What We FoundAfter reassessing NASA’s planned strategy to shift SLS production, systems integration, and launch services to DST under a services rather than the current sole-source contract structure, the Exploration Systems Development Mission Directorate added 3 years to the timeline for transitioning these responsibilities and consolidating existing SLS-related contracts under DST. During this 3-year evaluation and readiness period, NASA will continue to manage the individual SLS contracts until DST is ready to fully assume that role. We believe this Pre-EPOC transition contract is a positive step as it will include an insight/oversight team to monitor and evaluate DST’s ability to manage the full scope of SLS production and integration. For example, the transition period provides Boeing more time to improve its quality control efforts for core and upper stage production at NASA’s Michoud Assembly Facility, a concern raised by DCMA since 2019. Our analysis shows a single SLS Block 1B will cost at least $2.5 billion to produce—not including Systems Engineering and Integration costs—and NASA’s aspirational goal to achieve a cost savings of 50 percent is highly unrealistic. Specifically, our review determined that cost saving initiatives in several SLS production contracts such as reducing workforce within Boeing’s Stages contract and gaining manufacturing efficiencies with Aerojet Rocketdyne’s RS-25 Restart and Production Contract were not significant and, as a result, a single SLS will cost more than $2 billion through the first 10 SLS rockets produced under EPOC.That said, moving SLS production from separate cost-reimbursable contracts to a combined commercial services approach may potentially reduce SLS production costs in the long term if a fixed-price contract is used to codify a reduced price. However, the Agency has yet to determine the extent to which fixed-price contracts will be used with DST. Considering the $4.3 billion cost increase the Agency incurred with cost-reimbursable contracts used to build the space flight systems for the first Artemis mission, continuing to use this type of contract under EPOC calls into question the suitability, affordability, and effectiveness of NASA’s contracting approach to SLS production. Moreover, a contractor’s ability to manage costs has typically accounted for only 25 percent of its evaluation under the SLS’s current cost-reimbursable contracts, so the SLS Program’s significant past cost overruns have had little impact on the award fees NASA provided to Boeing and Northop Grumman.Moreover, NASA’s ability to reduce SLS costs and negotiate a fixed-price contract with DST will be impeded by a lack of competition for heavy-lift launch services, a characteristic that historically has helped drive down costs. Further, NASA has permitted current SLS contractors to incorporate limited rights data into the design of the core stage and Exploration Upper Stage, effectively blocking other contractors from competing to build the SLS system. That said, inclusion of several Federal Acquisition Regulation provisions in EPOC such as incentive fees may assist NASA in contract negotiations, mitigate the impact to schedule and cost overruns, and ensure remaining data rights are retained to the fullest extent possible by the government. Finally, while DST intends to reduce costs by increasing economies of scale by building more SLSs, its efforts to find customers outside of NASA have been unsuccessful to date. Although the SLS is the only launch vehicle currently available that meets Artemis mission needs, in the next 3 to 5 years other human-rated commercial alternatives that are lighter, cheaper, and reusable may become available. Therefore, NASA may want to consider whether other commercial options should be a part of its mid- to long-term plans to support its ambitious space exploration goals.
Under EPOC, NASA’s goal is to achieve a 50 percent cost savings in producing flight-ready SLS vehicles, which by our calculation would reduce the contract cost of a single SLS Block 1B rocket from a current production cost of at least $2.5 billion per launch vehicle to $1.25 billion. According to Agency officials, this goal is aspirational and not based on actual analysis, and in our estimation is highly unrealistic. Specifically, our review of current SLS contracts, affordability initiatives, and cost estimates for the DST Boeing-Northrop Grumman joint venture leads us to conclude that SLS production costs will remain at over $2 billion per rocket for at least the first 10 SLS launch vehicles under EPOC.
