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Businesses NASA Space The Almighty Buck Science

Companies Skeptical of Commercial Space Market 192

Posted by Soulskill
from the come-on-it's-not-rocket-sci-oh-wait dept.
Hugh Pickens writes "The NY Times reports that Boeing and Lockheed Martin will happily sell rockets to carry astronauts into space, but are leery about taking a leading role in President Obama's vision for a revamped NASA that relies on commercial companies to provide taxi transportation to the ISS. 'I don't think there is a business case for us,' says Lockheed Martin's John Karas about space taxis. Both Boeing and Lockheed were stung during the last burst of optimism for the commercial space business about a decade ago. They invested several billion dollars — Lockheed to develop its Atlas V, Boeing for the Delta IV — in the hopes that the huge market for commercial satellites would supplement their traditional business of launching American military spy satellites. The market did not materialize, and what business there was went to European and Russian rockets that were cheaper. The hoped-for commercial market for space taxis hinges on one small company, Bigelow Aerospace, which is developing inflatable space habitats that it hopes to market as research facilities to companies and foreign nations looking to establish a space program."
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Companies Skeptical of Commercial Space Market

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  • by confused one (671304) on Monday April 12, 2010 @05:10PM (#31822642)
    For those who don't RTFA: ULA said the cost to upgrade the basic Atlas V to meet manned spaceflight would be $400M. They also said that if you want to build a heavy lift Atlas or Delta to manned spaceflight spec it would cost between $1B and $2B. And they want NASA to pay all the cost, up front.
  • Re:riiiight (Score:3, Informative)

    by icsEater (1093717) on Monday April 12, 2010 @05:12PM (#31822674)
    They're saying there is no market for investing in new expensive launch vehicles with all the quadruple redundancies and fail-safes imposed by the government. There's already a crop of old but reliable Soviet technology that does the same.
  • by ZonkerWilliam (953437) on Monday April 12, 2010 @05:42PM (#31823034) Journal
    Working with the Feds I can honestly agree, the mentality is vastly different. From perspectives of a federal agency, they submit a request for more funding if they need it, usually they get it (meaning, usually, a tax hike). What kills me is the way the whole funding is setup, if you don't spend all your funding you have to send it back, and next year you get reduced funding. So... all the agencies are motivated to spend all the cash on unneeded equipment at the end of the fiscal year just so they can get the same amount of money next fiscal year. So this tells us that basically Government is structured to waste money.
  • by Runaway1956 (1322357) on Monday April 12, 2010 @06:08PM (#31823390) Homepage Journal

    From experience in the Navy, I can verify the fiscal thing. Each quarter, we would "purchase" things out of our own storerooms, so that the books balanced within a couple of dollars. Across the board, we did this. The galley (or kitchen, for you landlubbers), office supplies, paint, you name it. The money had to be spent, or lost. At the end of the fiscal year, same thing. Spend right down to the very last dollar, never turn money in, or the next year your budget would shrink.

    Damn shame that things work that way. It's an incentive to waste.

  • It's gratifying to see they are doing this in a "bottom-up" fashion instead of a "top-down" organization, as so many of those are just front groups for various monied interests.

    There's been plenty of examples of supposedly grassroots events being in fact organized by large, highly funded Republican groups. It's just like those old protests against the Iraq War where the marches were organized by extreme groups like International ANSWER without participants knowing about it. True grassroots events of late have been few. In many cases, a sincere public is being manipulated by very organized groups.

    Every new federal agency becomes a permanent fixture, never to be disbanded. Every entitlement and social program will never be repealed no matter how bankrupt.

    Behold the real problem in American politics: corruption and ossification. The rest of the developed world ought to serve as proof that the welfare state does work, though it requires flexibility, constant reevaluation of programs, and relatively honest functionaries. The Tea Party folks are foolishly desiring an end to the government as a principle, when they ought to be electing better politicians who might bring a successful political culture into Washington.

