NASA To Pay More For Less Cargo Delivery To the Space Station (arstechnica.com) 172
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.
comparison (Score:2)
How much would it have cost if NASA did it themselves ? I am also wondering if there isn't enough competition yet for this kind of thing.
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Time to put a nail in the "the private sector can do it cheaper" argument.
It only happens when there is competition, and in order for there to be competition there needs to be at least 6 arms-lengh-unrelated choices. In any competative market where the choices have been reduced below six, prices go up, substantially.
Gas stations. At one point in time every city had several brands of gas station. Now all gas comes from one of two sources, and prices just go up. Internet service, the only place with competiti
Re:comparison (Score:5, Informative)
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And for those who think all the extra money just goes towards a mansion for the CEO... actually, that's true. A mansion on Mars, for his retirement. Not that I mind, though.
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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
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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.
Or they're relying on public subsidies to cover their costs and profit margin.
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Re: comparison (Score:1)
Re: comparison (Score:4, Insightful)
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.
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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.
If you are going to call people incompetent, you should check to make sure the word you are using means what you think it means.
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Sorry, English is only my third language.
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People don't feel the consequences of their actions in corporations either, at least at levels where they can actually make decisions.
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Nice academic argument, except you left out some rather pertinent facts. The government does not have any manufacturing facilities. They have to buy on the open market just like everyone else. Those suppliers make a profit on government buys or they wouldn't sell to the government.
Just to make things interesting, if the government is spending money on goods and services, Congress-critters will want to make sure their states and districts get a cut of the pie. So the government cannot simply contract out to
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Talk for your own failed state.
Opposite argument (Score:2)
The opposite argument could also be done :
A private sector company can cut their cost by integrating as much as possible themselves the production pipe-line, and only relying upstream on common of-the-shelf parts.
(SpaceX isn't smelting their own aluminum ore, nor making their own silicon for embed electronics, but pretty much handle a lot above that).
This gives some significant cost reduction due to being lean, that they can pass of in the form of slightly reduced price compared to the competition, in the h
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Governments on the other hand have much bigger bargaining power. Government contracts are lucrative, even if you happen to have a government that doesn't just throw out money but is actually working sensibly (yes, astonishing as it may be for some, such a thing exists). Selling to the government means that you WILL get paid (well, provided you're not selling to Somalia). Since as a company you're usually in a position where you owe money to the government, be it for taxes, fees or even fines, even if they f
Re:Opposite argument (Score:5, Insightful)
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.
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You're working for the wrong governments...
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It has little to do with altruism. But a government that fails to provide what its constituents want will not govern for long.
Many places in Europe have shown that it can work. Provided you keep the rest of the world out, that is...
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Austria, Sweden, France, Norway... Yes, even Germany before they had that reunion. It's probably not an efficient system, but a good one. And frankly, I don't care whether a system is efficient as long as it does what it should and is affordable.
I mean, seriously, why should I care whether 100 millions a year are lost in inefficient practices or blown on some idiots' golden parachutes? I have to pay either, and with the former, I at least have a chance of being affected positively in some way.
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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.
It's the other way around. It's the public provider that doesn't care about an aspect, and that aspect is cost-efficiency.
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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.
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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 w
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Unfortunately competition is on the way out and monopolies are what we're heading for. And if I only have the choice between a corporate monopoly and a state monopoly, I choose the latter.
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Unfortunately competition is on the way out and monopolies are what we're heading for. And if I only have the choice between a corporate monopoly and a state monopoly, I choose the latter.
I demolished your argument so now you set up a strawman to knock down. Man up and get some intellectual honesty.
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Re:comparison (Score:5, Insightful)
Say that to all the "too big to fail" companies like banks and car makers.
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I would have agreed with you before "too big to fail" became reality.
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C'mon, what country are you in where a superfluous governmental body ceases to exist? It just gets reorganized and the people in it get redistributed. And they know it.
If you want to make cynical comments, at least make some that work.
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America. The rural electrification program still exists. It sucks almost a billion/year to do nothing but funnel money to rent seekers and pay non-working staff.
That's just the tip of the iceberg.
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a) The private sector has competition
b) The private sector actually has to get the job done at some point in time.
If you've ever worked in government you'll know their only goals are to look pretty and justify their continued existence in the yearly report.
