Lawmakers Seek To Curb EELV Block Buy

[cambrianera]

Didn't found any recent match on "block buy".
Maybe this is new:
http://www.spacenews.com/military/120806-lawmakers-curb-eelv-block-buy.html
"We support the Air Force’s effort to achieve some economies of scale to provide the best value for the taxpayer, but we are concerned that any EELV block buy that goes beyond three years worth of launches will unnecessarily exclude competition,” Reps. Mike Rogers (R-Mich.) and Dutch Ruppersberger (D-Md.) wrote in the Aug. 2 letter"
"The Air Force was expected to award ULA a contract this summer for a total of 46 rockets to cover military launch needs from 2013 to 2017.
However, the service recently decided to delay the block buy until at least next year."

[Robert Thompson]

SpaceX’s Musk Says ULA Space Launch Monopoly a ‘Mistake’ By Brendan McGarry - Sep 29, 2011 5:29 PM MT
http://www.bloomberg.com/news/2011-09-29/spacex-ceo-musk-says-boeing-lockheed-launch-monopoly-a-mistake-.html

Competition and the future of the EELV program
by Stewart Money 
Monday, December 12, 2011
http://www.thespacereview.com/article/1990/1

[Ben the Space Brit]

Competition in any commercial (or even pseudo-commercial, as in this case) market has to be a good thing.  That said, and no offence intended, but I've got a feeling it will be a long while (>3 years) before SpaceX can seriously challenge ULA's effective current monopoly in USG GSO launches.

[Nomadd]

 It's one of those vicious circle things. The more a launch costs the more you put into the asset you're launching and the more reliable the launcher needs to be. The thing that could break the circle is the AF deciding that a whole lot of eggs in one satellite isn't the optimal way to go. Those $2 billion beasts might be unparalleled in capability, but it doesn't help if you're not over the spot you need to be. When they go for a lot more, lot cheaper, more specialized assets a much lower cost, slightly lower reliability rated launcher might be an option. I doubt if I'm the only one who thinks 10 $100 million LEO birds could be a lot more valuable than a single $1 billion one for intelligence and secure, low latency comms. Mr. Allen has to be thinking of that market.

[oldAtlas_Eguy]

It's not the cost but the quantity of identical payloads built. The one-of-a-kind payload results in the cannot-fail for the LV.

[Lurker Steve]

If you take the AEHF program as an example, that was a 6.5 Billion dollar program for 3 sats and parts for a 4th. That's replacing Milstar which is, 5 or 6 satellites. The launch costs are a small fraction of the total program cost.

Do you really think Milstar could have been replaced by a constellation of 30 satellites cheaper than 6.5 Billion ?

Doesn't the larger constellation have corresponding larger operational costs ?

[oldAtlas_Eguy]

Comm sats especially now data sats have to have a tremendous capability increase due to how fast the data demand is rising. An AEHF sat will be 4-10 times more throughput than the sats its replacing plus the minimum for global coverage is 3 sats plus on orbit spare. Less orbital slots mean the other slots can be used for something else.

So yes the LV on such sats is not a big cost driver. But what if instead of a 15 year lifespan the sats were built with a 5 year lifespan? Total reliability levels would decrease sat costs tremdously. So $6.5B would be used to purchase 12 sats at $500M including launch costs instead of 4 at $1,500M including launch costs with each subsequent set of 4 having a capbility increase of 2-4 launched every 5 years. Planned obsolescence. This was an option that the AF Space Command commander metioned in his report to Congress that the AF was investigating as a cost cutting measure to model it to see if costs would lower, stay-the same or be higher that the current method.

A launch cost $180M on a $1.5B sat is 12% of the cost but for a $500M sat its 36% of the cost making using a much cheaper LV a requirement for meeting the budget. The LV costs would have to be <$65M to be the same 12%. The two scenarios shows how marginal the cost differences at the program level when using the two differnt LV's most appropriate for the scenario. If ULA's costs rise significantly then the differences are no longer marginal and become significant.

[Nomadd]

 But, it's not 180M a launch, is it? In fact when you add the government's total EELV cost during this block buy divided by the number of launches, it's going to be more than twice that much.

 I thought is was obvious I wasn't referring to geo satellites but to LEO intelligence gathering and low latency comms. It doesn't matter if you have the greatest sat in the universe if it isn't where you need it. And, things like controlling drones would be a lot better when you didn't have to wait more than 1/2 second for a response. The military is full of people who like giant, flashy multi billion dollar toys. The same ones who want to replace A-10s with F-16s. But the fact is, an Iridium like constellation would serve a lot of needs better than a geo sat ever could. But not at $180 million a launch.

 Being able to put up an asset in a custom orbit on a moments notice would also be a huge plus.
 

