Author Topic: Billion Dollar Subsidy  (Read 5536 times)

Offline Rebel44

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Re: Billion Dollar Subsidy
« Reply #40 on: 07/14/2017 04:47 PM »
Whether or not we call it a subsidy is not important. That's just a term, and I think we all understand how the ELC works. The actual meat here is whether or not SpaceX is on a level playing field with ULA when it comes to government launches.
They are. Competitively awarded NSS launches are single, all-in contracts. ULA is not allowed to use any of the ELC funds to support a competitively awarded NSS launch. This rule-of-the-game was implemented to prevent the losing competitor from succesfully suing the USG for not providing a level playing field. In fact, the implementation of this rule-of-the-game is one of several reasons why the lawsuit between USAF and SpaceX (over the ULA block-buy) was eventually settled outside the courtroom in early 2015.
ULA subsequently used a minor consequence of this rule-of-the-game as an excuse to refrain from bidding on the first competitively awarded NSS launch. It was their pityfull attempt to have the new rule-of-the-game overthrown. However, it backfired on ULA big time when both USAF and US Congress heavily criticized ULA for not bidding on the contract.

Thank you Woods, that is a nice in-depth explanation. I did not know that ELC money cant be used for competitive bids. Furthermore, because it has to be repaid for each launch that is not supported by ELC, it actually has a 0-sum effect on the competition between ULA and SpaceX.
Going to some extreme, if ULA would ONLY launch competitive or commercial launches in one year, the entire sum of ELC would have to be given back? Or the other extreme, if ULA would launch no competitive or commercial payload, but at least one NSS payload, could it keep the entire sum of ELC? If that is the case ULAs best strategy would be to do exactly that: no competitive bids, no commercial bids and only launch sole source contracts for the DOD. I cant imagine that this would be true, there must be some mistake in my logic. Yet, that seems to be exactly what ULA tried to do and what we see in development, ULA gets cut off from the commercial market and it tried (as you mentioned) to wiggle out of competitive bids.

ULA returns only a small fraction of ELC for each ULA commercial launch - IIRC its around 4-5% of ELC payment for that year.

Online Brovane

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Re: Billion Dollar Subsidy
« Reply #41 on: 07/14/2017 05:12 PM »
BUT... it ought to be included in the launch bid and contract.

It can't be.  The Air Force buys multiple rides and also buys the ability to delay or swap payloads separately.  It can't be bought one launch at a time.  Air Force launch services and spacecraft are funded by separate sources, unlike NASA's.

I see this debate has erupted again.

The best analogy I have for ELC payments is the annual retainer fee for Concierge Medicine.  So in Concierge Medicine, you pay an annual fee to get extended access to a doctor, same day appointments, doctors personal cell phone number etc.  However, you still pay for doctors visits, lab work etc.  The annual retainer fee isn't a subsidy.

With ELC Payments the USAF get's concierge level service from ULA. 
"Look at that! If anybody ever said, "you'll be sitting in a spacecraft naked with a 134-pound backpack on your knees charging it", I'd have said "Aw, get serious". - John Young - Apollo-16

Offline Lar

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Re: Billion Dollar Subsidy
« Reply #42 on: 07/14/2017 05:52 PM »
(mod)
To the maximum extent possible permitted by law this will not be a ULA bashing thread. Nor will it be a SpaceX praising thread. Or vice versa in both cases.

kinda thinking this thread has run its course though? The ELC has been discussed ad nauseum in the past. Anything new to add, report to mod to appeal the lock.

Locked.
« Last Edit: 07/14/2017 05:53 PM by Lar »
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