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NASA To Pay More For Less Cargo Delivery To the Space Station (arstechnica.com)
A new report from NASA's inspector general, Paul Martin, finds that NASA will pay significantly more for commercial cargo delivery to the ISS in the 2020s rather than enjoying cost savings from maturing systems. "NASA will likely pay $400 million more for its second round of delivery contracts from 2020 to 2024 even though the agency will be moving six fewer tons of cargo," reports Ars Technica. "On a cost per kilogram basis, this represents a 14-percent increase." From the report: One of the main reasons for this increase, the report says, is a 50-percent increase in prices from SpaceX, which has thus far flown the bulk of missions for NASA's commercial cargo program with its Dragon spacecraft and Falcon 9 rocket. This is somewhat surprising because, during the first round of supply missions, which began in 2012, SpaceX had substantially lower costs than NASA's other partner, Orbital ATK. SpaceX and Orbital ATK are expected to fly 31 supply missions between 2012 and 2020, the first phase of the supply contract. Of those, the new report states, SpaceX is scheduled to complete 20 flights at an average cost of $152.1 million per mission. Orbital ATK is scheduled to complete 11 missions at an average cost of $262.6 million per mission.
But that cost differential will largely evaporate in the second round of cargo supply contracts. For flights from 2020 to 2024, SpaceX will increase its price while Orbital ATK cuts its own by 15 percent. The new report provides unprecedented public detail about the second phase of commercial resupply contracts, known as CRS-2, which NASA awarded in a competitively bid process in 2016. SpaceX and Orbital ATK again won contracts (for a minimum of six flights), along with a new provider, Sierra Nevada Corp. and its Dream Chaser vehicle. Bids by Boeing and Lockheed Martin were not accepted.
But that cost differential will largely evaporate in the second round of cargo supply contracts. For flights from 2020 to 2024, SpaceX will increase its price while Orbital ATK cuts its own by 15 percent. The new report provides unprecedented public detail about the second phase of commercial resupply contracts, known as CRS-2, which NASA awarded in a competitively bid process in 2016. SpaceX and Orbital ATK again won contracts (for a minimum of six flights), along with a new provider, Sierra Nevada Corp. and its Dream Chaser vehicle. Bids by Boeing and Lockheed Martin were not accepted.
Translated: SpaceX thought they needed to charge a premium to deal with bureaucracy but wildly underestimated just how much bureaucracy is required to interact with a multi multi billion dollar internationally operated property.
The private sector cannot do it cheaper. By definition. If the private sector can, you're not working at Capitalist terms.
The private sector and the public sector have fundamentally different goals when doing something. For the private sector, whatever is produced or provided is a means to the end, i.e. profit. For the public sector, the produced good or service IS already the end. No profit needed.
Now, all other aspects identical, there is no way a private enterprise can offer anything at the same price as a public provider, simply because he needs to slap profit on top of the cost. Usually, when you see a private enterprise offering something cheaper, you also lose an aspect the public provider takes into account that the private one doesn't give a fuck about.
We used to have a Bill of Rights. Now, with the rights gone, all we have left is the bill.
The Dragon 2 can carry almost as much back as it takes up. Orbital ATK can't bring anything back. Also, Orbital ATK can't carry crew members. That's not exactly a small difference.
And for an encore, they still undercut the price while flying on American-made rocket engines as opposed to Antares' Russian design.
So why are these being compared? Just because they both carry cargo to the same place on occasion?
Say that to all the "too big to fail" companies like banks and car makers.
"It's such a fine line between stupid and clever" -- David St. Hubbins, Spinal Tap
You act as if the private sector was in any way more competent. I am "blessed" with the chance to play with the security of a large international corporation. Incompetence and bureaucracy are rampart here. Being fired is possible up to a certain echelon, and up to that level there are actually fairly competent people working, simply because the incompetent ones get fired. Once you get to a certain level, though, you notice that incompetent idiots don't get fired. They get shuffled around. Mostly 'cause firing them is simply too expensive, or because they know either someone, or something about someone.
We used to have a Bill of Rights. Now, with the rights gone, all we have left is the bill.
Yeah, SpaceX has invented nothing new, vertically landing rockets have been described as early as 1950 by Belgian cartoonist Hergé. Even I could have developed a rocket based on that work, I just thought it was too obvious to waste my time on.
Blue Origin (who beat SpaceX to a vertical landing by a private company)
SpaceX landed their Grasshopper rocket in 2013. Blue Origin landed their much smaller New Shepard in 2015. OK, the grasshopper didn't go up to suborbital space because SpaceX decided to skip that step and go straight for an orbital rocket. Calling that "beating them" is a bit of a stretch, though.
