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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.
NASA is the easiest go to for pork barrel politics.
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If space is so dazzling, and NASA that incompetent, why doesn't the private sector develop its own space program?
Do these figures instead indicate NASA is providing hidden subsidies to the private sector lined up at its feeding trough?
Going into space is an incredibly front loaded type enterprise. They aren't opening a a dollar store, they are sending people in to one of the most hostile environments known to man. They say "Measure twice, cut once", but when you have the lives of people in your hands, you measure tens of thousands of times to make sure the final cutting won't accidentally kill them! And before you go and say Blue Origin and SpaceX are doing it so much cheaper, yes, but that is because they are standing on a mountain of research & technology courtesy NASA. R&D done by NASA has given us billions and billions of dollars in spin-off technologies over the years, and I am sure if you charted it out, your return on investment is pretty good.
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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.
It's 42 for the normal overhead and 30 for the secret military overhead. Just thought I'd clear this up.
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A book of this title written years ago describes the mess NASA was and still is.
NASA= Not About Space Anymore
When President Kennedy famously said, "We choose to go to the moon...", a significant part of the decision stemmed from what was known as trickle-down economics. The idea was that buy investing a huge amount of money into NASA, but then require the agency to outsource much of their work to sub-contractors scattered around the country, the act of pouring billions in at the "top" (NASA) would see that money help lift a huge part of the national economy.
Unfortunately, all the big suppliers found they liked the idea very much. Then someone (no doubt in industry), came up with the idea of cost-plus contracts (in which the government pays a contractor the cost of developing something, plus a guaranteed profit margin. Which is, of course, the perfect inducement to allow companies to inflate their baseline costs through kickbacks that end up being paid by the taxpayer.
This doesn't necessarily mean that outsourcing to the private sector is inherently bad, just that, like anything, it needs close supervision and complete transparency. Corruption dislikes transparency...
Whether the numbers a correct - or not, why does any one care?
Seriously. If we could reduce the obscene cost of medical care by even one percent,
the NASA budget could be doubled and we could have a "single payer" health system.
And if you really want to explore "social welfare tax money" don't get me started on the military budget.
We are one nation under a bunch of god-awful, politically motivated morons.
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Because Nasa does just "overhead"..? They think NASA, maybe because is not private, never does something useful by itself? Without NASA you wouldn't have all these rockets anyways..
And Boeing, Lockeed...are cutting metal...Let me catch my breath! For one dollar given to Lockheed for the F35 how many cents did go to "cutting metal" ?!? These publicly-supported companies are overhead machines by themselves! I worked for some of them in a similar sector (high tech, main client is governments), you wouldn't believe the layers and layers of bureaucrats, managers, excel maintainers and powerpoint rangers, almost all of it is bullshit. And those are private companies, I recall! But they know that the government will always save them, because "jobs", and pork! From the guy or small company really "cutting the metal" (or writing the code or whatever) and the final customer, the lockeeds of the world can increase the price ten-fold! For doing what? escapes me! So stop pissing on NASA if you're not prepared to piss on Lockeed and co also.
If it costs money to do something and you hand it over to the private sector it will cost money plus profit to make it therefore more. If the argument is that somehow the private sector magically has better management then improve the management and reduce the costs but that simply is not true. Better management always equals higher cost as they always charge more than they earn.
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In it's day Apollo 8 cost 20 billion dollars. In today's money that's about 110 billion dollars.
The SLS costing the about the same in today's money as Apollo 8 cost in 1968 dollars - is actually a MASSIVELY cheaper and more efficient project then. .
The argument is pretty flawed if you make such a silly mistake. Now let's consider the claim about amounts and where they go. Are these people seriously saying that ALL of what NASA does with their share is wasted effort ? Does NASA not have a stake in doing their own testing and validation - making sure that they get what they paid for and that their astronauts will be safe ? Outsourcing that seems seriously irresponsible but even if you DID the private sector companies would have to do the same tests. Maybe they COULD do it cheaper -but cheaper isn't the most important thing here, quality matters a lot more than price for this stuff.
Why exactly is it a bad thing if a large chunk of NASA's budget is spent on the parts NASA does ? Why are these people arguing that NASA should outsource more than they do ? NASA is the customer here - and this seems like a thinly veiled attempt to use politics to force the customer to buy more.
NASA is the dumbest thing to complain about in terms of cost anyway - as a fraction of the federal budget they are a blip. Seriously NASA has had it's funding cut so consistently for decades that, today, they are basically a rounding error on the budget.
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Using what inflation index? Remember, NASA's costs are adjusted by the NNSI.
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Those overhead figures are no surprise at all. NASA has been around more than long enough for Pournelle's Iron Law to take over. The bureaucracy grows to meet the needs of the growing bureaucracy. Any space science that gets done is purely incidental.
This is a fundamental problem with government agencies. When private companies become inefficient, they (in an ideal world) either clean house or they are overtaken by their competitors. When government agencies become inefficient, there is no pressure on them to change, because they generally have no competition.