[edkyle99]

But, it's not 180M a launch, is it? In fact when you add the government's total EELV cost during this block buy divided by the number of launches, it's going to be more than twice that much.

Right.  One report mentioned $19 billion for 46 launches ($413 million each).  Another mentioned $15 billion for 40 launches ($375 million each).  The total reportedly only includes four Delta 4 Heavy launches during the 2013-2017 span.  These totals likely include the launch readiness contract costs.

 - Ed Kyle

[Prober]

But, it's not 180M a launch, is it? In fact when you add the government's total EELV cost during this block buy divided by the number of launches, it's going to be more than twice that much.

Right.  One report mentioned $19 billion for 46 launches ($413 million each).  Another mentioned $15 billion for 40 launches ($375 million each).  The total reportedly only includes four Delta 4 Heavy launches during the 2013-2017 span.  These totals likely include the launch readiness contract costs.

 - Ed Kyle

given the "history" with the EELV, hope the Government doesn't ruin  working systems to save money.   In some cases the Government has done more damage then help.

[Jim]

But the fact is, an Iridium like constellation would serve a lot of needs better than a geo sat ever could. But not at $180 million a launch.

Not really.  That is only a small part of the DOD needs.

[Nomadd]

But the fact is, an Iridium like constellation would serve a lot of needs better than a geo sat ever could. But not at $180 million a launch.

Not really.  That is only a small part of the DOD needs.

 Say that the next time you're trying to hold a conversation with a half second delay while under fire, or control some device in real time.

[Jim]

But the fact is, an Iridium like constellation would serve a lot of needs better than a geo sat ever could. But not at $180 million a launch.

Not really.  That is only a small part of the DOD needs.

 Say that the next time you're trying to hold a conversation with a half second delay while under fire, or control some device in real time.

That is the small part of DOD needs.

[Lurker Steve]

But the fact is, an Iridium like constellation would serve a lot of needs better than a geo sat ever could. But not at $180 million a launch.

Not really.  That is only a small part of the DOD needs.

 Say that the next time you're trying to hold a conversation with a half second delay while under fire, or control some device in real time.

Instead of a launch-on-demand, don't they use drones and AWACS for this purpose instead ?

The original Iridium constellation was very expensive to deploy, and that was done with "commerical-grade" communications standards.

I suppose you could look at what the Air Force is spending to replace the current GPS constellation. It's a lot of launches, but it's still going to cost 7-8 Billion to replace the current constellation, with almost 1 Billion annual operating costs.

[edkyle99]

ULA fighting back against efforts to stop block buy.

http://blog.al.com/space-news/2012/08/ula_asks_us_rep_mo_brooks_for.html
"We welcome the competition," ULA production manager Daniel Caughran told Brooks."

Interesting info in this report included the following:

"ULA Chief Operating Officer Dan Collins said the plant is ramping up production from eight rockets a year to 12 or 13."

and

"During Thursday's tour, Brooks saw two Atlas rockets in final stages of assembly and one massive Delta IV. News photographers were allowed to take pictures of the Atlas boosters, but not the Delta. Defense Department security regulations and federal law prohibit assembly images, plant security said."

Strange, that last bit.  Can't take a picture of a rocket that will, ultimately, stand on a launch pad for all to see? 

 - Ed Kyle

[Rocket Science]

ULA fighting back against efforts to stop block buy.

http://blog.al.com/space-news/2012/08/ula_asks_us_rep_mo_brooks_for.html
"We welcome the competition," ULA production manager Daniel Caughran told Brooks."

Interesting info in this report included the following:

"ULA Chief Operating Officer Dan Collins said the plant is ramping up production from eight rockets a year to 12 or 13."

and

"During Thursday's tour, Brooks saw two Atlas rockets in final stages of assembly and one massive Delta IV. News photographers were allowed to take pictures of the Atlas boosters, but not the Delta. Defense Department security regulations and federal law prohibit assembly images, plant security said."

Strange, that last bit.  Can't take a picture of a rocket that will, ultimately, stand on a launch pad for all to see? 

 - Ed Kyle

This Collins quote has some errors in it… 

"Collins said two of the companies tapped by NASA to compete for contracts to launch astronauts to the International Space Station plan to use ULA's biggest rocket, the Delta IV, to lift their capsules. If either or both of those two companies -- Boeing and Sierra Nevada -- are chosen, that will mean more work for the Decatur plant."

[Prober]

ULA fighting back against efforts to stop block buy.

http://blog.al.com/space-news/2012/08/ula_asks_us_rep_mo_brooks_for.html
"We welcome the competition," ULA production manager Daniel Caughran told Brooks."