Boeing’s Stages Contract. A major cost of producing the SLS’s core stage is the large workforce required to build the system. Although Boeing’s efforts to increase affordability include workforce reductions, bulk material purchases, and decreases of certain production lines from three shifts to two, we have not identified significant cost reductions that would result from these actions. For example, Boeing reported a 13 percent reduction in workforce for building a core stage between Core Stage 1 and Core Stage 2. Given the transition from the development of the time-intensive Core Stage 1 to additional core stages, we would have expected a greater workforce reduction. In addition, our analysis of the company’s budget reporting and financial management documents indicate that Boeing will continue to employ a large workforce and therefore have minimal cost reductions.Aerojet’s RS-25 Restart and Production Contract. Despite initiatives aimed at cutting costs by gaining manufacturing efficiencies utilizing 3D printing and using less costly materials for RS-25 engines beyond Artemis VII, we instead found cost increases for future engines. For example, while NASA continues to claim a 30 percent reduction in RS-25 engine costs compared to those produced during the Space Shuttle era, we estimated the per-engine cost for SLS will exceed the $104.5 million cost per RS-25 Shuttle engine.26 Moreover, our analysis identified a 13 percent increase in the RS-25 Restart and Production contract costs to date. NASA’s cost savings calculation excluded overhead and other associated costs with recertification, industry base restart, and production efforts for 24 new engines.
Another factor that will make it difficult for NASA to negotiate reduced launch prices from DST isthat the Agency has relinquished significant data rights and property—such as tooling and welding machines—to the current SLS contractors making it hard for other companies to compete in the future. Specifically, to leverage potential cost savings and existing technology possessed by Boeing and its subcontractors, since 2012 NASA has allowed limited rights data to be incorporated into the designof core stages and the Exploration Upper Stage.33 Allowing limited rights data effectively blocks other potential contractors from competing to build the system. In effect, a potential new contractor would not be able to use data developed by Boeing and its subcontractors under the SLS developmentperiod and instead would need to establish agreements with suppliers that possess the data rights—a potentially time consuming and costly endeavor—or risk substantial cost and schedule delays by redesigning the stages launch system. Given the impracticality of a new contractor establishing such agreements with Boeing and its suppliers, the cost to duplicate the core stage and ExplorationUpper Stage without obtaining data rights would exceed $4.5 billion and add 10 years to the schedule according to the JOFOCs used for the Stages Production and Evolution Contract and ExplorationUpper Stage. Like Boeing, Aerojet’s RS-25 and RL10 engines contain license rights, limited access,and permissions that prevent the Agency from sharing data with other contractors and, as a result,the cost of another company producing and certifying similar engines would exceed $3 billion.
EPOC is not the first time NASA has transitioned operations of a large human exploration program and consolidated those efforts under a single prime contractor. With the Space Shuttle Program, the Agency employed a similar strategy which resulted in an increase of operational costs rather than the savings that were envisioned.
However, despite Boeing's intent to increase production and secure additional SLS customers to achieve its cost reduction targets, to date these efforts have been unsuccessful. For example, the Department of Defense, specifically the Air Force and Space Force, have declined to use the SLS due to lower-cost alternatives with existing capabilities that meet their needs such as SpaceX’s Falcon Heavy and ULA’s Atlas V, as well as ULA’s forthcoming Vulcan Centaur rocket. Moreover, even though Congress initially directed NASA to use the SLS for the Science Mission Directorate’s Europa Clipper mission, NASA subsequently received congressional approval to use another launch vehicle and the Agency contracted with Space X for a Falcon Heavy rocket at a cost of $178 million.In the near term, the SLS remains the only launch vehicle with the capability to lift the 27-metric ton Orion capsule to lunar orbit. However, in the next 3 to 5 years other human-rated commercial alternatives may become available. These commercial ventures will likely capitalize on multiple technological innovations, making them lighter, cheaper, and reusable. Further driving down costs is the competition between aerospace companies such as SpaceX, ULA, and Blue Origin, with both SpaceX and Blue Origin currently developing reusable medium- and heavy-lift launch vehicles that will compete with NASA’s SLS single-use rocket.Although Congress directed NASA in 2010 to build a heavy-lift rocket and crew capsule using existing contracts from the canceled Constellation effort to meet its space exploration goals, the Agency may soon have more affordable commercial options to carry humans to the Moon and beyond. In our judgment, the Agency should continue to monitor the commercial development of heavy-lift space flight systems and begin discussions of whether it makes financial and strategic sense to consider these options as part of the Agency’s longer-term plans to support its ambitious space exploration goals.
