Falcon 1 - Post Failure thread

[braddock]

rocketmantitan - 22/5/2006  3:31 PM
With new launch capability contracts planned to help retain critical skills and capabilities during rough periods of no launches, the AF planned to use this capability the taxpayer was funding by spreading launches between both companies.  [...] It doesn't do any good to pay a company to retain critical people and maintain facilities if you are not going to award a rocket production and launch to them.

But the new launch capability contracts are the problem that caused SpaceX to yell "subsidy".  Can you explain the benefits of the new structuring more clearly to me?  

To "divide the next year's launch awards more evenly between the companies" is a moot point when shortly after the AF announced capability contract plan (at the bequest, or even discontinuation threat, of B & LM) the two companies announced that they were going to combine operations.

As for the pre-allocations of launches until 2010, it appreantly wasn't clear enough to the Government Accountability Office that it was informal because when SpaceX complained, the GAO wouldn't let it proceed until the AF amended Buy 3 to spell it out.

This is all I meant by "funny maneuvering".  It was not business as usual last year; whether it was the potential threat from SpaceX, or B and LM wanting a security blanket and some margin I don't know (although I actually suspect the later).

Personally I feel if LM and B really can't make a profit on their EELV vehicles, they should raise the ticket price.  We certainly aren't in a dry spell now, and with the desperate need for new military comsats launching around 2010-2012 I don't see that we will be for a while.  But I am no expert, and I welcome a better education in this.  

I also don't understand why the USAF has to allocate particular launches to a particular program, causing the boom/bust you spoke of in Buy 1.  If they can really review on a yearly basis and reallocate payloads between Atlas or Delta (which I thought was very difficult), why haven't they done that all along for the flights they have already bought?

And the fact that an anonymous Government agency has contracted for a Falcon 9 does not mean the AF/EELV program has embraced Falcon as an EELV-qualified booster.  

I would be pretty suprised if our unnamed government agency wasn't the usual unnamed government agency, namely the NRO...certainly a primary EELV-class customer.  But I certainly agree that SpaceX has a long way to go there.

[rocketmantitan]

Here's my take on several of your questions/comments:

1.  "But the new launch capability contracts are the problem that caused SpaceX to yell "subsidy".  Can you explain the benefits of the new structuring more clearly to me? "

The AF EELV strategy back in 1998, when the original 26 launches were awarded in one batch, appeared to rely upon two significant factors:  a robust commercial market and timely launches of the planned AF/NRO satellites.  Both factors failed to appear.  I think the plan in 1998 was that all 26 EELV launches in the first buy would be finished by the end of 2006.  In reality, only 2 comsats (the DSCS satellites launched on Delta IVs) have been flown to date!  None of the SBIRS, GPS IIF, DMSPs, WGS, or NRO satellites have yet flown.  And the commercial market dried up.  Instead of a robust build and launch schedule, with launches popping off the pads frequently with little downtime in the factory or on the pads and customers able to leverage competition for fixed price launch services, the EELVs end up with months (or years) between launches.  This leaves the contractors living with the negotiated prices from 1998 that turned out to be money losers.  At the same time the Government wants Boeing and Lockheed Martin to retain the skilled workforce (management, engineering, launch ops, subcontractors) necessary for mission success.  And the Boeing and Lockheed Martin launch business managers go to their boards of directors who question why the respective companies want to stay in the launch business.  Ugly business.

The AF leadership proclaimed the policy of two families of EELVs during the last few years.  This drove a change in strategy away from the market envisioned in 1998 to the reality of today's market.  One part was the establishment of launch capability contracts.  This gives the government and the contractor the opportunity to retain key elements of the workforce.  Rather than risk layoffs because there aren't launches for several months, the launch capability contracts provide a "bridge" (my words) between launches.  The AF strategy announced the contractors were to size the workforce to support 3 launches/year from the Cape (and 1/yr from Vandenberg).    Clearly, in FY2006, there won't even be that many launches.  However, without this capability underpinning the manifest, the contractors could make draconian decisions (layoffs, defer maintenance) that would minimize costs, but risk mission success.  