Interesting info in this report included the following:

"ULA Chief Operating Officer Dan Collins said the plant is ramping up production from eight rockets a year to 12 or 13."

and

"During Thursday's tour, Brooks saw two Atlas rockets in final stages of assembly and one massive Delta IV. News photographers were allowed to take pictures of the Atlas boosters, but not the Delta. Defense Department security regulations and federal law prohibit assembly images, plant security said."

Strange, that last bit.  Can't take a picture of a rocket that will, ultimately, stand on a launch pad for all to see? 

 - Ed Kyle

just read that.....you missed the key word "assembly"  sure thats kept closed for competition as well as other reasons.

[Ludus]

Just curious about what the military is really buying when they are paying for "can't fail" levels of reliability in launchers. Obviously the launchers can in fact fail no matter how many dump truck loads of cash they burn to propitiate the rocket gods. Is it something like the CYA mentality of a board of directors paying the most expensive CEO candidate because if he screws up they can at least say they bought the "best" talent money could buy? Or is there in fact some objective set of standards for what they are paying for like multiple independent inspections and tests of everything?

[Jim]

Or is there in fact some objective set of standards for what they are paying for like multiple independent inspections and tests of everything?

Not a set of standards, but the ability to see all test data and analyze it independently.  Not just for the vehicles that they are flying but for the whole fleet.

[john smith 19]

Not a set of standards, but the ability to see all test data and analyze it independently.  Not just for the vehicles that they are flying but for the whole fleet.

I think that's a better description than the GAO got out of ULA on the subject. 

It sounds like what you're mostly buying is an assurance that a) the supplier will take detailed records (of both tests but also parts mfg and assembly) and b) Storing all that data in case you want to analyze it later

Which sounds a pretty expensive bill for things the business *should* be doing to improve its products anyway + archiving it just in case.

Back when the cutting edge of document storage was manually copied microfilm and test results really *were* spools of papers from chart recorders that *may* have been defensible. 

But 10s of $m ? Either ULA are doing *very* sophisticated processing (lots of human intervention and processing time) on this data before putting it in storage or the mfg/test of an LV generates literally TB of data.

Either (both) is possible but they just seem *very* unlikely.

[FinalFrontier]

If SpaceX had:

A. A proven track record

B. Didn't blow up engines in flight.

I might be ok with this. But because of that, and because of the far longer and more extensive record of the EELV vehicles this strikes me as nothing more then politics at their worst intruding into things......again.

Seems like an obama gambit to put "new space" ahead again. I don't mind competition, especially when SpaceX is involved, but in this case they just don't have the credentials to warrant this, IMO.


We'll just have to see how this works out.

[john smith 19]

If SpaceX had:

A. A proven track record

B. Didn't blow up engines in flight.

I might be ok with this. But because of that, and because of the far longer and more extensive record of the EELV vehicles this strikes me as nothing more then politics at their worst intruding into things......again.

Seems like an obama gambit to put "new space" ahead again. I don't mind competition, especially when SpaceX is involved, but in this case they just don't have the credentials to warrant this, IMO.


We'll just have to see how this works out.

I'd suggest you read GAO-11-641

That block buy is based on "evidence" of an erosion of the US launch vehicle infrastructure that is *highly* questionable, over a period which people cannot *explain* their reasons for selecting.

As for Spacex's track record they got 3 F9's where they had to go and that *partial* engine failure probably worries people who *buy* launches (which is not the same group of people who *need* the launches) but probably impressed the users (who would be primary payload users).

Then there is the topic of "Mission assurance". DoD maintain it is *absolutely* needed to maintain their record of launch success, but ULA cannot explain what it *is*, it is too expensive to break out its costs from the rest of the mfg process but it's going up (a lot).

Does this sounds *pretty* suspicious to you?

[edit. I'd also suggest GAO-12-822 which notes the current policy is called "Buy 3" and breaks the contract into a fixed price section for the hardware and a cost plus section for this "mission assurance" and other stuff. IE *whatever* it costs you'll pay it.]

Even if DoD/NRO *began* the process of putting F9 on the selection process it would likely be at least a year before it would be accepted for use as an LV. By the time it would have passed analysis *either* there will be a substantial track record of successful F9 launches *or* their launch record will be so patchy as to make the idea of using them laughable.

[Robert Thompson]

Just curious about what the military is really buying when they are paying for "can't fail" levels of reliability in launchers. Obviously the launchers can in fact fail no matter how many dump truck loads of cash they burn to propitiate the rocket gods.

[Jim]

Not a set of standards, but the ability to see all test data and analyze it independently.  Not just for the vehicles that they are flying but for the whole fleet.

I think that's a better description than the GAO got out of ULA on the subject. 

It sounds like what you're mostly buying is an assurance that a) the supplier will take detailed records (of both tests but also parts mfg and assembly) and b) Storing all that data in case you want to analyze it later

Which sounds a pretty expensive bill for things the business *should* be doing to improve its products anyway + archiving it just in case.

