the contracts. That is so obvious that even a rocket-scientist should be able to figure it out.
If someone says he and his monkey have nothing to hide, they almost certainly do.
Head of NASA: Mr. Senator, in light of the recent (airquotes) "X-Prize" I'd like for NASA to receive funding to sponsor contract prizes of its own, in amounts up to..... (pinky to corner of mouth) ONE BILLION DOLLARS.
N4st0r, trixx0r h0bb1tz0rz! Th3y st0l3 0ur pr3c10uzz!
NASA needs to create a $10 million X-Prize going to the congressman that can secure them the most funding.
Nasa usually does their own testing on most of their stuff.
Even those who arrange and design shrubberies are under considerable economic stress at this period in history.
Worker saftey and standards are somthing that shouldnt be shoved aside in the quest for scientific advancement on the cheap...
If people are willing to take the risk, why not let them. Certainly when worker safety is being compromised through exploitation it might be worth worrying about, but I fail to believe that the test pilots for SpaceShipOne didn't have every option to decline to fly. They were being paid plenty of money to voluntarily take a risk. If they choose to take the risk let them.
Jedidiah.
Craft Beer Programming T-shirts
This space station will cost only 3 billion dollars
5billion...
10 billion...
15 billion...
20 billion...
30 billion...
and going and going.....
verses
NASA would like to propose a new space station modual that has X characteristics and they'll give the first team that creates one that fullfills that need for 1 billion dollars and won't pay out a penny for those that don't
It's called being a smart shopper you do it every day (hopefully) why shouldn't they?
Easy they wouldn't be able to control which team "wins" since the best product would win rather than the winner being picked by the current "political process" of lowest bidder/cost overruns.
RTFA... hell, read the bloody summary!
They'd do it because they'd only pay for delivered results - no more paying for billion dollar Lockheed projects to have them go "oops, we messed up and you'll have to pay us another four billion to get it working..."
It's too much of a risk. $10 million for X-Prize is fine because that's doable for a corporation, but $100 million - $1 billion + is just way too far out there.
Microsoft is sitting on $40 billion in cash. I'm sure there are a number of companies with visionaries at the helm who'd love to throw cash at the problem - Richard Bransom of Virgin, for example.
So rewarding open ended contracts, often leading to billions of dollars wasted on dead end projects is being more careful with your money than making companies produce results *BEFORE* they're paid?
That's an interesting take on this, IMO.
Precisely. Congress won't vote to dramatically increase NASA's ability to award prizes, because they lose control over the ability to grab pork for their constituencies. Even if prizes are restricted to Americans (likely, since they don't want to be awarding multi-million dollar prizes to foreign economies), the chances are essentially n/300 million, where n is the number of people in any particular Congressman's district, that a prize will be awarded where that Congressman wants it to be. Now, for a state like Texas, with about 8 percent of the nation's population, a one-in-twelve roll of the dice might be okay, but it probably still doesn't compete with their average take on contracts, which I (without any evidence) seem to think is higher.
The Spoon
Updated 6/28/2011
So let's say the idea is 10 mil to get a man into orbit. OK, so they do it for 3 million. So they find a more cost effective way of doing things, which can be used in future spaceflight technology, and leads to greater savings in the long run.
But far more important that that, there's no way for the project like this to go overbuget. Look at the history of the shuttle, and you'll see a project that far exceeded it's initial cost estimate. Once you've sunk a few billion, though, it's a hard to back out and lose everything to save a billion or two. Especially when you've made promises to everyone and their mother to get the funding in the first place. This is what really saves you money.
As for the idea that companies wouldn't take the financial risks if uncertain of a reward, it's demonstrably untrue. This happens in the world of defense contracts all the time. Most large defense contractors, especially in areospace, have lost large sums of money developing prototypes, in failed bids to secure larger contracts.
As a final note, there are already congressmen who have made careers out of attacking NASA's budget. They point to the billions invested in space flight, and the lack of any visible progress. I can't imagine a program that guarantees results would make that any easier.
For one, who is to say they won't overpay for something?
OK, we'll leave aside the economic tautology that the proper price of something is what someone's willing to pay for it. Let's just look at this important fact: Until the project produces, no money changes hands. This contrasts with the current system, when NASA makes a wishlist, a corporation purports to fulfill it, and then everyone walks away with the cash whether or not the project actually comes to fruition. At least in the new model, no money is "wasted" until there is an actual product.
But wait. What if NASA says "Space Probe Frobozz is worth $10M to us" but company X can build space probe Frobozz for only $3M? Aren't we "wasting" $7M? No. NASA paid what it thought was reasonable. Company X made $7M -- which is a good incentive to get into the business. If you only pay companies for the cost of materials, they're not gonna line up to service your mission. The idea here is to tap the very powerful profit motive (perhaps you've heard of it?) so eminently a part of the American experience.
Let's leave aside that this completely subverts your first argument. Are you saying that "major players" will be scared away by a return on investment that is too low, so we should pad it? Obviously, companies will want to make a healthy profit; if NASA sets the prize too low for space probe Frobozz, then no one will step up to make it. The solution of course would be to then raise the prize money. At some point, one of two things will happen: (a) The prize gets high enough to entice companies to compete for it or (b) The price gets high enough to exceed NASA's estimate of the value of space probe Frobozz, so the contest never yields Frobozz. Either of these are valid and proper economic outcomes. You want Frobozz so bad? Cough up for it.
Well, if I were the CEO of a large publicly-traded company, I would hope I understand basic economics, including the fact that risk underlies all economic activity. I'd know that competing in good faith is about all my company does, every day, and is something to be neither feared nor ashamed of.
Again, that's how it goes, except of course it hardly ever goes that way. Your biggest competitor seems to have stolen a march on you, but then, that means you're not economically viable. But most likely the research you've done will be "recyclable", because you've learned a lot about whatever was being pursued. Ah, competition continues, to the good of the American public. If the odds were high that your competitor would beat you, you'd probably not invest the effort. But it's that element of risk that makes the market work.
I suggest that you take an economics class and learn the concept of "opportunity cost". There is never a time when money spent on one thing has no other
The Mongrel Dogs Who Teach
You're probably a troll. Congratulations. Why does Congress, or you, have the right to determine the risks that others will take for science? Living is dangerous. Even though thousands of humans are killed every year in car accidents, people still drive. Taking on that "ordinary" risk is acceptable, and yet taking on greater risk for the possibility of greater rewards isn't? Are legislators better at determining at determining what risks individuals should take than the individuals themselves? We're not talking about sweatshops where children are locked into virtual slavery: the engineers, pilots, and entrepreneurs who create and run small aerospace corporations are educated, experienced, and capable both of finding less risky positions and making informed decisions about their own safety. Who gave Congress, or you, the authority to make decisions for them?
I would love to hear from an American astronaut what they think about increased risk.
From here:
Cunningham [an astronaut on Apollo 7] departed from most current critics of NASA in criticizing the agency for becoming too risk-averse -- like our society, he opined. NASA is more afraid of failures than it's interested in attaining success in its missions. Abandonment of Hubble servicing was given as an example, and he criticized NASA's rationale for taking this action because of "higher risks" in placing a crew in the Hubble orbit by noting that NASA has put crews in that or similar orbits on no fewer than 90 prior occasions.
When astronauts place themselves in harm's way to accomplish such a mission, they do so with foreknowledge and willingly accept the risk, he said. Cunningham termed abandonment of the Hubble particularly galling because of its popularity with the public. He observed that since we reached the Moon, only two things that NASA has done have stirred public imagination: the Hubble and the Mars rovers.