    Though American by origin, I've lived in Finland for some years. From this vantage point, the entire Tea Party platform seems based on ignorance. Working towards a smaller government? No, you won't progress towards a higher standard of living without a stronger welfare state. (For all the supposed higher taxes of Nordic Europe, I have more spending money left over at the end of the month than I ever did in the US, and families here typically own two homes.)

  • by h4rr4r (612664) on Monday April 12, 2010 @06:35PM (#31823788)

    The alternative is the producer puts in a quote and is stuck with it. If they fail to produce for that, then you get your money back.

    I do not pay the costs of USPs truck breaking down when they deliver a package to me. They lose money on that delivery and make it up on the aggregate.

    If you make a bid and it is too little, too fucking bad. Cost plus allows these companies to bid far lower than they know it will cost to produce these things and then jack the price up later.

  • Re:riiiight (Score:3, Informative)

    by cheesybagel (670288) on Monday April 12, 2010 @06:46PM (#31823950)
    Actually they (and a lot of new corporations at the time) thought they were doing to launch dozens, nay hundreds, of commercial LEO constellation satellites at the time. Like, you know, Iridium. Well Iridium went bankrupt when their satellite phones couldn't compete with terrestrial cellphone networks. As for the GEO satellite market, intercontinental satellite phone calls mostly go through fiber optic submarine cables now. The remainder markets are niches in the middle of nowhere. Where there isn't a lot of money to invest in these shiny toys. Well except if you are the military anyway. Or in an oil platform.

    In the other hand satellites for terrain imaging continue to be pretty successful. Space is the ultimate high ground after all.

  • by cheesybagel (670288) on Monday April 12, 2010 @07:59PM (#31824960)
    There is like one sentence about SpaceX near the end of the article. AFAIK things are rolling. Their website is pretty up to date. The article is mostly sour grapes.
  • mod DOWN! (Score:5, Informative)

    by Anubis350 (772791) on Monday April 12, 2010 @09:17PM (#31825692)
    Honestly, insightful?

    From a quick google search on NASA inventions:

    Ten NASA inventions you use every day [howstuffworks.com]

    Top 15 NASA inventions [telegraph.co.uk]

    Polimide Foam [nasa.gov]

    NASA Inventions benefiting our daily lives [about.com]

    Highlights from those links include kidney dialysis, CAT scans, various types of insulation, efficient water purification tech, cordless tools, modern designs of microchips, satellite tech (you know, it deleives a great deal of your communications....), scratch resistant lenses... And there's a *lot* more, a great deal of modern tech comes from NASA is one way or another.

    Even if you have a problem with exploration and a search for knowledge and understanding of the universe, you have to admit the space program and its SCIENCE have yielded *massive* results on earth in technology. I'm also pretty sure there were luddites like you when the first ships were being built, the first submarines, the first plans, hell, the first time someone said "I'm going to wander 50 miles that way and see what's there".
  • Re:It's the size (Score:3, Informative)

    by CRCulver (715279) <crculver@christopherculver.com> on Monday April 12, 2010 @09:18PM (#31825698) Homepage
    Except the Tea Party hasn't been saying anything like that at all. Their platform, inasmuch as they have any coherent platform, is not about reducing social programs at the federal level because the states can do it better. Rather, their rhetoric is about ending social programs entirely. The common claim "People don't work hard if they get this or that for free, and stop spending my tax money on other people" says nothing about devolving the welfare state to the individual states.
  • by ppanon (16583) on Monday April 12, 2010 @09:26PM (#31825782) Homepage Journal

    The JSF is being built at the same cost (or frikken more) as the F22 with lower end tech to be sold to allies (where the F22 is under high-end tech restrictions).

    Guess which one is going to be chosen by the USAF to buy?