Back when the cutting edge of document storage was manually copied microfilm and test results really *were* spools of papers from chart recorders that *may* have been defensible. 

But 10s of $m ? Either ULA are doing *very* sophisticated processing (lots of human intervention and processing time) on this data before putting it in storage or the mfg/test of an LV generates literally TB of data.

Either (both) is possible but they just seem *very* unlikely.

No, it is also the additional human interaction with the customer.  It takes many addtional MTS to deal with the customer requests.

[john smith 19]

No, it is also the additional human interaction with the customer.  It takes many addtional MTS to deal with the customer requests.

This just seems even more contradictory. The *impression* is of a structured, *mature* process which is carried out throughout the the procurement pretty much up to launch (at least).

Which suggests *standardized* meeting and data formats and probably support tools to assist them. Also as this a FAR process (mission assurance is a cost plus element of the contract according to the GOA) doesn't the govt have substantial access to the contractors database by default already?

Your description makes it sound *much* more ad hoc, with govt officials rounding up people and asking them for data more or less at random, rather than getting it themselves given their access to the contractor systems.

That does not sound like a programme that could be classed as in "sustainment." I'm not being snippy I'm genuinely fascinated because its costs seem to be seriously above inflation and rising.

[Jim]

Which suggests *standardized* meeting and data formats and probably support tools to assist them. Also as this a FAR process (mission assurance is a cost plus element of the contract according to the GOA) doesn't the govt have substantial access to the contractors database by default already?

Your description makes it sound *much* more ad hoc, with govt officials rounding up people and asking them for data more or less at random, rather than getting it themselves given their access to the contractor systems.

It isn't data in databases nor "govt officials".  The gov't gets all the flight data, standard analyses and participates in standard reviews.  It is more about the off nominal stuff were the engineers asking why did this happen or what are you going to do fix this or prevent this from happening.

Also, still providing access to databases and such still requires manpower.

[john smith 19]

It isn't data in databases nor "govt officials".  The gov't gets all the flight data, standard analyses and participates in standard reviews.  It is more about the off nominal stuff were the engineers asking why did this happen or what are you going to do fix this or prevent this from happening.

Also, still providing access to databases and such still requires manpower.

I'm still have trouble understanding the *scale* of these costs.
An engineer working a 40 hour week is 2080 hrs a year.
The Bureau of Labor Statistics reckons about $50 an hour salary for an aerospace engineer.
http://www.bls.gov/oes/current/oes172011.htm
But IIRC the rule of thumb is all support expenses make their costs *double* their salary.
So 2080hs @ $100/hr gives $208k/yr
so $100m buys 480 *full* time engineers to work on nothing but  "mission assurance"
However if I'm 100% out that $100m would only buy 240 engineers.
Which might be OK except Spacex build 80% of their launch vehicles with 1600 staff *total*.

While I can understand *payloads* are different (possibly radically so) the core *functions* of the LV's (and their major sub assemblies) are essentially the *same*. I would therefor expect that just as the LV's are "modular" in terms of engines, stages, strapons so each major component has a standard chunk of "mission assurance" that is assembled with it as the LV for a particular payload is assembled.

[Jim]

ULA has around 3500 people for two launch sites, 5 pads, 3 launch vehicle families and integration efforts for around 30 different spacecraft.

[Lurker Steve]

It isn't data in databases nor "govt officials".  The gov't gets all the flight data, standard analyses and participates in standard reviews.  It is more about the off nominal stuff were the engineers asking why did this happen or what are you going to do fix this or prevent this from happening.

Also, still providing access to databases and such still requires manpower.

I'm still have trouble understanding the *scale* of these costs.
An engineer working a 40 hour week is 2080 hrs a year.
The Bureau of Labor Statistics reckons about $50 an hour salary for an aerospace engineer.
http://www.bls.gov/oes/current/oes172011.htm
But IIRC the rule of thumb is all support expenses make their costs *double* their salary.
So 2080hs @ $100/hr gives $208k/yr
so $100m buys 480 *full* time engineers to work on nothing but  "mission assurance"
However if I'm 100% out that $100m would only buy 240 engineers.
Which might be OK except Spacex build 80% of their launch vehicles with 1600 staff *total*.

While I can understand *payloads* are different (possibly radically so) the core *functions* of the LV's (and their major sub assemblies) are essentially the *same*. I would therefor expect that just as the LV's are "modular" in terms of engines, stages, strapons so each major component has a standard chunk of "mission assurance" that is assembled with it as the LV for a particular payload is assembled.

Engineers straight out of college may have a salary around 50K/yr, but that can't be the industry average. Besides, that's just their salary. You forget about the benefits cost, plus the standard overhead costs of having an employee, like office space, office equipment (including computers, software, etc), the employers share of payroll taxes, etc.