Re:comparison (Score:5, Insightful)
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.)
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Re:comparison (Score:4, Insightful)
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I technically work for the government (publicly funded science). The competition is cutthroat and there's no money. Necessity is the mother of invention.
I also consult for industry. They have lots of meetings, procedures, management, administration and stupid amounts of money. Stuff gets done slower and much more expensively.
There certainly are sectors of government that are as you describe, but there are lots that are the opposite. And, as the OP was pointing out, when there's insufficient competition
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Having worked for over a decade in government, you're wrong.
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only nasa could design a whole space station costing $200b, but had no design for a resupply ship, and relied on a over priced shuttle, that they thought would never be shut down.
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> relied on a over priced shuttle, that they thought would never be shut down.
This is wrong on a bunch of different levels.
1. NASA warned Congress repeatedly that scope creep and R&D spending cuts were dramatically increasing the initial shuttle cost and continuing operational costs.
2. NASA warned Congress about the need for a shuttle replacement in hearings and in public budget requests for more than a decade before the Shuttle EOL.
3. Despite 2, Shuttle replacement programs have been repeatedly kill
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It only happens when there is competition, and in order for there to be competition there needs to be at least 6 arms-lengh-unrelated choices. In any competative market where the choices have been reduced below six, prices go up, substantially.
I'm curious - where did you find that number?
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Historically though they were far more involved in the design, development, construction and operations though. There was also the issue with cost plus contracts which effectively encouraged massive cost overruns. The "new" setup is to award fixed price contracts with fixed requirements which are almost entirely ran by the contractor with only a (comparatively) little assistance/monitoring from NASA.
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How much would it have cost if NASA did it themselves ? I am also wondering if there isn't enough competition yet for this kind of thing.
It's an interesting question--what does it really mean for NASA to "do it themselves"? NASA has a very long history of contracting out the development and construction of launch vehicles. Remember, for the Apollo program the Command and Service Module was built by North American Aviation (as was the Saturn V second stage), the Lunar Module was built by Grumman, the Saturn V first stage (S-1C) was built by Boeing, the third stage was built by Douglas, the F-1 and J-2 main engines were designed and built by
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Yes, this is still significantly cheaper than doing it themselves.
(Remember all that manned space shuttle stuff? That was NASA's way.)
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The shuttle was the US Air Force way. As originally conceived it was a lot smaller and more practical, but the USAF had certain special requirements.
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Yeah, SpaceX has invented nothing new, vertically landing rockets have been described as early as 1950 by Belgian cartoonist Hergé [wikipedia.org]. Even I could have developed a rocket based on that work, I just thought it was too obvious to waste my time on.
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Russia transport launches were cheaper than USA transport launches too... but USA used most of their launches also as personal transport or other activities, so it is not that easy to compare... but yes, in the end, NASA are more expensives but paying russia for their transport is a big tabu in many USA areas
Re: comparison (Score:4, Informative)
NASA developed vertical landing technology for the Apollo Lunar Module [wikipedia.org]. Yes, that was on the moon, but the technology was tested on Earth prior to sending it to the moon. [youtube.com]
If you insist on are more fully rocket-like technology, then take a look at the McDonnell Douglas DC-X [wikipedia.org] (and NASA's subsequent DC-XA). Blue Origin (who beat SpaceX to a vertical landing by a private company) hired a number of the DC-X project engineers and the New Shepard vehicle was at least partly based on the DC-X.
There's an entire history of the development of vertical takeoff and landing [wikipedia.org] technology being developed, so yeah... SpaceX didn't invent anything new by making a rocket (actually a booster) that lands vertically. They refined and enhanced what had already come before. That's how technological advancement works.
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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.
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When SpaceX started, the spaceflight community were largely dismissive of the balding software startup guy.
Now that they've accomplished more in re-usable rockets than all other companies combined, the story now is that anyone could have done it
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IIRC Old musky's degree is Aerospace engineering.
He was working outside his field when he did the payment processing thing.
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IIRC Old musky's degree is Aerospace engineering
Nope.
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NASA developed vertical landing technology for the Apollo Lunar Module [wikipedia.org]. ...
You're right, SpaceX did not invent rocket landing, but they were the first company landing an orbital rocket on Earth, which is quite a fit.