    Neither? [newsweek.com]

  • Re:riiiight (Score:4, Informative)

    by Dr. Spork (142693) on Tuesday April 13, 2010 @02:03AM (#31827914)
    I don't think you understood this right. Obama is opening the position of taxi service to the ISS to the open market, but by this he doesn't mean the private sector. He means that the national government would pay for this service with tax money. They're declaring unambiguously that there will be a demand, and inviting private companies to satisfy it at market rates. But those two companies have much more lucrative things to work on, like SDI - where they get billions for making powerpoint presentations.
  • by Anonymous Coward on Tuesday April 13, 2010 @03:08AM (#31828278)

    First off, I work in the industry, so anonymous.

    Why do so many people get modded informative for completely misunderstanding how or why cost-plus is used?

    First of all you pay an equivalent of cost plus for things in your day to day life all the time. Hire a plumber to fix your water heater, you're paying him hourly for his work. That's the equivalent of cost plus. Car breaks down? You're gonna pay for parts+labor, that's the equivalent of cost-plus. Here's one for all you web designers on slashdot. You get hired as a contractor to build a website, do you quote them a price and then complete the work for the original price even if it takes twice as long? Of course not. Why? Because the job almost never ends up being what the original requirements were, or it simply takes much more work than originally intended. Instead you hire on as a contractor and get paid for your time. The only real difference between these examples and a government cost-plus contract is that the government can decide what award fee to give you, (that's the plus in cost-plus), so if they don't like the job you did, you're getting no profit.

    Cost-plus exists for one of a kind (or a few of a kind) jobs where it is impossible to know in advance exactly how much effort it will take. Like figuring out why the service-engine light in your car keeps coming on. Even when knowing the exact system in your car it could be anything from a loose wire to a bad sensor to a leak. In many cases the mechanic may be able to tell you exactly what it will take, but not all.

    To visit the parents UPS example. UPS ships millions and millions of packages a year and operates thousands and thousands of trucks. What that means is that they can statistically estimate the cost to the company for each package, including the costs associated with losses, such as a truck breaking down or a package being lost. That's great, it means they have consistent pricing. But they can only do that because they continually do the exact same thing over and over again.

    Say you're building a lunar rover. Obviously it's going to be a custom job, even if you've built a lunar rover before NASA isn't going to want the exact same thing. So you get their initial requirements and make a bid and you win. Then what? Well the company that makes the fault tolerant CPU you need has had declining sales, so the costs have gone up for that part. NASA added a requirement that resulted in you exceeding the power capabilities of your solar panels, so you have to scrap an entire system and restart design. Etc.

    Now say you're selling F-16's. You've built hundreds and hundreds of F-16's, so guess what, when a country that you are allowed to export to wants to buy a few F-16's you sell them with a fixed price contract because you know almost exactly how much it will cost you to make more.

    One other point. The parent says "Cost plus allows these companies to bid far lower than they know it will cost to produce these things and then jack the price up later". Sorry, no. The government reviews bids from multiple companies for a contract very thoroughly and understands what the bid covers, for 100,000+ man hour tasks they can be very accurate. The additional costs don't usually come from underbidding, they come from scope creep. This usually happens in two ways A) The requirements were incorrect to begin with and the scope of the bid was incorrect as a result. B) The government comes in with additional features they want. In both of these cases the problem is with the government playing funding games or not understanding what they want.

    As an engineer I've seen far too many tasks go over-budget and even get canceled because of poor government requirements, politics, and funding games. Never once have I seen a large government contractor try to grow the costs of an effort (I have seen a company drop the hourly rate of their engineers they charge to the government to keep the customer from going over their budget though). Screwing over your customer is not a good way to stay in business, especially when the government representative shafted by you on one contract ends up deciding who wins the bid for the next.

  • Re:It's the size (Score:3, Informative)

    by Rockoon (1252108) on Tuesday April 13, 2010 @07:52AM (#31829780)
    Stop listening to MSNBC

    The Tea Party Movement is nearly 100% about a return to the States that which the Federal government has hijacked unconstitutionally over the past 80 years.

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