FAILURE: SpaceX Falcon I Launch III - August 2

[Nate_Trost]

Note that I said Falcon 1e, not Falcon 1. They have a few more Falcon 1 flights on the manifest, however they are no longer taking orders for the Falcon 1 and have not listed any Falcon 1e flights yet. They've grown enough to try and do F9/Dragon/COTS that doing F1e if the flight rate is only 1-2 a year may not be worth the effort.

[iamlucky13]

1.) Based on what Elon said, the engine thrust taper off was longer than expected, and this is why the vehicle failed.

2.)  If the first stage had been test launched with a dummy second stage, the nut failure and first stage/second stage contacts would have still happened but would have been much less expensive failures, and would have happened earlier. This path would have been safer, but not as sexy.

3.) After that will the competitors cut their rates temporarily to force Spacex into bankruptcy?
The assumption that the competition will stand still is a foolish one, but it seems to be in every rocket business plan.

1.) The term "Burp" keeps getting used in this thread, and I think that's incorrect and misleading. Taper-off is more in line with what one would expect and what the video of staging seems to show (smooth accelleration and recontact).

2.) Launch 1 and maybe launch 3 I agree with this on. Launch 2 got value out of having the second stage, which would partially support a full-up launch 3 despite the new engine. It still seems to me that the shut-down transient should have been predicted. They had a light payload that should have given them margin to be very conservative about their staging delay. Rather than waste a 1st stage merely to time the transient, just give it maybe 10 seconds and improve it for later flights. Since it got missed, however, they might not even be watching for it with a dummy stage.

3.) An unsustainable cut in rates merely to drive out competition is illegal. Anyways, it's not like they are without competition now (Russia, Japan, Europe, Israel, now India even). Also Falcon can't do everything the other companies do.

[Lee Jay]

We're calling it a "burp" because of what is seen at 2:57 in the video in this message:

http://forum.nasaspaceflight.com/index.php?topic=10356.msg304528#msg304528

[nobodyofconsequence]

No, that's a wrong calculation. Sunk costs don't count. For each launch he has to decide if the cost of THAT launch will be recouped by the coming business, the money you spent before is gone, no matter how you decide, only money you are ABOUT to spend counts for a decision.

Not sunk cost but capital use effectiveness. When you add private investors, this is what you brag about to show how good a businessman you've been at running the thing. Plus, since you've told everybody how you've cracked the code on launch vehicle development, Falcon 1 becomes the metric against how other projects are compared. In this case, the dev costs allocated against successful launches gives you some idea how Falcon 9 and succeeding LV's and there services will do.

You're right about a Boeing or LockMart with sunk cost - but that is because they are established and the manner by which they account for ULA revenues is quite different. Don't assume that "newspace" can pull off the same deal. Look no further than Kistler - you can't sweep it  all under the rug.

[William Barton]

US competitors who "cut their rates to force SpaceX into bankruptcy" could wind up facing action by the Justice Dept. Foreign competitors... that's 100% politics (instead of only 90%).

So it's OK for Elon to sell launches below cost, but not for anyone else to do it?

So far, Elon is selling trips to Davy Jones' Locker. What's the going rate for that? Fact is, until he starts launching things to orbit, nobody can claim he is "selling launches below cost." And the issue for those competitors who "cut their rates to force SpaceX into bankruptcy" is the motive. I don't think anyone imagines SpaceX will be driving ULA into bankruptcy any time soon. In fact, he will merely be forcing them (if he can) to lower their costs and become more efficient. Last time I checked, that was the essense of capitalism.

[William Barton]

US competitors who "cut their rates to force SpaceX into bankruptcy" could wind up facing action by the Justice Dept. Foreign competitors... that's 100% politics (instead of only 90%).

I would think that depends on who the customer is. Which in turn would make it quite unlikely ULA or others would go dump out SpaceX, would probably hurt 'em more than SpaceX does.

Other than the "Invisible Hand of the Marketplace," nothing compels a commercial customer to buy from the lowest priced vendor. I don't even think there's a law forcing government agencies to do that, because they can take other factors into account.

[aero313]

US competitors who "cut their rates to force SpaceX into bankruptcy" could wind up facing action by the Justice Dept. Foreign competitors... that's 100% politics (instead of only 90%).

So it's OK for Elon to sell launches below cost, but not for anyone else to do it?

They could get sued by the US gov't for overcharging, if they were to advertise lower prices that are not available to the US gov't. 

Come on, Jim.  You know there are easy ways around this.  Just look at Orbital's Responsive Small Spacelift contract with SMC.  It's not a Pegasus, it's a Raptor 1.  Same SRMs, same wing, same fins, same L-1011, but it's NOT a Pegasus (nudge, nudge, wink, wink) so Orbital can charge the Air Force less than they charge NASA.

[pippin]

Not sunk cost but capital use effectiveness. When you add private investors, this is what you brag about to show how good a businessman you've been at running the thing. Plus, since you've told everybody how you've cracked the code on launch vehicle development, Falcon 1 becomes the metric against how other projects are compared. In this case, the dev costs allocated against successful launches gives you some idea how Falcon 9 and succeeding LV's and there services will do.

Still no. You're mixing Marketing/Technology with Finance.
He has to convince them, that he will be able to deliver. That's basics and has nothing to do with development costs.
If they believe he can, investors will only look at the business case from their point of entry, not how much money he sank before.