A key feature of last year's EELV strategy was also to avoid paying the contractor twice.  Neither contractor can "get well" on their Buy 1 awards from 1998.  The new contracts have to take into account the reality that the taxpayer got a great deal on the 1998 prices.  Likewise, should Lockheed Martin or Boeing sell a commercial launch in the future, the EELV contracts need to provide the appropriate cost offsets to prevent the contractor from charging the AF for something that really is paid for by the commercial customer (or absorbed by Boeing/Lockheed Martin).

Each contractor also works under a second contract that "buys" the actual rocket, called a launch services contract.  The EELV program essentially pays what the rocket costs, plus whatever is the negotiated profit, at a fixed price.  However, this obviously does not include the items contracted for under the launch capability contract.



2.  "To "divide the next year's launch awards more evenly between the companies" is a moot point when shortly after the AF announced capability contract plan (at the bequest, or even discontinuation threat, of B & LM) the two companies announced that they were going to combine operations."

Granted, with an approved United Launch Alliance (one year and still waiting on OSD to render an opinion to the Federal Trade Commission), the AF can go to the single company and balance out booster production and launch to keep both EELV families viable.  However, the strategy for EELV was approved before the companies announced they wanted to merge.  AF had to have an approved strategy before proposal requests could ever leave house.  So the AF went with the business market they perceived existed, and maintained compliance with the President's policy.    


3.  "As for the pre-allocations of launches until 2010, it appreantly wasn't clear enough to the Government Accountability Office that it was informal because when SpaceX complained, the GAO wouldn't let it proceed until the AF amended Buy 3 to spell it out."

The amended RFP issued by the Air Force did give the GAO the opportunity to deny the SpaceX protest.  However, by then, SpaceX had moved to the US Courts and the issue was no longer in the GAO's decision authority.  I think the writing was on the wall and SpaceX cut its losses by jumping to the next level in the appeals process before getting the answer they didn't want to receive.


4.  "Personally I feel if LM and B really can't make a profit on their EELV vehicles, they should raise the ticket price.  We certainly aren't in a dry spell now, and with the desperate need for new military comsats launching around 2010-2012 I don't see that we will be for a while.  But I am no expert, and I welcome a better education in this.  "

That is essentially what is happening in EELV Buy 3.  The contractors aren't going to lose money again, especially when the President's policy and AF policy and strategy state to maintain both families for the near-future (many read the policy as driving a reevaluation of two EELV families in 2010).  If the AF only had a single contract for launches with each provider, instead of the launch capability and launch service contracts, the bill is still going to be the same.  Breaking EELV up into two contracts with each company gives the AF more insights into cost, business structure, and management, while incentivizing mission success.  In my opinion, it gives the AF flexibility that it didn't have with the 1998 structure.  The overall bill didn't change, just how the program is managed.

5.  "I also don't understand why the USAF has to allocate particular launches to a particular program, causing the boom/bust you spoke of in Buy 1.  If they can really review on a yearly basis and reallocate payloads between Atlas or Delta (which I thought was very difficult), why haven't they done that all along for the flights they have already bought?"

The AF cannot easily reallocate the Buy 1 missions to achieve a better balance between Lockheed Martin and Boeing.  All the Buy 1 missions were allocated and awarded in 1998.  Each company holds onto their specific missions - prestige, guaranteed missions being two factors I believe.  For example, Lockheed Martin already is awarded the launch of SBIRS Geo 1.  Moving it to a Delta IV would be a fight.  (Not that the AF hasn't reallocated payloads -- the AF Under Secretary did this in 2003 after Boeing's violation of Procurement Integrity Act).  I think the AF could remove a satellite to the other booster, but then would owe the 'losing' provider a launch of an equivalent weight-class satellite in the same timeframe.  And there aren't spare satellites sitting around without a ride.  And the AF doesn't have money for spare boosters - one of the fallacies of assured access to space.  Also, I recall that in late 2004/early 2005, the launch manifest featured only one Delta IV for the EELV program from the Buy 1 awards in a span from FY06 through late FY08. Given what I called the boom/bust situation from Buy 1, the EELV program got approval to split up the Buy 3 missions to help even out the flow.  So while the Buy 1 missions are a done deal, Buy 3 gives an opportunity for the AF to level out the total EELV manifest to come close to the 3/year for each company from the Cape (and 1/year from Vandenberg).  