Why is it quite a fit? Because before nobody thought it was feasible or economically viable and even some experimented nobody have done it.
- Moon landing - yes, however Moon's gravity, lack of atmosphere and the Moon Lander size and weight make this undoubtful achievement not quite comparable with Earth landing
- Space Shuttle landing - yes, however not supersonic re
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Yes, they have created the most advanced vertical landing rocket that we've seen so far. That is a big accomplishment.
The comment I was responded to was trying to imply that they'd done something nobody else had ever done before, however, thus the examples I gave of how it had been done even if the implementations weren't as refined.
And, by the way, moving the goalposts is not a good thing to do in a discussion. Go re-read the comment I originally replied to. Demanding that my examples meet an expectatio
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Yes, it was "done before" but never in the manner or scale the SpaceX is doing. Vertical landing of a no-payload, single stage rocket or only the 2nd/3rd stage is more than slightly different from full recovery of your FIRST stage along with delivering a commercially viable payload to orbit.
Your comparison to Apollo fails in the same way, especially considering the fuel requirements for a moon landing/launch are comically smaller than on earth.
Even so, who cares? SpaceX is *currently* the *only* one doing
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You don't really understand what "refined and enhanced" means, do you?
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Way to miss the point.
The technology for vertically landing a rocket was in its infancy in the 60s, but it was there. It was developed and refined further as time went on (as shown by the examples given). What the current companies are doing is a further development and refinement.
SpaceX didn't start from scratch and create something nobody else had ever done (which is what the comment I replied to suggested). They created an improved version that works better than the ones that came before.
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Unexpected Costs (Score:5, Insightful)
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.
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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.
Not really. SpaceX were cheap only if you ignore the truckload of money that NASA paid them to develop their rockets and the fact that NASA bought 12 flights to carry supplies to the ISS, but the first two were basically test launches with very light payloads (CRS-1 and CRS-2).
Re:Unexpected Costs (Score:5, Informative)
Yeah, or not. NASA invested $454M up-front in SpaceX, less than what they spent on the space shuttle in a year, and as a result got dramatically cheaper per-flight costs - saving billions [nasa.gov]:
The most significant improvement, beyond even the improvements of 2-3X times reviewed to here, was in the
development of the Falcon 9 launch system, with an estimated improvement at least 4X to perhaps 10X times over
traditional cost-plus contracting estimates, about $400 million vs. $4 billion
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Overall, it's still pretty cheap compared to the alternatives
Re:Unexpected Costs (Score:5, Interesting)
Re:Unexpected Costs (Score:5, Informative)
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.
Not really. SpaceX were cheap only if you ignore the truckload of money that NASA paid them to develop their rockets and the fact that NASA bought 12 flights to carry supplies to the ISS, but the first two were basically test launches with very light payloads (CRS-1 and CRS-2).
SpaceX was only expensive if you can't do simple arithmetic.
For the first round of 20 flights, SpaceX is 20 * ($262.6M - $152.1M) = $2.2B cheaper than ULA. Subtracting out the $454M up-front investment, that still leaves a net savings of $1.75B. Even if you consider the time-value of the money by adding, say, 6% compound interest on the initial outlay all the way through 2020 (which is ridiculous), NASA will still have saved $1.18B vs ULA. And that's assuming ULA didn't get any development funding, which is false since both Boeing and Lockheed Martin built their spacegoing capability largely on NASA dollars, mostly under the old cost plus model (vastly more expensive).
NASA's own analysis [nasa.gov] looks even better for SpaceX, estimating the cost savings of launch system development alone (not considering operational savings) at over $3.5B. Of course, they were comparing to their traditional model.
And, frankly, continuing to undercut the competition by such a large margin would just be bad business. If your price is 42% lower than your nearest competitor's -- for the same quality of service, etc. -- you're leaving money on the table. Moreover, since NASA refuses to contract only a single supplier, it's not necessary to beat everyone, only to beat enough of them to stay in the group of contract recipients. This higher price will provide more capital to fund Musk's real goal: building a Mars transport system. Or to generate larger returns for its investors, which is totally fair since they put up as much as NASA did, and while we don't know how much they've taken out (if any), it can't be very much so far. Certainly far less than NASA's "profit" as compared to other launch options. But I think most of it will go into funding the Mars plans.
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> You are assuming that Musk isn't just buying a dominant position in the market.
