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SpaceX Rocket Failure Cost NASA $110 Million
An anonymous reader writes: On June 28th, a SpaceX Falcon 9 rocket exploded just over two minutes into its attempt to reach the International Space Station. It was a contracted mission from NASA to resupply the astronauts living there. Today, NASA associate administrator William Gerstenmaier said the price tag to taxpayers for that failed launch is $110 million. SpaceX is leading the investigation into the cause of the failure, and NASA officials faced tough questions about whether private companies should be allowed to direct investigations into their own failed launches. A similar inquiry is underway at Orbital ATK. NASA inspector general Paul Martin said his office is looking into the matter. Gerstenmaier added that NASA is thinking about making these companies take out insurance policies that would cover the cost to taxpayers in the event of another failure.
"Privatize the profits, socialize the risks."
That's how big business works in the USA.
What contract did they decide on instead? "Here's a bunch of money, no worries if the rocket fails"?
Painful, but we'll live. There hasn't been a rocket yet that has a perfect operational record.
maybe if nasa didnt stop its rocket development they wouldnt need to go to private companies..
as for where they could get the money to do so, well Military spending is a good first stop. why would we need to play in planatary wars if we are living up in space?
SpaceX policy seems to be to collect rich telemetry from each launch, so that fault investigation can proceed from the data, rather than the old approach of fishing for wreckage and piecing it together to determine the cause. Does NASA do things this way too now, or is it still using the old style of forensics?
If I ship something, it is up to me to pay insurance if I wish to do so. Otherwise, I take my chances on something happening to the cargo or it getting completely lost.
Why should the rocket manufacturer pay the insurance. That should be NASA's/the taxpayer's responsibility just like any other package delivery system. Let the insurance companies figure out a premium based on the success/failure rate of each rocket launching company and price accordingly.
Well, maybe more expensive Russian rockets cost what they do for a reason? Maybe promising 2-3 times cheaper price for the same (or better) service was a little too good to be true?
If this had been NASA's work instead, the cost to taxpayers would have been $770 million.
So SpaceX blew $110M worth of shit up and that's on the taxpayer?
Aren't private terrestrial shipping companies typically responsible and liable for the payload until they get it delivered?
This should have cost the taxpayers exactly zero. Why would NASA make a zero liability contract with SpaceX?
We should have hired SpaceX to build the Joint Strike Fighter. $110M for one capsule is nothing!
by Mike Buddha -- Someday the mountain might get him, but the law never will.
Better than multiple billions and astronaut lives lost for a cargo run. Hell, a shuttle launch that succeeded cost over a billion per launch.
Are these things not insured anyways?
Or this just mean that tax payer are funding insurance companies too?
Seeing how space travel isn't exactly safe and virtually all launch systems have at some point blown up, why wouldn't this be insured? You would think NASA or SpaceX would have some sort of insurance to cover for damages. Most of us have car insurance for example because statistically at some point virtually everyone has one car accident in their lifespan. As much as I find SpaceX a nifty company and a good idea. (It's so far had a pretty good track record for cost of launches) making it the most cost effective launch system, there should be some insurance you would think.
I think this is a good idea, but not for the reason Gerstenmaier says. What it will do is get another private entity to look at the risks of these launches and price them accurately. This will make it clearer in the budget how costly these launches actually are.
However, the cost for insurance will simply be added on top of the contract, so the tax payer pays for it either way. In fact, with insurance, the tax payer will pay more on average than without insurance.
The Orbital failure took out the pad, which was owned by the Commonwealth of Virginia, which had neither insurance nor reserve cash to pay for a new one. That caused a scramble to find the bucks to repair the pad.
These private launches were already NOT insured? Wtf
Practically every commercial satellite launch is insured. Typically runs $20-30 million for a $250-350 million satellite.
16.5 minutes. I don't think they'll miss it.
It wouldn't surprise me the cost could be 4X-5X if the gov't had lost the same launch.
Pretty much anything the gov't touches ends up costing way more than it should.
I can only imagine that Lockheed and United Launch Alliance's teams are all over this launch trying to discredit SpaceX. They cannot compete on price since SpaceX's ground-up engineering is so much cheaper than the Russian rockets they mark up. Last year they decided "We're going to cut our costs by half" - should have done that a long time ago. Seems like they're still struggilng to sort it out: https://en.wikipedia.org/wiki/...
Honestly, it blows my mind that NASA didn't buy insurance in the first place. I agree with the other poster that pointed out, if "I ship something I buy the insurance if I need it." However, just like other types of delivery companies, those costs eventually get passed on to the consumer. It's probably cheaper for if NASA just pays for coverage as they need it, rather than having SpaceX insure every launch for X millions of dollars.