As for future competitors to Lockheed Martin and Boeing, the challenge is to first become a qualified EELV provider.  And having cleared that big hurdle, the new provider(s) has to meet the criteria that determine the award of a launch service.  I think new providers will have a trouble competing their new medium EELV against an Atlas V model 411, for example, if Atlas V has gone 10-for-10 and the new medium EELV has never flown.  Would you put your national security satellite on a new booster when you already have two proven families of launch vehicles?  One of the footstomp lessons from the Launch Broad Area Review was the risk of saving millions of dollars with reduced oversight/insight, only to lose a billion dollar rocket/satellite combination.  Arguing for launch services based primarily on cost competition requires the US to start building cheaper, replaceable satellites.  Without them, the cost of failure is still too high.

[braddock]

rocketmantitan,
That was the best explaination of the situation that I've ever seen.  Thank you.

It sounds like the real mistakes were made back in the inflexibility and over-optimisim of the 1998 procurement on all sides.  An expected eight years worth of 26 pre-allocated fixed-price launches in one batch contract before the vehicles even fly seems like a pretty awful idea, even for the heady dot-com years.  I suppose it financed the vehicle development though.

Now that the vehicles exist, and a reasonably healthy market outlook even exists, it doesn't seem like the right time to throw out the original ideals of the EELV program and move to a subsidy/"capability" system and another huge 23 launch contract.  Only the threat that Boeing or LM will discontinue pushed that change.  Then, after they get all they want from the AF to assure two programs they pull the ULA stunt (if there is more to that, I'm happy to hear it).

B & LM can't legally bill the indirect costs of the extended timeline of the Buy 1 launches to the Buy 3 procurements, but they certainly can add it to whatever "profit" margin they have on the fixed price contracts for future Buy 3 launches.  They have a steady stream of them in the pipeline now; those 23 launches aren't going to disappear (and I agree with you that they aren't very likely to go to SpaceX in this timeframe).

I don't see the need to throw out the competitive ideals of the EELV program just as new competition and a brighter launch market are beginning to emerge.  It slams the door on the very environment the program hoped to create.

[mlorrey]

Jim - 20/5/2006  6:57 PM

mlorrey - 20/5/2006  6:37 PM

braddock - 20/5/2006  10:44 AM

New article now on the front page; SpaceX antitrust case closed (for good).

Well, only until LM/B engage in any new shenanigans against SpaceX. New evidence/new acts always justifies reopening a case.

Again, stop with the conspiracy BS.  Quit with the accusations, you have no proof.   There weren't any old "shenanigans.

Can anyone see anywhere here where I've made an accusation?

What I will say: the complaints that SpaceX made, seem to me to be valid: LM's monopolization of Vandenberg with its Titan launch that took a number of months longer to put together than previous Titan launches, seemed suspect to SpaceX. Their attorney's agreed enough with them that they advised litigation. The judge disagreed, fine. Judges have a history of tossing cases where the government is a co-defendant or potentially may become one, despite the merits, particularly when the government yaks about "national security".

Given that LM and Boeing's two EELVs held ALL USAF launch contracts at the time SpaceX entered into the anti-trust suit, and their proposed ULA merger obtained all launches without the USAF entertaining competitive bidding, makes a de facto monopoly.

No accusations, no conspiracy BS. Your attacks and exaggerations of my statements, IMHO constitute a real attack. What is your motivation? You certainly can't argue against the fact that ULA had all of the launch contracts at the time SpaceX launched the suit?

[Jim]

ULA doesn't exist.

LM and Boeing did not do any "shenanigans" against SpaceX in the first place, which they would have to do before it is "some more"

"LM's monopolization of Vandenberg with its Titan launch"   That was a DOD call, nothing to do with LM , plus it is usually the payload that causes delays .   And they were justifed and vindicated since the Falcon doesn't have destruct system.

[bad_astra]

the Falcon doesn't have destruct system.

It destructed just fine, apart from the stuff that went through the hut roof.  