This assumption is made confidently based on estimates by multiple competent independent analysts. SpaceX's materials buy to fly ratio was two orders of magnitude better than their competition /before/ they started recycling rockets. Recycling first stages drives that cost down even further.
They would be profitable today if they stopped sinking money into R&D, but they won't. I, personally, agree with this decision.
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Two orders of magnitude? 1/100th the cost? Citation needed?
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Buy-to-fly ratio:
https://www.wired.com/2012/10/... [wired.com]
"And your material loss is maybe 10 percent, just for trimming the edges. Instead of a ratio of purchased to flown material-what they call the 'buy to fly' ratio-of maybe 10 to 20, you have a ratio of 1.1, 1.2 tops."
A practical example is in this video.
https://archive.org/details/NA... [archive.org]
This is the backshell for the Orion spacecraft. It's machined from a /single piece/ of metal 17 feet square. >95% of it gets machined away.
A reasonably skeptical person wo
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Two orders of magnitude was your claim. Nothing in your link supporting that.
Also cost of raw materials is small % of total. Metal machined away is recycled, further reducing costs.
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I am not sure what planet you are from. On earth any large contract comes with significant oversight costs whether you are public or private sector. If the oversight costs are low you get sold the Brooklyn bridge or a death trap. Apparently in the real world an organization can be good or bad whether it is in the private or the public sector but your indoctrination fails to allow for that fact.
NASA did something right! (Score:5, Interesting)
At least they rejected the bids from Lockheed Martin and Boeing. Dear lord, what a zillion-dollar clusterf^ck THAT would have been!
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Too. Expensive.
apples and oranges again (Score:4, Insightful)
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?
Re:apples and oranges again (Score:4, Insightful)
They are spinning up the good news that SpaceX will continue to do it cheaper than anyone else (ever), as something bad.
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Impossible! Who would do such a thing!
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Ukrainian not Russian (Score:1)
And for an encore, they still undercut the price while flying on American-made rocket engines as opposed to Antares' Russian design.
The non-American partner of Orbital in the Antares [yuzhnoye.com] rocket program is Yuzhnoye [yuzhnoye.com], a Ukrainian company. Big difference. It's partly because of a de facto Russian invasion of Ukraine that Russia was first placed under US-led economic sanctions. Perhaps you meant that Antares evolved from Soviet-era rocket technology? Not all "Soviets" were Russians, since the Soviet Union was more like a confederation of independent states, even if they were ruled by force and united by common fear of the West (much like a matry [wikipedia.org]
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It's a reasonable comparison. NASA needs to get cargo to the ISS. SpaceX and Orbital ATK both have systems to do that.
The SpaceX system can also do things like bring stuff back, and that's kind of nice on occasion, but not really what NASA needs most of the time. SpaceX will also be able to transport people (they can't right now), which I'm sure is of great interest to NASA.
SpaceX can do the present job cheaper than the competition, so they win the short-term analysis. They're also ploughing their profi
People are expensive (Score:2)
SpaceX now has over 7000 employees (https://twitter.com/jeff_foust/status/931087032830582784) who require salaries, medical insurance, pensions and infrastructure. This expense is not offset by the savings from reusing rockets, particularly in the age of CNC manufacturing.
Much is made of the fact that fueling a rocket with RP-1 and LOX is a negligible expense ($300,000 per Falcon 9 laun
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You need to divide the number of people by the number of yearly launches to get a more useful metric.
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you forget constructing rockets takes lots of warehouses and space and people too, storage isnt cheap for giant rockets.
Coincidence? (Score:2)
https://news.slashdot.org/stor... [slashdot.org]
Coincidence? I think not.
The price increase will never happen (Score:2)
The price increase SpaceX announced was what it hopes to charge in the 2020s. But by then they will be competing with many other providers. NASA will actually pay less.
Have they tried using Amazon "Prime"? (Score:2)
Not mentioned (Score:2)
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NASA is making a strategic investment, exactly in line with their mandate.
In the first round SpaceX had cool technology and lower costs, but was untested. This round SpaceX is a much better bet, and Dream Chaser is the one with cool new technology that's untested.
Presumably NASA is keeping Orbital ATK around for a bit longer to maintain a choice of two reliable suppliers.
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That puts them one up on you!