Besides, just running the quality operation itself is expensive. What do you think it costs every time SpaceX test fires an engine in Texas ? I'm sure it's not gas it up and go. And even with their quality processes, they aren't finding all the manufacturing / assembly flaws. You could argue that SpaceX needs to spend more on mission assurance.

[john smith 19]

I'm still have trouble understanding the *scale* of these costs.
An engineer working a 40 hour week is 2080 hrs a year.

The Bureau of Labor Statistics reckons about $50 an hour salary for an aerospace engineer.

http://www.bls.gov/oes/current/oes172011.htm

But IIRC the rule of thumb is all support expenses make their costs *double* their salary.

So 2080hs @ $100/hr gives $208k/yr

so $100m buys 480 *full* time engineers to work on nothing but  "mission assurance"
However if I'm 100% out that $100m would only buy 240 engineers.
Which might be OK except Spacex build 80% of their launch vehicles with 1600 staff *total*.

While I can understand *payloads* are different (possibly radically so) the core *functions* of the LV's (and their major sub assemblies) are essentially the *same*. I would therefor expect that just as the LV's are "modular" in terms of engines, stages, strapons so each major component has a standard chunk of "mission assurance" that is assembled with it as the LV for a particular payload is assembled.

Engineers straight out of college may have a salary around 50K/yr, but that can't be the industry average. Besides, that's just their salary. You forget about the benefits cost, plus the standard overhead costs of having an employee, like office space, office equipment (including computers, software, etc), the employers share of payroll taxes, etc.

Besides, just running the quality operation itself is expensive. What do you think it costs every time SpaceX test fires an engine in Texas ? I'm sure it's not gas it up and go. And even with their quality processes, they aren't finding all the manufacturing / assembly flaws. You could argue that SpaceX needs to spend more on mission assurance.

Re-read my post. Specifically the source of my figures and my adjustment for benefit costs. Musk has stated that the *total* propellant bill is about $200k to orbit. c0.3% of launch price.

[JohnFornaro]

But IIRC the rule of thumb is all support expenses make their costs *double* their salary.
So 2080hs @ $100/hr gives $208k/yr
so $100m buys 480 *full* time engineers to work on nothing but  "mission assurance"
However if I'm 100% out that $100m would only buy 240 engineers.

Which would be $200/hr.

Engineers straight out of college may have a salary around 50K/yr, but that can't be the industry average. Besides, that's just their salary. You forget about the benefits cost, plus the standard overhead costs of having an employee, like office space, office equipment (including computers, software, etc), the employers share of payroll taxes, etc.

What the problem is?  Seems like he made an effort to suggest an industry average, already including the costs you mention.

[Lurker Steve]

But IIRC the rule of thumb is all support expenses make their costs *double* their salary.
So 2080hs @ $100/hr gives $208k/yr
so $100m buys 480 *full* time engineers to work on nothing but  "mission assurance"
However if I'm 100% out that $100m would only buy 240 engineers.

Which would be $200/hr.

Engineers straight out of college may have a salary around 50K/yr, but that can't be the industry average. Besides, that's just their salary. You forget about the benefits cost, plus the standard overhead costs of having an employee, like office space, office equipment (including computers, software, etc), the employers share of payroll taxes, etc.

What the problem is?  Seems like he made an effort to suggest an industry average, already including the costs you mention.

I don't know the aerospace industry, but you certainly couldn't build a staff of software, electrical, or mechanical engineers on that "average" salary. That's barely a starting salary in the Chicago area. Once those engineers get 5-10 years of experience, they are going to be looking for something in the 75-80K salary range, if not more. I would expect California-based companies to pay even higher salaries, given the higher cost of housing and other items.

My company uses a standard engineering cost of around 125-135/per man hour. That just a fully loaded estimate for covering salary / benefits / and the facility overhead.

[john smith 19]

What the problem is?  Seems like he made an effort to suggest an industry average, already including the costs you mention.

The source of my numbers was

http://www.bls.gov/oes/current/oes172011.htm#top

but if we go with the cost for the *top* 10% of aerospace engineers
$71.06/hr. *doubling* that to account for benefits and support costs gives $142.12. A 40 hr week at that rate gives $295609.6 [edit] per year.

so (assuming you're team is *exclusively* composed of aerospace engineers at the top 10% of the industry pay scale on *nothing* but "mission assurance" $100m gets you 338 engineers a year.

Caveats. I'm not an American so I cannot confirm that the "fully burdened" cost of an employee is 2x their annual salary. I can't remember where I saw that figure as a rule of thumb and I could be wrong. Increasing the multiplier (the direction I would *expect* it to go) would reduce the number of engineers.

but that is still one *hell* of a lot of variance between launches needing *all* this one off attention. 