ConclusionTo its credit, NASA has acknowledged the high costs of its Artemis goals—the SLS in particular—and since at least 2016 has been exploring ways to make the missions more affordable. The EPOC initiative is designed to transfer SLS production, integration, and launch to a Boeing-Northrop-Grumman joint venture known as DST using a commercial services construct. In our judgment, despite NASA's noteworthy adjustments to the EPOC transition plan and its affordability initiatives, the price of the SLS Block 1B rockets will not be significantly reduced through such a sole-source contract with DST.NASA’s aspirational goal is to achieve a 50 percent cost savings over current SLS costs using DST, which by our calculation would reduce the contract cost of a single SLS rocket from the current $2.5 billion to $1.25 billion. Our analysis shows this goal realistically cannot be achieved and the production cost alone will remain over $2 billion. We reach this conclusion after examining what we believe are a variety of unrealistic assumptions on NASA’s part. First, the Agency expects to achieve cost savings by reduced SLS production costs under a contract with DST. However, ongoing affordability efforts by SLS contractors to reduce the workforce and improve manufacturing processes have yet to achieve cost savings on the high-cost stages and RS-25 engine contracts. Second, DST expects to drive down costs by increasing the SLS production rate by entering into contracts with non-NASA entities such as the Department of Defense and commercial entities. However, thus far other potential users have declined to use the SLS due to lower-cost alternatives. Finally, NASA’s ability to negotiate less costly services with DST will be hindered by the lack of competition given EPOC is not subject to competition but rather sole sourced to the existing SLS contractors.Despite these challenges, NASA can take steps to improve EPOC’s cost savings potential. In the near term, NASA can maximize potential savings by stabilizing technologies and requirements to maximize the use of fixed-price contracts. The continued use of SLS cost-reimbursable contracts by EPOC will likely stymie any significant cost saving efforts. In addition, several FAR provisions may assist NASA in contract negotiations and mitigate the impact of schedule and cost overruns. Finally, in the long term, commercial competition in launch services will be more practicable for the Agency to better leverage less costly commercial alternatives while achieving its mission goals. Several U.S. space flight companies are already implementing multiple technological innovations, making heavy-lift systems lighter, cheaper, and reusable. In the end, failure to significantly reduce the high costs of the SLS launch vehicle will significantly hinder the overall sustainability of the Artemis campaign and NASA’s deep space human exploration efforts.
Completion and delivery of Core Stage-2 was delayed from early in 2023 due to supply chain issues and core stage prime contractor Boeing is also dealing with a new weld tool issue at MAF that has delayed completion of the liquid oxygen (LOX) tank for the subsequent unit, Core Stage-3. Despite the extra obstacles, the SLS program still sets the completion of Core Stage-2 for late this year and wants to have Core Stage-3 complete in late 2024 or early 2025.
That engine was the first to be “soft mated” to the stage in the number two position on Sept. 11, followed by engine 2047 in the number one position on Sept.15, engine 2062 in the number three position on Sept. 19, and finally engine 2063 in the number four position the next day on Sept. 20. ”It’s been some time since we installed the engines for Artemis I, there are some new team members that are working the install for Artemis II that were not there for Artemis I,” Jonathan Looser, NASA SLS Core Stage Design Team Lead, said in a recent interview with NSF. (emphasis added)
The engines were shipped to MAF from Aerojet Rocketdyne’s engine facility at nearby Stennis Space Center in Mississippi over a year ago in September 2022 and were originally prepped for installation early in 2023, but delays in putting together the core stage pushed engine installation until September. One of the major hold-ups this year was due to a liquid oxygen feedline segment that had to be reworked at a supplier.Two large-diameter LOX feedlines, also called downcomers, run from the LOX tank at the top of the stage down to the engine section at the bottom. The downcomers are assembled from several segments and completion of the final downcomer was delayed until recently. “That’s a component that has experienced some delays at one of the sub-tier suppliers and we’ve known about this for several months and that component has been reworked,” Looser said.“The issue that we experienced at the sub-tier supplier was both a non-conformance and also just a supply chain prioritization, where there are some other government programs that out-prioritized our hardware,” he added. (emphasis added)
The forward dome and two barrels were welded in the VAC in the summer and fall of 2022, but an unspecified issue welding an aft LOX tank dome has stalled the overall completion of the tank. The propellant tank domes are welded together from a gore section, end cap, and ring in a Circumferential Dome Welding Tool (CDWT).“We’ve been going through some weld issues on the LOX aft dome for the last several months,” Looser acknowledged. “I don’t want to get into too many of the technical details of that as Boeing is still working through and completing the root cause and corrective action, but I will say that we are nearing the end of that and on a path to resuming welding on the LOX aft dome.”“The forward two-thirds of the LOX tank is in the VAC, waiting on the LOX aft dome, and that team is working as we speak to get back into welding to be able to complete that aft dome and complete the LOX tank.” The issues have also kept the VAC from being used for welding other Core Stage and Exploration Upper Stage structures. (emphasis added)
From gleaming the quotes posted by @VSECOTPEOne have the impression that further examples of the SLS beyond Artemis II will be more expensive and prone to delays.