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You realize we're sitting on 45,000 pounds of fuel, one nuclear warhead and a thing that has 270,000 moving parts built by the lowest bidder? Makes you feel good doesn't it?
This is the sort of idiotic criticism made by people with no understanding of accounting. Part of "overhead" is engineering and the engineering costs for designing a system like SLS are substantial. Since NASA is doing the engineering for SLS in house of course the overhead costs are going to be a higher percentage of their total. If they outsourced it, the overhead for engineering won't disappear - it will just go on the P&L for a different company. You could argue that a private sector company might be more efficient (not clear in this case) but they also would charge a mark up because they have to make a profit so you give some of that back. You can't just blindly compare overhead percentages without understanding what they are comprised of. Lower overhead does not necessarily equal a more efficient program, especially when it is in design phases. Just because the money didn't go to a private company doesn't necessarily mean it was money wasted.
You can argue whether SLS is pork or not and that's a separate issue. There is plenty to criticize about the program. But this argument about overhead is just someone who doesn't understand accounting naively comparing percentages they don't fully understand.
I would like to remind you that about a trillion dollars a year go toward "defense".
The actual number last year was around $600 billion but your point still stands. Coincidentally our federal deficit in 2016 was also right around $600 billion so we basically borrowed every penny we spent on the military last year. So thank your grandchildren for the debt they'll be paying off because we think it necessary to support a military that is grossly oversized but are unwilling to tax enough to pay for it.
If you want to talk about pork, you aren't talking about spending money on science, you're talking about defense spending.
Truer words have never been spoken. NASA is a rounding error compared to the wasteful spending in the defense department.
NASA is a pork barrel project and isn't about space anymore. It was appropriate for the era of getting to the moon and should now get out of the space game and be replaced with separate organizations for supervision and mission funding of private contractors as has already begun. Going to the moon was actually about shifting the high cost of rocket development as well as putting a pretty face on large rocket tests. It was a PR thing. The defense department got their rocket tech which they were going to get one way or another but the public for it's money got modern satellite telecommunications and boosted electronics developments.
NASA over designs things with the greatest chance to work the first time but it takes longer and costs more. The economical way of design is to launch and use cheaper prototypes in the field and to actually want things to explode a good portion of the time. With every failure you improve the design and know what to look out for. It's simply too expensive and slow to try to anticipate everything. Better to be judicious and do your best and then learn as you go. Better to build ten rockets for the price of one and expect at least 7 to fail in the first batch. You ultimately succeed and do more for the same money.
Imagine what NASA could do if it didn't spend 65 cents of every dollar filling out Freedom of Information requests from industry lobbying groups with patriotic sounding names!
From the summary:
"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."
Iron Law of Bureaucracy
You might want a one-off widget which costs $100 to make for every launch, but if the engineering into that widget takes decades to get people to be able to engineer, years to put in place the business infrastructure to supports, months to train up the skilled labor to build, etc then it isn't really $100. Now, if you only need that widget every decade or two it gets even worse because you also have to pay for maintaining that organization which likely has to maintain a very high tech level of production simply to build it when it is needed. At the same time you have to deal with politicians demanding where all the money is going because they don't want to approve the project (but also don't want to deny it) you are keeping 1,000+ such companies alive for and have to maintain the paperwork to know who is needed for what throughout that chain. All of that costs money and all of that ultimately goes in a pretty well dispersed manner to US citizens.
If you want to look at "overhead" look to the stock market, any fortune 500 company, Silicon Valley, etc. That's where you have excessive sums of money being funneled to individuals.
Money exists to facilitate trade, it is only waste when it is pooling in a drastically uneven manner with some individuals more than others.
I agree. I worked for NASA for several years. There were NASA people doing useful work. I did computer programming along with several others in my small group. At the time I thought it would be more economical to hire more government workers. The purpose of a government agency is not simply to transfer money to private contractors, so the presentation is flawed.
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This is the epitome of news reporting these days.
Step one: gather information to report on something you don't understand (e.g. how to do a manned flight mission)
Step two: make assumptions about a detail you learned on a subject you don't understand (e.g. how to do a manned flight mission)
Step three: complain about money spent (Bonus points for calling out NASA and how successful private industry is)
Step four: compare the risk of two things that are just not relatable (the difference of risk between unmanned and manned flight is laughable)
Just to point out, there is a dedicated team at NASA focused on the safety of everyone involved. This is "overhead".
There are people for quality assurance. This is "overhead".
There are system engineers.
There are people who manage the process.
There are managers at the project level.
There are managers at the mission level.
Personnel managers.
Facility managers.
Security.
Independent reviews.
Do you really want to be known as the one who cut one of these pieces when a rocket carrying people blows up? I'm not saying that the private industry can't handle this. I'm sure they will some day. But to assume they won't be exponentially more expensive???
Look people. Space X saved millions of dollars by borrowing decades old lessons and in some cases even algorithms and hardware from what NASA accomplished. Maybe private is the future, but how can we be so arrogant as to assume that our current success is unrelated to the hard work of people for the better part of a century?
Step five: inflammatory news piece to get your name out there.