[aero]

but if we go with the cost for the *top* 10% of aerospace engineers
$71.06/hr. *doubling* that to account for benefits and support costs gives $142.12. A 40 hr week at that rate gives $295609.6

Maybe this was explained above, but my calculator gives $71.06 x 2 x 40 = $5684.80 so I guess you mean, per year.

[oldAtlas_Eguy]

ULA has around 3500 people for two launch sites, 5 pads, 3 launch vehicle families and integration efforts for around 30 different spacecraft.

The comment here is that ULA recieves a yearly $650M launch assurance contract that would cover the cost of all of ULA's employees salaries and overhead. This ensures ULA dosn't have to fire anybody because it isn't launching often enough, or even at all. ULA is basiclly a cash basis operated company, it must maintain a positive profit. There isn't provision for survival through a year that has more costs than revenues. ULA dosn't get to keep and reinvest its profits.

The charges per launch vehicle would be for those purchases for parts and services that ULA pays someone else to provide.

[sdsds]

There isn't provision for survival through a year that has more costs than revenues. ULA dosn't get to keep and reinvest its profits.

You mean there's no automatic provision in such a situation, right? Is it wrong assume that if costs exceeded revenues, ULA's parent companies would decide to finance its operations?

[john smith 19]

The comment here is that ULA recieves a yearly $650M launch assurance contract that would cover the cost of all of ULA's employees salaries and overhead. This ensures ULA dosn't have to fire anybody because it isn't launching often enough, or even at all. ULA is basiclly a cash basis operated company, it must maintain a positive profit. There isn't provision for survival through a year that has more costs than revenues. ULA dosn't get to keep and reinvest its profits.

The charges per launch vehicle would be for those purchases for parts and services that ULA pays someone else to provide.

Note that would be *launch* assurance and is basically to keep the pads open and the staff on the payroll. I think this used to be called the "Assured access" payment or what Elon Musk refers to as the ULA "subsidy." IIRC it's nearer $1Bn a year.

*mission* assurance is the per mission costs to improve mission reliability which is broken out as a separate cost plus contract (apart from the LV purchase, which is fixed price) and whose definition seems somewhat vague. Except it's getting bigger (although the near term manifest is meant to include a number of 2nd and 3rd launches of existing payloads, which *should* be cheaper to do MA on)

[Jim]

*mission* assurance is the per mission costs to improve mission reliability which is broken out as a separate cost plus contract (apart from the LV purchase, which is fixed price)

No, it is included in the price of the launch service contract.

[JohnFornaro]

My company uses a standard engineering cost of around 125-135/per man hour. That just a fully loaded estimate for covering salary / benefits / and the facility overhead.

Fine, but I'm still not getting it.

BTW, when I do this sort of figuring, I use 2000 hours; it includes a two week vacation, and is easier for me to multiply by 2.

Anyhow, John Smith was starting out at $50/hr, which is a hundred grand a year; doubled to two hundred grand, in the ballpark of your two hundred fifty to two hundred seventy grand.

I took his number to roughly mean an average or maybe a median cost, some higher, some lower.  I took his term "all support services" to be roughly equivalent to our term "fully burdened".

But IIRC the rule of thumb is all support expenses make their costs *double* their salary.
So 2080hs @ $100/hr gives $208k/yr

Even then, you think his estimate is too low?

[Lurker Steve]

My company uses a standard engineering cost of around 125-135/per man hour. That just a fully loaded estimate for covering salary / benefits / and the facility overhead.

Fine, but I'm still not getting it.

BTW, when I do this sort of figuring, I use 2000 hours; it includes a two week vacation, and is easier for me to multiply by 2.

Anyhow, John Smith was starting out at $50/hr, which is a hundred grand a year; doubled to two hundred grand, in the ballpark of your two hundred fifty to two hundred seventy grand.

I took his number to roughly mean an average or maybe a median cost, some higher, some lower.  I took his term "all support services" to be roughly equivalent to our term "fully burdened".

But IIRC the rule of thumb is all support expenses make their costs *double* their salary.
So 2080hs @ $100/hr gives $208k/yr

Even then, you think his estimate is too low?

Yes, his estimate is too low, but no need to derail the discussion further.

I'm sure the "mission assurance" funding does more than just pay salaries.

[JohnFornaro]

ULA has around 3500 people for two launch sites, 5 pads, 3 launch vehicle families and integration efforts for around 30 different spacecraft.

The comment here is that ULA recieves a yearly $650M launch assurance contract that would cover the cost of all of ULA's employees salaries and overhead.

$650M / 3500 = $185K/yr.

Whether they launch or not?  And launch costs are added to this?

So the term "launch assurance" means keeping ULA going regardless of whether it is used.  The EELV block buy would institutionalize ULA, since "maybe" those EELV's would be used, therefore this $650M line item would be a part of the new ULA contract, over the years of the block buy.

