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Study Finds SpaceX Investment Saved NASA Hundreds of Millions (popularmechanics.com)
schwit1 shares a report from Popular Mechanics: When a SpaceX Dragon spacecraft connected with the International Space Station on May 25, 2012, it made history as the first privately-built spacecraft to reach the ISS. The Dragon was the result of a decision 6 years prior -- in 2006, NASA made an "unprecedented" investment in SpaceX technology. A new financial analysis shows that the investment has paid off, and the government found one of the true bargains of the 21st century when it invested in SpaceX. A new research paper by Edgar Zapata, who works at Kennedy Space Center, looks closely at the finances of SpaceX and NASA. "There were indications that commercial space transportation would be a viable option from as far back as the 1980s," Zapata writes. "When the first components of the ISS were sent into orbit 1998, NASA was focused on "ambitious, large single stage-to-orbit launchers with large price tags to match." For future commercial crew missions sending astronauts into space, Zapata estimates that it will cost $405 million for a SpaceX Dragon crew deployment of 4 and $654 million for a Boeing Starliner, which is scheduled for its first flight in 2019. That sounds like a lot, and it is, but Zapata estimates that its only 37 to 39 percent of what it would have cost the government.
Seriously, when you're being compared to notoriously expensive "cost-plus" contracts with (largely) military contractors, it's not hard to emerge as the cheaper option.
XML is like violence. If it doesn't solve your problem, you're not using enough of it. --AC
In other words, NASA shot itself in the foot and could have had a much bigger budget. That's the problem with saving money in a bureaucracy: it will be used against you as an argument to cut your budget next year. Better not to do it in the first place.
Shutting down free speech with violence isn't fighting fascism. It IS fascism!
Zapata estimates that [ the cost of a SpaceX crew deployment ] its only 37 to 39 percent of what it would have cost the government.
Sounds like it's time to sell-off NASA's space operations (or maybe just the non-exploration parts) to SpaceX.
They seem to be doing a much better job of it. More innovative, cheaper, faster turnarounds. Is there really any reason for NASA to do anything in LEO any more?
politicians are like babies' nappies: they should both be changed regularly and for the same reasons
Believe it or not, there is a fair bit of accountability in terms of how money is spent in the government. The folks at the Government Accountability Office can be real dicks. They answer to Congress, not the Executive branch.
Congress from time to time remembers that they do in fact control the purse strings, its the one real power they have over the Executive.
Of course ULA got nothing from NASA either. Nope, not a single dime from absurd cost-plus contracts.
Yet they never did. Could of, would of, should of. Too busy lining the pockets of ULA executives.
Miss you, buddy.
Really? What I took away was, "Look how much more efficient and effective private enterprise is!"
You need to read the Federal Acquisition Regulation and the NASA supplement.
The maximum profit most contracting officers will allow is 8%, which is lower than private industry, and they compare the hourly rates for the staff against other data sources.
Loosened pesticide regulations have a negative impact on native beelion populations.
The most exciting phrase to hear in science, the one that heralds new discoveries, is not âEureka!â(TM), but
"Could've, would've, should've," dummy.
As for your obvious feelings about fiat currency, the one thing people never seem to recognize is that there is no such thing as intrinsic value. Value is an entirely human, thus subjective, concept. Every form of currency is fiat because it is based on a common agreement that something represents value - be it gold or paper. The gold standard just puts an intermediate step between the currency itself and its imagined value.
"A few weeks after killing the U.S.A.â(TM)s world-famous moon-mission program, President Obama has ordered the space agency that operates it to focus on reaching out to Muslim countries."
Yep, Obama got lucky that somebody else picked up the baton for NASA.
The US federal government cannot run out of dollars, a currency it created out of thin air.
So it's like Bitcoin, but harder to fork? I need to get me some of these "doll Ars" of which you speak.
I'm waiting to hear that the study of the costs was so expensive, all of the savings have been lost...
