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NASA Spends 72 Cents of Every SLS Dollar On Overhead Costs, Says Report (arstechnica.com)
A new report published by the nonpartisan think tank Center for a New American Security shows us where a lot of NASA's money is being spent. The space agency has reportedly spent $19 billion on rockets -- first on Ares I and V, and now on the Space Launch System rocket -- and $13.9 billion on the Orion spacecraft. If all goes according to plan and NASA is able to fly its first crewed mission with the new vehicles in 2021, "the report estimates the agency will have spent $43 billion before that first flight, essentially a reprise of the Apollo 8 mission around the Moon," reports Ars Technica. "Just the development effort for SLS and Orion, which includes none of the expenses related to in-space activities or landing anywhere, are already nearly half that of the Apollo program." From the report: The new report argues that, given these high costs, NASA should turn over the construction of rockets and spacecraft to the private sector. It buttresses this argument with a remarkable claim about the "overhead" costs associated with the NASA-led programs. These costs entail the administration, management, and development costs paid directly to the space agency -- rather than funds spend on contractors actually building the space hardware. For Orion, according to the report, approximately 56 percent of the program's cost, has gone to NASA instead of the main contractor, Lockheed Martin, and others. For the SLS rocket and its predecessors, the estimated fraction of NASA-related costs is higher -- 72 percent. This means that only about $7 billion of the rocket's $19 billion has gone to the private sector companies, Boeing, Orbital ATK, Aeroject Rocketdyne, and others cutting metal. By comparison the report also estimates NASA's overhead costs for the commercial cargo and crew programs, in which SpaceX, Boeing, and Orbital ATK are developing and providing cargo and astronaut delivery systems for the International Space Station. With these programs, NASA has ceded some control to the private companies, allowing them to retain ownership of the vehicles and design them with other customers in mind as well. With such fixed-price contracts, the NASA overhead costs for these programs is just 14 percent, the report finds.
And if you remove the pork barrel from the equation, with such fixed-price contracts, the NASA overhead costs drops to just 14 percent. This should be the main take-away.
Obviously it sounds like a lot, but i haven't been able to find any source on what they define as overhead. I also have no idea how much the normal overhead is.
It sounds like any cost not going towards a private company is accounted as overhead. Surely NASA has expenses internally that wouldn't make sense to call overhead.
Yeah, that's what I was thinking: people just want you to take a hammer and start putting in nails. Architects and engineers are overhead; just start putting up walls and don't worry about if it'll blow over in the first moderate wind.
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