Moving up the thread:

Which sounds a pretty expensive bill for things the business *should* be doing to improve its products anyway + archiving it just in case.

Isn't this $650M an expensive bill?

The new challenge to the company came this month when leaders of the U.S. House intelligence committee wrote Defense Secretary Leon Panetta opposing a new five-year "no compete" government launch contract with ULA.

...

"We welcome the competition," ULA production manager Daniel Caughran told Brooks. However, Caughran and other ULA executives cited factors including reliability and capacity to meet launch needs they said must be considered. Those are ULA assets, they said.

I don't want to receive BlackStar's ire again for asking questions of my "betters", but when there is competition on a contract, isn't "reliability and capacity" part of that competition?  If ULA "welcomes" competition, why would they fight it so vigorously?

Why is it necessary, other than from ULA's parochial viewpoint of profitability, to grant them a monopoly for more than three years?

[john smith 19]

$650M / 3500 = $185K/yr.

Whether they launch or not?  And launch costs are added to this?

Yes. But as Jim said it's also to keep all that hardware in a *useable* state. Keeping all that launch pad plumbing in good condition is *very* important. Some of those analysts with esoteric skillsets would *have* to be let go otherwise etc.

Isn't this $650M an expensive bill?

This is the DoD you're talking about. $650m here, $650m there, pretty soon we're talking real money. That's just personnel and infrastructure support costs.

Why is it necessary, other than from ULA's parochial viewpoint of profitability, to grant them a monopoly for more than three years?

I'm sure they would argue it is *not* a monopoly. The logic is roughly

"You (the USG in this case) want us to stay in the launch business. But we can't *afford* to do that at the launch rate and in the way that we do business (which as you know is *essential* to ensuring your payloads don't become flaming fireballs in the upper atmosphere rather than perfectly orbiting satellites) that you (DoD, NRO, NASA) order them.

So unless you give us a little something to cover our running expenses *between* launches we'll just have to let *most* of those people go and perhaps sell off a pad or too to real estate developers.

Obviously we don't want to do this. It's just the costs of doing business (with us)"

[JohnFornaro]

Whoah. I wish I got $185K for keeping the Fornaro compound going.  Cooking meals, fixing the gutters, mowing the grass, keeping the car running...

But seriously, the 3500 employees to keep the hardware in a "useable" state whether or not they launch has got to be an excessive cost.  Is it the case that if they do launch something, they must hire additional people, since the 3500 are maintaining this hardware are kept employed full time at that effort?

That cannot be.

If this is not a sort of economic blackmail, then what would it be called?

[john smith 19]

But seriously, the 3500 employees to keep the hardware in a "useable" state whether or not they launch has got to be an excessive cost.  Is it the case that if they do launch something, they must hire additional people, since the 3500 are maintaining this hardware are kept employed full time at that effort?

That cannot be.

that's a bit of an exaggeration. IIRC that is the *whole* internal company staff IE including all their factory staff. Obviously some can be put on maintenance tasks, factory restructuring or training, but I guess there are limits on how much you can actually do until a new order for an LV comes in.

As to weather  $650m is fair or not it seems the USAF waived its right to detailed cost data at certain stages (GAO 12-822, 11-641, 08-1039) so it's a bit difficult to tell, although this appears to be changing. One of the key drivers of the ULA merger was that Lockheed agreed to drop its lawsuit on how Boeing acquired about 5000 pages of its internal proprietary documentation. DoD had the choice of having its 2 key LV suppliers tear themselves to pieces in the courts or join hands and let bygones be bygones. They chose the latter and got the FTC agree.

If this is not a sort of economic blackmail, then what would it be called?

If you're an organized crime family in New Jersey you blackmail people.

If you're a defense contractor you're playing the "loss of capability/jobs" card and having a "negotiation." BAe Systems are *very* familiar with this tactic in the UK.

[mrmandias]

The support cost multiplier decreases somewhat as the salary increases (some support costs are fixed costs that do not increase).  Your 2x sounds eminently reasonable.

What the problem is?  Seems like he made an effort to suggest an industry average, already including the costs you mention.

The source of my numbers was

http://www.bls.gov/oes/current/oes172011.htm#top

but if we go with the cost for the *top* 10% of aerospace engineers
$71.06/hr. *doubling* that to account for benefits and support costs gives $142.12. A 40 hr week at that rate gives $295609.6 [edit] per year.

so (assuming you're team is *exclusively* composed of aerospace engineers at the top 10% of the industry pay scale on *nothing* but "mission assurance" $100m gets you 338 engineers a year.