This is why there is incentive to increase costs. More cost = more profit.
The government often asks for scads of reports and documentation to show that you are following their accounting, engineering, quality, ... guidelines and rules. This needs to be delivered in their format, that they then give to auditors to pore over for years. Then there are "compliance" folks at the contractors whose job is to ensure that all reports are being done according to the contractual requirements. These contracts will often reference multiple contradictory government and industry standards, setting the stage for a number of people to research and resolve these conflicts. All of this extra work is "allowable" (since the government cannot ask you to perform work without compensation) and simply gets worked into the contract, inflating the cost (and improving the profit). If you have a high tolerance for bureaucratic quagmires, then government contracting can be very lucrative.
On the other hand, a commercial entity simply says "rocket costs 65 million dollars". The contract is a standard purchase order. Nothing more.
Remember, You are unique...just like everyone else.
The US Government does not just print its own money. That would cause rampant inflation and all money would become useless. Fiat money is made to transfer value from one transaction to another. Someone has to make the item or service that has value first. Bitcoin does print its own money, and its value is totally dependent on people giving fiat money to obtain it. Good question: where does that real money go in the bitcoin universe? Do they destroy it, or did they just double the amount of money available?
Really? What I took away was, "Look how much more efficient and effective private enterprise is!"
Private enterprise is NOT always more efficient or cheaper. Private enterprise generally does a terrible job on anything that is a public good. Roads, policing, primary education, basic research, and many other necessary things that do not have a direct and relatively short term profit motive are difficult for private enterprise to do effectively or efficiently. The notion that private enterprise is always better is idiotic, false and counterproductive. Use private enterprise for what it is good at and government for what it is good at and have them work together when appropriate.
There is absolutely no way the Apollo program could have happened with private enterprise footing the bill. Private enterprise was useful to contract for specific tasks but it never would have happened if we'd let the Invisible Hand of the market do its thing. The Hubble Telescope would never have happened as a privately owned and operated device.
Tesla Motors, despite all the hype and love showered here, shows no signs of ever showing a profit.
Lawrence Person (lawrencepersonh@gmailh.com (remove all "h"s to mail)
http://www.lawrenceperson.com/
Kind of a shot over the bow of the crowd suggesting the government shouldn't pick winners. Sometimes government is the only entity with a big enough footprint to get a new technology over the startup finish line. DARPA does it routinely for military tech and we have a universe of modern tech that started as a DARPA project. There's a long list of winners but what's the one 40% of America focuses on? The solar panel place. Not all of them pan out.
We shouldn't be limited to military tech for the government to pick winners.
That's our life, the big wheel of shit. - The Fat Man, Blue Tango Salvage
I'm not a zealot that demands we privatize everything, but it's practically certain that the private sector can and will do almost anything cheaper than a government agency.
-Styopa
Really? What I took away was, "Look how much more efficient and effective private enterprise is!"
You are right, but don't forget that NASA is a broadbased entity, and Spacex is more tightly focused. Each of the different type of rockets in the stable have a different purpose, and NASA has retained the balls to the wall candles to themselves, and farmed out the less expensive stuff with corresponding lower payload to entities like Spacex.
NASA has done the groundwork, The rest of the entities are picking up just like the system should work.
The shepherds did so well protecting the flock that the sheep no longer believed that wolves existed.
The government often asks for scads of reports and documentation to show that you are following their accounting, engineering, quality, ... guidelines and rules...
[snip]
On the other hand, a commercial entity simply says "rocket costs 65 million dollars". The contract is a standard purchase order. Nothing more.
True. But imagine what happens if you don't do the paperwork? Something takes longer than expected - this is research, remember - or, God forbid, actually fails. Whichever politician championed the project to begin with could be facing a Congressional subpoena to explain what went wrong. That person isn't going to want to wait 6 months for a post-mortem, he's* going to want all the info already compiled.