[aero313]

mlorrey - 24/5/2006  1:52 PM
What I will say: the complaints that SpaceX made, seem to me to be valid: LM's monopolization of Vandenberg with its Titan launch that took a number of months longer to put together than previous Titan launches, seemed suspect to SpaceX.

Sorry, but that's a comment that demonstrates lack of real-world experience (or else, conspiracy mongering).  Orbital trajectories from SLC-3W directly overfly SLC-4E.  With a Titan IV/Centaur and classified payload on the pad, you're talking about a national asset worth in excess of $2 billion.  The DoD would not allow ANY launch vehicle to overfly that pad under those conditions.  More to the point, VAFB clearly informed SpaceX of this restriction when they (SpaceX) chose to operate out of SLC-3W, long before Elon had put any money into that launch site.  This is the same thing 30SPW/XR told any new program that considered using SLC-3W.  OSC was so informed in 1990 when they considered using SLC-3W for Taurus launches (I was in that meeting).  Elon has no one to blame but himself.

[Cretan126]

This just out - SpaceX touts 10th vehicle on manifest:  http://biz.yahoo.com/prnews/060531/law096.html?.v=49

However, reading the article it's apparent this "win" is just the replacement vehicle for the failed launch.  I guess there's nothing like having a satisfied(?), repeat customer...

[bad_astra]

I also wonder if they are counting the fact that Bigelow pulled out on them.

[Skyrocket]

bad_astra - 31/5/2006  7:38 PM

I also wonder if they are counting the fact that Bigelow pulled out on them.

Doesn't look, if Bigeleow pulled out (see http://biz.yahoo.com/prnews/060531/law096.html?.v=49 ).  They only switched the payloads: The Genesis payloads are both on Dnepr, but the one to be laucnhed on a Falcon-9 should be one of the Guardian 1/2-size models

Gnter

[NEberly]

Bigelow still plans to launch on Falcon 9, likely the 2nd or 3rd launch; whenever it is available he has said he will use it.
Human spaceflight is slipping slowly out of NASA control...how refreshing!
N-

[Jim]

NEberly - 1/6/2006  12:06 PM

Bigelow still plans to launch on Falcon 9, likely the 2nd or 3rd launch; whenever it is available he has said he will use it.
Human spaceflight is slipping slowly out of NASA control...how refreshing!
N-

I haven't seen any US manned orbital launches other than NASA lately.   how could it be slipping when no one else is close.

[bad_astra]

I haven't seen many US Government manned orbital launches lately, either.

[Jim]

bad_astra - 2/6/2006  10:12 AM

I haven't seen many US Government manned orbital launches lately, either.

Knew that was coming.  

But it has been doing it,  it will be doing it  and continue to be doing it

The system we have was determined by the people thru their elected officials.

[bad_astra]

Jim - 2/6/2006  9:20 AM

bad_astra - 2/6/2006  10:12 AM

I haven't seen many US Government manned orbital launches lately, either.

Knew that was coming.  

But it has been doing it,  it will be doing it  and continue to be doing it

The system we have was determined by the people thru their elected officials.

If only I could convince "the people" to allow NASA to send up a refurbished Gemini docked to a Centaur for a lunar flyby joyride during the 2010-2012 downtime.

[Jim]

What would that accomplish?

[bad_astra]

nothing, it would just make me happy

[NEberly]

All of Bigelow's test flights are baby steps toward the availability of a private manned space station; the goal being to provide a revenue producing destination for a commercial human spaceflight crew vehicle system.

N-

[guidanceisgo]

Its interesting that Elon thumps his chest on getting a 10th bird which is just a government subsidy to fix his vehicles problems.   Its also interesting to note he lost the next bunch of TACSATS to Oribital's Minotaur I.  The TACSAT-2 and 3 were supposed to fly on Falcon.  They did get bids to launch the TACSATS on that $100 million dollar IDIQ.   I wonder if he lost on price ( no one knows what was bid on RSS, so the $6-7 million number may not stand), or on the government just not believing in Falcon anymore?

[josh_simonson]

>I wonder if he lost on price ( no one knows what was bid on RSS, so the $6-7 million number may not stand), or on the government just not believing in Falcon anymore?

Or just the government wanting to keep a variety of launchers in buisness so that problems with any one of the launchers doesn't leave them with a capability gap.