If tax dollars are going to burn it's better that we get some data as to why a rocket launch failed and further the means of exploring space than tax dollars being wasted on some politicians transgender Filipino hooker.
Apollo 6 had two engines shut down early, but the upper stage burned longer to compensate, so the vehicle still made orbit.
The S-IVB didn't restart in orbit-- but since that was after it already made orbit, that counts as an in-space propulsion failure, not a launch vehicle failure.
Apollo 13 had a second-stage engine shut down early, but, again, the other engines burned longer to compensate, and the launch was a success. Launch wasn't the problem with Apollo 13.
So, I'd rate Saturn-V at 100% success rate as a launch vehicle, if the criteria for success is "getting the payload successfully into orbit".
Of course, with only 13 launches, it's not had as long a record as many other vehicles.
Nice video here: http://gizmodo.com/watch-all-1...
http://www.geoffreylandis.com
I'm not sure how he came up with $110 million in losses the taxpayer has to cover. The launch, part of SpaceX's CRS contract, is their cost. The contract says they have to deliver X number of supply runs. They lose a rocket, they still have to make X number of DELIVERIES. That means SpaceX has to eat the cost of a failed launch - part of the incentive to get it right. What the government (and tax payers) are on the hook for is the lost contents of the flight. I'm just surprised there was $110 million worth of food, fuel, oxygen and experiments. Seems a bit high.
It spreads the risk. That's all. My house probably is not going to burn down this year. But SOMEBODY's house DEFINITELY will. Insurance spreads the risk among policy holders.
How many rocket launch policy holders are there to spread the risk among?
I suppose an insurance underwriter could spread the rocket launch risk (and cost) among their auto and home policy holders. That will make them uncompetitive in the auto and home insurance market. So they'll have to keep the risk amongst similar policy holders for rocket launches.
Ultimately, just like houses burning down, some rocket launches WILL fail.
If NASA is forced (maybe by ignorant Congress who must "do something!") to buy insurance, then the cost of failure is still passed to the policy holders (eg, mostly taxpayers). Plus now you've got another industry (insurance) getting their fingers in the pie and making a profit. If Congress or NASA forces SpaceX to get insurance, then SpaceX will pass the cost of insurance on to NASA and ultimately taxpayers in the form of higher launch prices.
No matter how you slice it, the customers of rocket launches WILL bear the costs of inevitable failure. There's not that many customers to spread the costs amongst like there are for homeowners.
I'll see your senator, and I'll raise you two judges.
How in the world did they pack $110 Million worth of food, supplies and instruments into a Dragon cargo capsule? I wonder if someone is trying to throw in the cost of the launch vehicle to make it sound worse than it is, which from what I understand of the contracting method will be shouldered by SpaceX not NASA (no cargo to ISS, no cash). Even if the $110 M figure is correct it is a drop in the bucket as far as NASA's budget, its like 0.3% of what is being burnt on the Senate Launch System alone.
The Elon Musk traffic on this site is sure down lately. More so the longer he stays silent about the hideous F9 failure. So far F9 has over a 10% failure rate. I remind the reader that the Atlas V has a perfect reliability record through 54 launches. We tried to tell you.
I mean, what are the actuarial tables on that?
And we had our hearts set on getting that F-35 jet fighter!
Well, 3/4 of one anyway...
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Prisencolinensinainciusol. Ol Rait!
They don't want us to know the truth. About the firmament dome, about Antarctica, about density/gravity, or about the war in the skies. https://www.youtube.com/watch?... https://www.youtube.com/user/e...
"However, the cost for insurance will simply be added on top of the contract, so the tax payer pays for it either way. In fact, with insurance, the tax payer will pay more on average than without insurance."
Exactly, and this is a good reason to NOT pay a third party for insurance.
Insurance exists for infrequent casualty events that you do not have the balance sheet or liquidity to manage on your own, so you contract out for someone to provide you that balance sheet / liquidity, at a cost to you. For Property & Casualty insurance, the underwriter is certainly NOT looking to pay more claims that they collect in premiums (although they might pay up to 95+% of premiums as claims; they make most of their income on investing the float), and thus the average policy holder pays more in premiums than their mere risk alone would indicate.
In this case, the government should either demand a discount from SpaceX in order to absorb the risk of launch loss, or require an indemnity from SpaceX to cover the cost of recreating (some of) the payload, or somewhere in between. But both SpaceX and the US Government have deep enough pockets that they do not need to assistance of a third party to manage the resulting cash flow, at a net cost to them both. Launch losses are a cost of doing business - pricing + negotiating power can shift those financial risks between the parties as needed, but self-insure the launch to keep as much money as possible from leaking outside the tent to third parties.