"The new report argues that, given these high costs, NASA should turn over the construction of rockets and spacecraft to the private sector." I thought contractors already build NASA's rockets?
A lot of things in the defense budget are things that people rely on.
None that are things that have to be covered under the defense budget. Most of the defense budget is for personnel and for war fighting machines (purchase and operation).
Food subsidies at one point were covered through the defense budget for example
I'm not aware of this being true in my lifetime if ever. Citation please.
The GPS cluster maintenance and upgrades are paid out of the defense budget.
Doesn't mean it has to remain that way. Wouldn't be hard to put that into the budget for NOAA or NASA or NTSB or the Commerce Dept.
Originally the US interstate system was a defense project, though it's now funded through gasoline taxes.
The money for it never came out of the defense budget. The project did have defense implications but it ultimately was a civilian project that has been used almost entirely for civilian uses and funded by non-military dollars.
The defense budget covers a lot more than just war machines.
Let's not pretend that war machines and the people that operate them don't account for the vast majority of military spending.
After all, the Internet got its start as a DARPA project.
Which has fuck-all to do with the fact that our current military budget is bloated far beyond any reasonable defense needs.
Unless your goal is to drop bombs on places halfway around the world, there really isn't much economic reason to go into space. Satellites are the main exception, but you launch one and you're set for the next 7-15 years. That's why pretty much all the U.S. launch vehicles are actually modified ballistic missiles. They were designed (by the private sector under contract) with the goal of dropping bombs on places halfway around the world. And NASA got to re-use that tech at a price heavily subsidized by military R&D.
Need I point out that the initial goal of NASA, back when it was NACA, was to eliminate inefficiency in the private sector by generating a single, publicly available dataset of aerodynamic tests on standardized shapes. Sure private companies could run those tests themselves, but it was redundant and inefficient for each company to run the same tests and keep the data private. NACA ran the tests once and made the data public.
NASA shouldn't be (and for the most part isn't) in the business of developing rockets. They contract that out to the private sector. The problem is that Congress has been putting their fingers on the scales - mandating that certain contracts be awarded to certain companies, instead of allowing the proper bidding/test/award procedure that takes advantage of the market to deliver the most ROI per dollar spent.
that's not how it works. You make a guess about how likely you are to get in trouble for those people's deaths and use that to decide how many times to measure. If somebody's irreplaceable (either because they're a genius or just really,really rich) you don't risk them. I'm not being flippant. That really is how it works. And we've got centuries of business rules and relations to fall back on as proof. Hell, looks at Flint MI's water supply. Or the process of approving drugs and the high profile failures there. Or if you want to get really famous that monologue from the beginning of Fight Club.
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1. From a late friend who was a rocket scientist, she was an engineer at the Cape, and used
to complain mightily that the last years she was there, upper management were time servers,
and didn't want to sign anything.
2. How much of that "overhead" is administering contracts? Here's a working example: I work,
right now, for a federal contractor (civilian sector). I have my fed direct manager... and
another manager who administers our contract. And I *know*, for a fact, that I am paid
right in the GS range I'd be paid if I were a fed. And our taxes are paying me, and they're
paying my corporate manager, and his, and, oh, yes, for my company to make a good profit.
I've been here almost eight years. I work with someone who's been here well over 20... as
a contractor. But the Republicans don't want to *hire*, they want to outsource... so their
corporate buddies can make a profit (that's not pork, no, no....) And before any of you
say more, there are Title 42 reds, who have to reapply for their own jobs every five years.
Maybe NASA's paying so much overhead because they can't *hire* people to do the actual work?
It better all be over head, because after all they're the freakin' National Aeronautics and Space Administration!
Think Tanks are almost entirely purposed with creating biased academic like support for propaganda purposes. They do not seek truth, only as much truth that supports their paid positions and maybe invent clever fake science to undermine confuse actual science -- smoking is actually good for you! Some people they hire are honest but believe in the same things and if that changes they are fired. Others are just intellectual whores who sell their minds out for money, arguably worse than a whore.
Think Tanks owe their huge numbers to the Vietnam era where the elite and their corporations realized the power of academic institutions to influence public policy with troublesome facts, cogent arguments, and tenure protected free speech. An effort was put together to counter the mostly selfless honest intelligent free speech and a Nixon man led the charge in a warped paranoid view only a religious zealot could have.
A professor somewhere should get news time even more for a group of them but a think tank shouldn't get anymore attention than corporate spokes person... and they get too much attention already.
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And took the blame for the increased deficit, even though it wasn't their expense. The next time you hear some idiot hyperventilating over Obama's increase of the deficit, remember that.
Correct. We went to war and unlike every other time we've done that we did not raise taxes or take other extraordinary measures to fund our little wars of adventure because modern republican politicians break out in hives if you even mention the words "tax increase". In fact congress (republicans) lowered taxes because doing that is always politically popular even though only the wealthy saw meaningful benefit. In doing so our congress gave the bill for the pointless and expensive war to our children and grand children instead of behaving like responsible adults. Most of the money the US government borrows every year comes from the American people in one form or another. We are literally letting the government write IOUs to us while we have the delusion that the bill will never come due.