* And yes, let's assume it's probably going to be a "he".
Nope, no sig
Not trying to start a flame war or anything, but heard they pushed some bills, only companies with US can bid for stuff. (chose ISRO because of cheap and efficient reputation...)
Hyperinflation is almost always caused by the creation of too much currency. This is the definition of Hyperinflation from Wikipedia, notice the reference to money creation: "Economists believe that hyperinflations are caused by large persistent government deficits financed primarily by money creation (rather than by borrowing or by increasing taxation). As such, hyperinflation is often associated with some stress to the government budget, such as wars or their aftermath, sociopolitical upheavals, a collapse in export prices, or other crises that make it difficult for the government to collect tax revenue. A sharp decrease in real tax revenue coupled with a strong need to maintain government spending, together with an inability or unwillingness to borrow, can lead a country into hyperinflation."
and NASA has retained the balls to the wall candles to themselves
What they've retained is lots of balls but not quite close to the wall. Sadly, it seems that SpaceX has the better wall now with Raptor getting ready in the pipeline.
Ezekiel 23:20
Actually, yes, I found the actual details in the numbers to be quite surprising.
Working through the details, most of the cost of using the shuttle to resupply the station turned out to be due to the fact that one flight per year was enough to deliver the cargo to station, but that's not enough to cover the fixed cost. The main reason that the shuttle was too expensive as a resupply vehicle was that its cargo was too high (all of the cargo that sixteen flights of both Dragon and Cygnus carried to ISS, from 2012 to present, equals the cargo capacity of 2.5 shuttle launches).
The cost per flight of the shuttle drops remarkably with number of flights per year. From table 6, on page 30, the cost is $365 million per flight at a rate of one flight per year, and drops to $96 million per year at a rate of five flights per year*.
So, the surprising thing is that at five flights per year, the shuttle cargo launch cost would have been about equal to the Falcon 9/Dragon cost.
I didn't know that.
-------
*note that this is NOT counting the development cost of shuttle-- that is money already spent, so you don't get it back when the shuttle stopped flying. So the second lesson is that it would not be a good bargain to build a new vehicle with the same development costs as the shuttle.
Spacex cheaper because the bulk of the research already done by NASA and that cost was added in NASA launches but effectively Spacex got it for free.
That's funny because SpaceX is the only company in the US manufacturing their engines at such low costs. So if SpaceX "got it for free", why none of the other companies that "got it for free" hadn't done it before them? Only a very naive person could possibly believe there's no research involved.
Ezekiel 23:20
Technically, there was the RS-68. Of course, the RS-68 is a total crapfest, but it still qualifies as a rocket engine (hehehe :-p).
Ezekiel 23:20
I have news for you. NASA doesn't build rockets. They are all contracted to private enterprise.
It's just that SpaceX is cheaper.
I don't read your sig. Why are you reading mine?
The maximum profit most contracting officers will allow is 8%, which is lower than private industry
That's the problem.
If you tell me that my maximum profit margin is 8%, well, I'll do the math. If I spend $100M I can charge you $108M and I make $8M. If I spend $1B, I can charge you $1.08B, and I make $80M. Plus, the bigger the budget the easier it is to hide more profit in it.
Moreover, I not only want to do this, I have to do this, and i have to do it because 8% is lower than private industry. Even on the government dole, I still need private sector investment from time to time, and I need to be able to generate sufficient return on that investment to attract the money. That's tough when my competition is generating 15-20% profit margins. And while government contracts are great in some ways -- the government always pays, almost always on time -- they're actually pretty expensive to acquire. So when I get one I have to milk it for all its worth. To the degree possible, I need to spend the government's money to expand my infrastructure. Where I have to get private money for that, I have to generate maximal returns.
So, I need to inflate my costs as much as possible. Luckily (for me), it's *always* possible to inflate costs in R&D and production efforts. There are always other avenues to explore, due diligence to be performed.