You buy insurance when you cannot afford the loss. You *pay* a premium for this (e.g. if the probability of the event is 0.3, and the loss would be $1M, your insurance *premium* would be 300k PLUS some extra because the insurance company needs profit).
The government just writes a check and buys another.
The only reason for NASA to want insurance is to ensure profits for the insurance companies.
Perfectly possible for insurance to lower costs.
The reason is that the insurance contract can create an incentive for a third party to observe, oversee and comment on the activity. And enforce compliance by tying it to the insurance rates and coverages. A good insurer, with clever actuaries, accountants and decent risk-management personnel can reduce the chances of accidents, oversights, shoddy work, corruption, etc.
Now, in the real world this often does not happen due to corruption and perverse incentives, bad regulation and laws, protectionism, etc., But it is certainly possible to set up and maintain structures that lower costs and reduce waste/accidents including an insurance component.
No, the same argument doesn't work. Those programs were passed with the promise of actually improving things, not stemming a worse decline. And if you look at the data, the start of the decline coincides with the start of those programs. Public choice theory tells you why these programs don't work: they are subject to regulatory capture and rent seeking. Both economic theory and empirical data clearly tell you the same thing: these programs are harmful.
And if the economic examples don't convince you, look at other regulations and laws intended to safeguard and help the public: the fugitive slave act, eugenics and forced sterilizations, segregation, internment of Asian-Americans, and one of the worst killers, governmental agricultural and nutritional policies. And many of the people supporting those despicable programs are still the heroes of American progressives, the same people who are pushing a new generation of extremely harmful programs now.
Do you know who the "robber barons" were in American history? Railroad and steel industrialists, who obtained their wealth through government handouts and government granted monopolies. The robbed the public by corrupting politics.
Correct, corruption is the problem and reversing it is the answer.
If you try to pass more laws to fix the rent seeking and corruption of past laws, how do you imagine that works? Do you think there is a sudden outbreak of selflessness and competence in Congress? Of course not. If you pass more laws and regulations, you are going to get more of what we already have: more crony capitalism, more rent seeking, more regulatory capture.
To reverse the corruption, the only viable choice is to reduce the size of government and regulation. Government corruption, rent seeking, and crony capitalism are simply roughly proportional to the size of government.
Didn't congress give them but $230 Million for this kid of thing just recently?
Dang, this is half the year's budget. It's going to hurt the commercial crew budget. I guess this just validates the position of congress then that Space X just isn't ready enough to get their stuff human rated and they apparently need some more time to work out the kinks... Shame they blew up almost a half of the budget though...
"File to fit, pound to insert, paint to match" - Aircraft Maintenance 101
Of coure private companies should be allowed to investigate their failures. They just shouldn't have an exclusive right to do so. They pay for their investigation, the government pays for it's investigation, any other involved parties pay for their investigation. The data isn't kept secret. (Not being secret doesn't mean that what it means will be obvious, hence the plausibility of multiple investigations.)
I think we've pushed this "anyone can grow up to be president" thing too far.
All I'm going to say is it's still cheaper than NASA building one and it blowing up.
didn't do enough of them. there were design issues that would have surfaced . wikipedia on a friday night when you're bored
When did NASA pay for any of its failed launches? When did the big boys it usually contracts with pay? When did the Russians pay for their failures? This is bullshit.
So the risk instead would be spread out into a higher launch fee (taxpayers) and higher insurance fees for everyone (taxpayers).
The insurance would make the cost of the launch a lot higher, and NASA (taxpayers) would have to pay that.
Money doesn't grow in insurance companies either - they are re-insured and the cost is spread out to everyone.
But I guess it would look better for NASA?
(That said, I thought insurance was involved already. At least for individual projects blowing up?)
You know, NASA is not just handing this money to them, right?
"So long and thanks for all the fish."
Bet the astronauts scheduled to be transported into space by SpaceX in 2017 are loving this. There's nothing more comforting than sitting on tonnes of rocket fuel in a craft built by the lowest bidder. Oh well, at least the Russians are competent. So there's always a plan B.
Okay, we lost 110 million dollars on this failure. But, if each launch is about half what ULA charges, what has SpaceX saved the US tax payers over the past few years? We lost CARGO. Big whoop.
What's lost in all of this is a Falcon 9 is a third the cost of a Delta IV. So while yes. NASA is taking the risk and SpaceX is making the profit. That profit is costing the taxpayer you 200 million less than the traditional way.