I don't know about Kistler, but I'm pretty sure the reason they didn't find investors was one of
a) Investors were not convinced they would make it to orbit or
b) Investors were not convinced in the operational business case once they make it into orbit.
I don't think they ran away for hearing how much money Kistler had sunk before.

[pippin]

US competitors who "cut their rates to force SpaceX into bankruptcy" could wind up facing action by the Justice Dept. Foreign competitors... that's 100% politics (instead of only 90%).

I would think that depends on who the customer is. Which in turn would make it quite unlikely ULA or others would go dump out SpaceX, would probably hurt 'em more than SpaceX does.

Other than the "Invisible Hand of the Marketplace," nothing compels a commercial customer to buy from the lowest priced vendor. I don't even think there's a law forcing government agencies to do that, because they can take other factors into account.

That was not my point:
ULA is almost exclusively doing gov. business. So the only customer they could offer lower prices to is gov. But if they do that, they have no other business opportunity to recoup that from, because they only sell to the government.
Now these gov. guys usually are not as dumb as some people make 'em, so as soon as ULA comes in and tell 'em: "No need to buy at SpaceX, we'll sell you that service at 25% of the current price", they will say "Cool, let's make a long-term contract" and here goes ULA's business case for the next 20 years.
No need for Justice Department to sue 'em...

[HIPAR]

There are requirements to be met that do not necessarily pertain to the actual work when executing a government contract.  All that boiler-plate that's stapled onto the basic work statement escalates the final costs.

That's why commercial launches can be sold for less.

---  CHAS

[pippin]

That's why commercial launches can be sold for less.

Who does that (in the US)?
ULA doesn't sell commercial launches.
SeaLaunch doesn't sell to gov.
OK, maybe Orbital.

[Jim]

There are requirements to be met that do not necessarily pertain to the actual work when executing a government contract. 

Not true for launch services

[nobodyofconsequence]

Still no. You're mixing Marketing/Technology with Finance.
He has to convince them, that he will be able to deliver. That's basics and has nothing to do with development costs.
If they believe he can, investors will only look at the business case from their point of entry, not how much money he sank before.

I don't know about Kistler, but I'm pretty sure the reason they didn't find investors was one of
a) Investors were not convinced they would make it to orbit or
b) Investors were not convinced in the operational business case once they make it into orbit.
I don't think they ran away for hearing how much money Kistler had sunk before.

Depends on who you define as "investors". Definitely Kistler's aren't Space-X's. One's I know use capital efficiency as a way to gauge the health of an investment, and they won't invest in a hole in the ground.

But yes, get some sharkskin suit IVB's from Miami, and all they care about is the going forward story. But Musk won't touch their money, no matter. Money isn't just money.

[Antares]

1.) The term "Burp" keeps getting used in this thread, and I think that's incorrect and misleading. Taper-off is more in line with what one would expect and what the video of staging seems to show (smooth accelleration and recontact).

Without seeing the telemetry, we can't know this.  Of the turbo engine shutdown signatures I can envision, most have 1-3 low frequency pulses in them (and lots of low amplitude, higher frequency ones) rather than being a taper-off.

[Antares]

There are requirements to be met that do not necessarily pertain to the actual work when executing a government contract.

Not true for launch services

I agree, but why then do they tack ~25% on to the commercial cost to account for govt insight.  I cannot figure that out.  It really can't cost them that much more to deal with us.

[pippin]

Depends on who you define as "investors". Definitely Kistler's aren't Space-X's. One's I know use capital efficiency as a way to gauge the health of an investment, and they won't invest in a hole in the ground.

Which is exactly what I said.
Ones I know will only care about "capital efficiency" (aka ROI) of THEIR investment, not what happened before. "Hole in the ground" is about credibility.

[wannamoonbase]

There are requirements to be met that do not necessarily pertain to the actual work when executing a government contract.

Not true for launch services

I agree, but why then do they tack ~25% on to the commercial cost to account for govt insight.  I cannot figure that out.  It really can't cost them that much more to deal with us.

I think it does.  We have federal clients and the burden of doing work with the Feds is at least 25% more onerous than commercial clients.  And that isn't launch services.

Lots more things like 'hurry up and wait' changing objectives, indecisiveness and general CYA measures.  I can't fault them too much as much of its done to ensure that the taxpayers are getting their money worth.

[nobodyofconsequence]

... "capital efficiency" (aka ROI) of THEIR investment, not what happened before. ...

Not to keep picking at this bone, but ROI is something else. Yes, one might wish to think they are, but "past performance is no indication of future returns".

[pippin]

... "capital efficiency" (aka ROI) of THEIR investment, not what happened before. ...

Not to keep picking at this bone, but ROI is something else. Yes, one might wish to think they are, but "past performance is no indication of future returns".

OK, ROI is a net value. but please note that I stated that it's ROI of the INCREMENTAL investment that counts. Here CE and ROI have pretty much the same meaning.

[aero313]

There are requirements to be met that do not necessarily pertain to the actual work when executing a government contract.

Not true for launch services

I agree, but why then do they tack ~25% on to the commercial cost to account for govt insight.  I cannot figure that out.  It really can't cost them that much more to deal with us.

You're kidding, right?  The NASA oversight...  oops, I mean INSIGHT...  requires significant additional manpower to answer RIDS that frequently add no value.