Note to ACs: I usually delete AC replies without reading them. If you want to talk to me, log in.
Seriously, when you're being compared to notoriously expensive "cost-plus" contracts with (largely) military contractors, it's not hard to emerge as the cheaper option.
Cost plus contracts only make sense when the costs are difficult to ascertain at the time of quotation. When you are talking about something like the Apollo program, nobody really had any clear idea how much the whole thing would cost in advance because so much of it had never been done before. No sane private company would entertain such a deal unless the government was willing to absorb essentially all the risk. But at this point rockets aren't new technology so it should be reasonably straight forward to make a reasonable estimation of expected costs. (I'm a certified cost accountant in addition to being an engineer so I should know) Cost plus contracts for orbital lift services simply don't make sense anymore and the company that makes the rocket should have to experience some amount of risk.
So, the dollars per kilogram drops by a factor of 4 as the launches per year increases from 1 to 5, but the actual cost remains at 1.3 billion per launch even at a flight rate of five per year. But because the cargo capacity is so high, the cost per kilogram is about the same as the Falcon 9/Dragon, and somewhat lower than the Antares/Cygnus.
Looking more carefully, the recurring cost does include a budget of $1 billion per year for shuttle upgrades. So, if you did not do upgrades (essentially freezing the shuttle technology at what it is), cost would drop slightly (only by 15%, though, not a very large drop).
Ahhh, obviously penned with more opinion than knowledge
I worked for County and State government for about 8 years, with private engineering and consulting work on either side of my time in government
Government workers get paid less, are held more accountable and have tighter budgets than any private organization that I have ever worked for, including past employment with Motorola, Dames and Moore, and Level(3) . The thing is that so many right-wing politicians get elected by claiming to, 'get the waste out of government' that wages are artificially lowered (or prevented from rising), positions exist on paper, but cannot be hired because the legislatures will not fund actual hiring, and in many cases the agencies are intentionally hamstrung to benefit the (usually republican) politician's donors.
Throughout it all I have seen government workers soldier on and get their jobs done despite politicians who do not have their backs, and a public that in many cases repeatedly threatens and tries to bribe them
"will SpaceX ever show a profit?" Elon Musk says he's going to do a lot. Some of that he's already done, some of that he hasn't...yet.
What you missed is that there's no comparison on the engineering rigor. ULA is,contractually bound to a full space rating for all launches, and manned flight rating for designing everything that MIT touch space launch. SpaceX, on the other hand, got their space rating pencil whipped by the Air Force at congresses direction. The level of engineering rigor is just not comparable. Sure, SpaceX is winning, but the game is rigged.
So, ULA failed at the game of Regulatory Capture? Interesting. And they have so much experience at it.
His ignorance covered the whole earth like a blanket, and there was hardly a hole in it anywhere. - Mark Twain
I was referring to the numbers in the article being discussed here, which were not the generic "$/kg to LEO" but were the specific $paid-per-launch-for-delivery-to-ISS divided by payload-delivered-to-ISS.
The first re-usable rocket to launch to orbit was, of course, the space shuttle. So, NASA started doing reusable rocket launches back when Elon Musk was 11 years old.
Total pork-barrel.
Pork barrel or not, it was nevertheless the first re-usable orbital launch vehicle.
...And, so far, the only reusable orbital launch vehicle ever flown. (Falcon 9 recovers and re-uses the first stage: the easy one.)
SpaceX is privately funded; designed, built and tested their rockets in-house and for it's own reasons, and now hires them out to NASA.
NASA patting itself on the back.
Paying out giant bonuses, buying Russian rockets to actually do anything useful and occasionally smashing stuff into the ground or the ocean is not a formula for cost savings.
Face it, wholesale outsourcing of space would have never gotten the US to the moon.
"There's a silly notion that failure's not an option at NASA. Failure is an option here. If things are not failing, you are not innovating enough." - Elon Musk