NASA’s Transition of the Space Launch System to a Commercial Services ContractNASA Inspector General Report 24-001 (10/13/23)
This is the type of document on SLS I have been wanting for YEARS so simple and easy to understand. Of course it comes out when I’m super busy but I will be using this for many years to come I’m sure.
The one good thing to come out of this is NASA concurring with the recommendation to evaluate commercial alternatives
Recommendation 5: Include contract flexibility on future SLS acquisitions that will allow NASA to pivot to other commercial alternatives.Management's Response: NASA concurs. The procurement strategy for EPOC has not been established, pending performance under the pre-EPOC evaluation and readiness effort. However, at that time, NASA will ensure appropriate flexibilities through the use of contract options or other means to explore the use of commercial alternatives, if feasible.Estimated Completion Date: December 31, 2027.
Quote from: VSECOTSPE on 10/12/2023 05:53 pmNASA’s Transition of the Space Launch System to a Commercial Services ContractNASA Inspector General Report 24-001 (10/13/23)Adjusting SLS contracting mechanisms to save money is like responding to the high cost of 24-karat-gold toilet paper by switching to 23-karat-gold toilet paper.
Our analysis shows a single SLS Block 1B will cost at least $2.5 billion to produce—not including Systems Engineering and Integration costs—and NASA’s aspirational goal to achieve a cost savings of 50 percent is highly unrealistic. Specifically, our review determined that cost saving initiatives in several SLS production contracts such as reducing workforce within Boeing’s Stages contract and gaining manufacturing efficiencies with Aerojet Rocketdyne’s RS-25 Restart and Production Contract were not significant and, as a result, a single SLS will cost more than $2 billion through the first 10 SLS rockets produced under EPOC.
https://twitter.com/jeffvader10/status/1712504224200736894QuoteThe one good thing to come out of this is NASA concurring with the recommendation to evaluate commercial alternatives
In terms of a path forward, the IG also totally misses the fact that SLS has been reduced from an aspirational, multi-payload HLV to a single-use crew launcher, despite the report noting the payloads that SLS has lost and been unable to secure. Getting off SLS means getting off Orion and that means NASA must pursue a different lunar crew transport capability. Exploring or even purchasing commercial heavy launch won’t change anything. NASA has already migrated some Artemis payloads to Falcon Heavy. NASA has to let go of the lunar crew transport function. If not, it will continue to saddle Artemis with Orion/SLS cost, flight rate, flight safety, and related issues.
NASA should consider commercial alternatives to SLS, inspector general says"NASA’s aspirational goal to achieve a cost savings of 50 percent is highly unrealistic."by Eric Berger - Oct 13, 2023 7:07pm GMT12In recent years NASA has acknowledged that its large Space Launch System rocket is unaffordable and has sought to bring its costs down to a more reasonable level. The most recent estimate is that it costs $2.2 billion to build a single SLS rocket, and this does not include add-ons such as ground systems, integration, a payload, and more.
