Slashdot Mirror
Air Force Budget Reveals How Much SpaceX Undercuts Launch Prices (arstechnica.com)
An anonymous reader quotes a report from Ars Technica: In 2014, the U.S. Government Accountability Office issued a report on cost estimates for the U.S. Air Force's program to launch national security payloads, which at the time consisted of a fleet of rockets maintained and flown entirely by United Launch Alliance (ULA). The report was critical of the non-transparent nature of ULA's launch prices and noted that the government "lacked sufficient knowledge to negotiate fair and reasonable launch prices" with the monopoly. At around the same time, the new space rocket company SpaceX began to aggressively pursue the opportunity to launch national security payloads for the government. SpaceX claimed to offer a substantially lower price for delivering satellites into various orbits around Earth. But because of the lack of transparency, comparing prices was difficult. The Air Force recently released budget estimates for fiscal year 2018, and these include a run out into the early 2020s. For these years, the budget combines the fixed price rocket and ELC contract costs into a single budget line. (See page 109 of this document). They are strikingly high. According to the Air Force estimate, the "unit cost" of a single rocket launch in fiscal year 2020 is $422 million, and $424 million for a year later. SpaceX sells basic commercial launches of its Falcon 9 rocket for about $65 million. But, for military launches, there are additional range costs and service contracts that add tens of millions of dollars to the total price. It therefore seems possible that SpaceX is taking a loss or launching at little or no profit to undercut its rival and gain market share in the high-volume military launch market. Elon Musk retweeted the article, adding "$300M cost diff between SpaceX and Boeing/Lockheed exceeds avg value of satellite, so flying with SpaceX means satellite is basically free."
Yup, because lowest bidding contractor has *never* had any downside...
I'd rather the government went for quality over lowest cost when we are talking about launch a billion dollars of something that you are self insuring. SpaceX is getting there on quality, but this comparison is still ridiculous.
The thing is, up until recently there was no lower price contractor. There was a monopoly ane one thing monopolies are good for is sqeezing money out of the government's coffers by the buckets.
That "billion" dollars most likely includes design costs and other one off costs that wouldn't increase if you just make two of the damn thing.
Like buying equipment, and building the facility to build the first satellite.
SpaceX are getting there with reliability, but Musk needs to learn to STFU when it comes to price sensitivity because for some customers thats not the driving factor.
Hi -- taxpayer here. You can STFU about price sensitivity, now, because the only people whose sensitivity to price matters are the people who are paying for the goddamn launches -- the US taxpayer. Cost is the driving factor for us, period. Every dollar not spent sending military or intelligence hardware into orbit is a dollar that can be spent elsewhere (like on our crumbling infrastructure, or our decimated social safety net.)
One sat
Two sats
Red sats
Blue sats.
Black sats
Blue sats
Old sats
New sats.
This one has a little star.
This one has a little car.
Say! What a lot
Of sats there are.
Yes. Some are red. And some are blue.
Some are old. And some are new.
Some are sad.
And some are glad.
And some are very, very bad.
Why are they
Sad and glad and bad?
I do not know.
Go ask your dad.
Some are thin.
And some are fat.
The fat one has
A yellow hat.
From there to here, from here to there,
Funny things
Are everywhere.
W..w..W - Willy Waterloo washes Warren Wiggins who is washing Waldo Woo.
Facts in the summary:
A) Company 1 (United Launch Alliance) refuses to lists net prices in a transparent way.
B) net costs seem to imply that SpaceX is about 7 times cheaper.
Then it states that SpaceX must be taking a loss.
BULL.
The company that refuses to lists net prices in a transparent way are the people that you should suspect of shenanigans. In this case, the evidence implies they are overcharging.
But I suspect that the comparison is not as bad as it looks. SpaceX may be launching only tiny payloads into low earth orbit while ULA may be launching huge payloads into high orbit.
excitingthingstodo.blogspot.com
you do realize that when you launch a 2 billion dollar satellite you are looking for success rate, not price...right?
Actually, you are looking at both. . Its called a cost benefit analysis.