I've worked for the government, and that was not the case in the least. I managed private sector vendors, and when I needed to travel 500 miles to go too their office, I got a decade old ford focus to drive there and back. When they came to visit me, they flew first class or took the company jet.
Yes, they technically had competition. But I can tell you right now that a) their competition was not really that competitive, and b) their business model was to look pretty and justify their continued existence while sucking as much money out of the government as possible.
Had we done their work in-house, even if it took 2x as many people, we still wouldn't have been flying first class and maintaining a private jet. Everyone decries government inefficiency, but at the minimum, government salaries, perks, and travel are highly regulated and bare-bones compared to most private sector companies. When multiple private sector companies are bidding for a government contract, they're all building in the cost of their gleaming campus, first class travel, golden parachutes, etc.
The issue with the government is that it's hard to get rid of positions once you make them. Or if you are making limited term positions, it's hard to hire and retain people for them, because the government pays so much less than the private sector. The only real benefit of a government job is that they generally don't go away, so you've got it for as long as you want it. (And here I'm talking true civil servants, not political/appointed positions.)
Velociraptor = Distiraptor / Timeraptor
Because that's a secondary concern. For the public sector, the product IS the main concern. Providing one that can fulfill the role it has to fill perfectly is the goal. Cost is secondary. For the private sector, the product only has to be good enough to fulfill the specs, what matters is doing it with as much profit as possible.
This is flatly untrue, and it's untrue for exactly the same reason that Marx's value theory of labor is wrong: It ignores the value of information or, equivalently, it presumes that all players have exactly the same information and knowledge. I'll grant that this was actually true for most of human existence, but it hasn't been true since well before Karl Marx was born.
The reality is that knowledge is never equal, and the competitor that develops more and better knowledge during their production process will be able to produce the same good (or perhaps an adequate good -- sometimes an important application of knowledge is to avoid spending on unnecessary qualities) for a lower cost. This means that incentives for knowledge creation are incredibly important. Public organizations almost never have the same incentives to develop new knowledge that enables production at lower cost, and therefore they don't. This is true even when the public and private organizations produce exactly the same thing.
I find it baffling that people go back to these tired arguments, since we as a species have conducted an almost century-long, massive scale (though it has shrunk considerably of late) experiment in private vs public ownership of productive capacity, and the results of that experiment have been incredibly one-sided.
Competitive private ownership consistently generates goods and services that are both dramatically higher in quality and dramatically lower in price. There are exceptions in cases of monopoly (natural or otherwise) which eliminates the competitive element and removes the incentive for knowledge creation, but it is consistently true in every other situation.
Note to ACs: I usually delete AC replies without reading them. If you want to talk to me, log in.
Are you kidding? Private sector is all about looking pretty and justifying their existence. In private sector, it is all about the personal brand and making people above you believe that you are valuable, usually via whatever made up metric or strained statistics are popular with whoever holds some pursestrings.
I'm curious what government contracts you've worked... Those comments don't reflect my experience in the field at all.
Government contracts are lucrative
Government contracts are indeed high-value, but they also carry far more restrictions than B2B contracts. You must have these demographics on your team, you must use these standards nobody else uses, and you must do all of this vetting and paperwork for your suppliers... Sure, the price tag is high, but the costs and logistics are high, too. I've seen far more profit per contract on B2B deals, where the client doesn't care how something's done, just so long as they don't have to do it themselves.
Selling to the government means that you WILL get paid
...as long as your product passes acceptance and hits milestones. Otherwise, you get a "stop work" order, and your project sits in limbo for a year while the lawyers try to figure out whose fault it is. Eventually, the budget gets cut, your company is accused of never delivering the product, and the whole matter is dropped (without payout), because the company wants to keep the client happy for future business.
you'll have a way to get your money, if only by not paying taxes in return to not getting paid (and if your country doesn't let you do that, well, find a better country).
Please clarify precisely what countries allow you to violate tax law to settle a contract dispute.
government don't go out of business and leave you sitting on raw materials for a contract that you suddenly can't sell anymore and they rarely cancel contracts.
That's adorable. Not only do they often cancel contracts at the whim of politicians, the requirements change in a heartbeat, and you're usually left holding the unused components. As an example, I was working a government contract when encryption requirements rolled out, just after the customer had approved designs including a SAN that didn't support on-disk encryption. A new part was spec'd, new designs approved... and $500K of equipment sits in a rack in a warehouse, with no customer willing to pay for it, because it no longer meets the contract requirements.
you simply don't have to deal with risks you're usually facing when dealing with private enterprises or (worse) consumers.
The risks are different, but there are still risks.
You do not have a moral or legal right to do absolutely anything you want.