Not quite. I think they should kill both SLS and Orion, but it is at least possible to kill SLS and keep Orion. It's a lot more expensive and the extra design time would probably mean an extra SLS/Orion mission. The trick is to pay SpaceX enough to launch Orion on Starship, using an expendable special-purpose second stage that has Orion sitting on top. Yuck. I'm not sure SpaceX would want to do it.
Quote from: DanClemmensen on 10/13/2023 04:15 pmNot quite. I think they should kill both SLS and Orion, but it is at least possible to kill SLS and keep Orion. It's a lot more expensive and the extra design time would probably mean an extra SLS/Orion mission. The trick is to pay SpaceX enough to launch Orion on Starship, using an expendable special-purpose second stage that has Orion sitting on top. Yuck. I'm not sure SpaceX would want to do it.Difficult to know for sure without running the analysis, but I doubt the Orion LAS would be compatible with Superheavy. Much bigger fireball to escape. If Orion had to stick around, I bet it would wind up on a F9H with a modified upper stage. But the amount of money that would have to be spent to keep Orion viable on a new launcher would just be better spent qualifying Starship or other crew vehicles.
Quote from: VSECOTSPE on 10/13/2023 08:59 amIn terms of a path forward, the IG also totally misses the fact that SLS has been reduced from an aspirational, multi-payload HLV to a single-use crew launcher, despite the report noting the payloads that SLS has lost and been unable to secure. Getting off SLS means getting off Orion and that means NASA must pursue a different lunar crew transport capability. Exploring or even purchasing commercial heavy launch won’t change anything. NASA has already migrated some Artemis payloads to Falcon Heavy. NASA has to let go of the lunar crew transport function. If not, it will continue to saddle Artemis with Orion/SLS cost, flight rate, flight safety, and related issues.Not quite. I think they should kill both SLS and Orion, but it is at least possible to kill SLS and keep Orion. It's a lot more expensive and the extra design time would probably mean an extra SLS/Orion mission. The trick is to pay SpaceX enough to launch Orion on Starship, using an expendable special-purpose second stage that has Orion sitting on top. Yuck. I'm not sure SpaceX would want to do it.
Quote from: DanClemmensen on 10/13/2023 04:15 pmNot quite. I think they should kill both SLS and Orion, but it is at least possible to kill SLS and keep Orion. It's a lot more expensive and the extra design time would probably mean an extra SLS/Orion mission. The trick is to pay SpaceX enough to launch Orion on Starship, using an expendable special-purpose second stage that has Orion sitting on top. Yuck. I'm not sure SpaceX would want to do it.Difficult to know for sure without running the analysis, but I doubt the Orion LAS would be compatible with Superheavy. Much bigger fireball to escape. If Orion had to stick around, I bet it would wind up on a F9H with a modified upper stage.
However, despite Boeing's intent to increase production and secure additional SLS customers to achieve its cost reduction targets, to date these efforts have been unsuccessful. For example, the Department of Defense, specifically the Air Force and Space Force, have declined to use the SLS due to lower-cost alternatives with existing capabilities that meet their needs such as SpaceX’s Falcon Heavy and ULA’s Atlas V, as well as ULA’s forthcoming Vulcan Centaur rocket. Moreover, even though Congress initially directed NASA to use the SLS for the Science Mission Directorate’s Europa Clipper mission, NASA subsequently received congressional approval to use another launch vehicle and the Agency contracted with Space X for a Falcon Heavy rocket at a cost of $178 million.In the near term, the SLS remains the only launch vehicle with the capability to lift the 27-metric ton Orion capsule to lunar orbit. However, in the next 3 to 5 years other human-rated commercial alternatives may become available. These commercial ventures will likely capitalize on multiple technological innovations, making them lighter, cheaper, and reusable. Further driving down costs is the competition between aerospace companies such as SpaceX, ULA, and Blue Origin, with both SpaceX and Blue Origin currently developing reusable medium- and heavy-lift launch vehicles that will compete with NASA’s SLS single-use rocket.
I thought this section was pretty interesting:...
According to Agency officials, this goal is aspirational and not based on actual analysis, ...