Caveats. I'm not an American so I cannot confirm that the "fully burdened" cost of an employee is 2x their annual salary. I can't remember where I saw that figure as a rule of thumb and I could be wrong. Increasing the multiplier (the direction I would *expect* it to go) would reduce the number of engineers.

but that is still one *hell* of a lot of variance between launches needing *all* this one off attention. 

[JohnFornaro]

As to whether [heh] $650m is fair or not it seems the USAF waived its right to detailed cost data at certain stages (GAO 12-822, 11-641, 08-1039) so it's a bit difficult to tell, although this appears to be changing. One of the key drivers of the ULA merger was that Lockheed agreed to drop its lawsuit on how Boeing acquired about 5000 pages of its internal proprietary documentation. DoD had the choice of having its 2 key LV suppliers tear themselves to pieces in the courts or join hands and let bygones be bygones. They chose the latter and got the FTC agree.

Who's got the time to read 45+36+32=113 pages of this stuff?  May the citizen rely on the summary?

What GAO Recommends (September 2008)

GAO recommends the Secretary of Defense take actions to: ensure the regular reporting of key information on program status, produce an independent life-cycle cost estimate, and ensure the program’s staffing meets its needs. DOD concurred with the recommendations. ...

The EELV program currently faces uncertainties in the reliability of the vehicles used to launch military and other government spacecraft as well as its budget for future years and in the merger of its two principal suppliers. Taken together, these unknowns require careful monitoring and oversight to ensure a fairly long track record of launch successes can continue.

What GAO Recommends (September 2011)

Among other things, GAO recommends DOD assess engine costs and mission assurance activities, reassess the length of the proposed block buy, and consider how to address broader launch acquisition and technology development issues.
DOD generally concurred with the recommendations. ...

What GAO Found
DOD officials believe the launch industrial base is unstable and plan to implement an acquisition strategy they believe will help stabilize it. The leading proposal would commit the government to a block buy of eight common booster cores—the main component of a launch vehicle—each year, for a 5-year term. However, this approach may be based on incomplete information and although DOD is gathering data that it needs as it finalizes the new acquisition strategy, some critical knowledge gaps remain.

What GAO Recommends (08-13-12)

GAO is making no new recommendations in this report. DOD reviewed and concurs with this report. ...

Ensure launch mission assurance activities are sufficient and not excessive, and identify ways to incentivize the prime contractor to implement efficiencies without affecting mission success as DOD develops a new contracting structure for the EELV program

Some action taken; more action needed

So, in 2008, "The EELV program currently faces uncertainties in the reliability of the vehicles used ..." By 2012, "some action had been taken on the first priority of 2008.  Apparently, the incentive for the prime contractor to "implement efficiencies without affecting mission success" amounts to $650M.  Nice work if you can get it.  So the incentive has been accomplished, correct?

But we still don't know if "launch mission assurance activities are sufficient and not excessive", do we?  After four years of round the clock work, by one guy:  the Program Executive Officer for Space Launch.  "More action needed."  Sheesh.

My immediate reaction to this plexor hammer is to turn on the sarcaso-meter:

"Reform" ITAR.  Give them $1.2B, doubling their incentive.  Then they'll move all those jobs to China so fast that it would suck today's storm surge out of Manhattan.  Problem solved.

Sarcaso-meter off.

[john smith 19]

But we still don't know if "launch mission assurance activities are sufficient and not excessive", do we?  After four years of round the clock work, by one guy:  the Program Executive Officer for Space Launch.  "More action needed."  Sheesh.

He *might* have a few assistants.

[JohnFornaro]

But we still don't know if "launch mission assurance activities are sufficient and not excessive", do we?  After four years of round the clock work, by one guy:  the Program Executive Officer for Space Launch.  "More action needed."  Sheesh.

He *might* have a few assistants.

You are confusing a sarcastic statement, with the salient point, thereby overlooking the salient point: 

After four years of work on launch mission assurance, more action is still needed, and launch mission assurance is by no means guaranteed by the corporation.  So far, it appears that that action will cost more than $650M/yr.   Since the work is still not complete, and the issuance of a deadline is assiduously avoided by the PEV in question, it is not yet clear how much more money is needed to "incentivize" the private corporation in question.

[john smith 19]

After four years of work on launch mission assurance, more action is still needed, and launch mission assurance is by no means guaranteed by the corporation.  So far, it appears that that action will cost more than $650M/yr.   Since the work is still not complete, and the issuance of a deadline is assiduously avoided by the PEV in question, it is not yet clear how much more money is needed to "incentivize" the private corporation in question.

Agreed. A suspicious person might get the idea the DoD was not trying very hard to find out exactly how this money is being spent.

[JohnFornaro]

A suspicious person might get the idea the DoD was not trying very hard to find out exactly how this money is being spent.

Sometimes I channel Alfred E. Neuman.

What, me suspicious?