SpaceX Falcon 9 : GPS III SV01 : SLC-40 : Dec. 23, 2018 - DISCUSSION

[oldAtlas_Eguy]

The timeline between the RFP and award was 7 months. So if SpaceX avoids falling on its face in the next 8 months it is highly likely it will win the GPS 3-3 award as well.

[Lar]

The timeline between the RFP and award was 7 months. So if SpaceX avoids falling on its face in the next 8 months it is highly likely it will win the GPS 3-3 award as well.

ULA might lowball. Or warrant the launch? But the former is dangerous as it sets a precedent. They're in a bit of a bind. As some people predicted they would be, some considerable time ago.

[ulm_atms]

Since this is a 2018 launch bid...

Anyone want to take a wager that bid 1 was for a new 1st stage and bid two was for a reused 1st stage?

Just one of the few reasons I can see SpaceX submitting two bids.  Looking forward to seeing what the second bid was.

[sewebster]

They may have bid an expendable launch with tons of margin for 90+M and a recoverable launch for 83M. I don't see the value in offering vertical integration for a payload that doesn't need it.

But don't they just use the margin if they need it on a planned recoverable launch? Or do you mean a "better" orbit such that the satellite has more margin for its perigee raising? But I agree that if it does not require vertical integration then that probably wasn't the other bid.

Anyone want to take a wager that bid 1 was for a new 1st stage and bid two was for a reused 1st stage?

Aha, that could be it too.

[The Amazing Catstronaut]

Since this is a 2018 launch bid...

Anyone want to take a wager that bid 1 was for a new 1st stage and bid two was for a reused 1st stage?

Just one of the few reasons I can see SpaceX submitting two bids.  Looking forward to seeing what the second bid was.

Quite likely - the second bid could have been considerably cheaper.

If that's the case, almost certainly the airforce went for a fresh stage - as they should and good on them. No sense purchasing unproven technology yet.

[FutureSpaceTourist]

I agree a re-used stage could be the second bid but the submission date was before SpaceX had successfully returned any stage. Of course SpaceX planned to re-use stages and had got close to returning them but they must have known that the USAF wouldn't be that adventurous right off the bat? So I do wonder what the point of such a second bid was?

[macpacheco]

Since this is a 2018 launch bid...

Anyone want to take a wager that bid 1 was for a new 1st stage and bid two was for a reused 1st stage?

Just one of the few reasons I can see SpaceX submitting two bids.  Looking forward to seeing what the second bid was.

My bet is government contracts will provide brand new stages to increase/replenish the warehouse.
They are likely to be the last to go for reuse. Specially the DoD.

[FutureSpaceTourist]

Which is almost exactly the average of SpaceX's old 2012 bid of $80M and ULA's expected $200M or so bid, according to Brett Tobey (ie $125M plus ELC).  Coincidence, or did the Gov't just average the two numbers?

http://arstechnica.com/science/2016/03/ula-executive-admits-company-cannot-compete-with-spacex-on-launch-costs/

The press write-up of yesterday's remarks says the 40% cheaper referred to estimates of previous missions, which is being interpreted as 40% cheaper than ULA (eg see http://www.reuters.com/article/us-space-spacex-launch-ula-idUSKCN0XP2T2). But that would seem to imply no factoring in of ELC in the estimates (which I guess could be true if the estimates were done a while ago) ?

But clearly the USAF know the ELC can't be factored in anymore - indeed isn't there a clause that explicitly precludes such cross subsidy from other government contracts? So 40% seems a bit low in terms of saving.

[beidou]

Likely this will be a SpaceX mission...

The Air Force announced today (April 27, 2016) the award to Space Technologies Corporation (SpaceX) of an $82.7-million contract for GPS III Launch Services.

The Air Force characterized the contract as “the first competitively sourced National Security Space (NSS) launch services contract in more than a decade.” However, a decision last November by the United Launch Alliance (ULA), a joint venture of Boeing and Lockheed, not to compete for this GPS III launch effectively left SpaceX as the only bidder.

Announced by the Space and Missile Systems Center (SMC) at Los Angeles Air Force Base, California, the firm-fixed price, standalone contract requires SpaceX to provide the Government with a total launch solution for the second GPS III satellite, which includes launch vehicle production, mission integration, and launch operations and spaceflight certification. The launch will be the second for the GPS III program and is scheduled to take place from Cape Canaveral Air Force Station, Florida, in May 2018.

http://insidegnss.com/node/4930

[Skyrocket]

Thanks! Any particular reason why? Doesn't the Centaur inject GPS sats into their final orbit for Atlas V missions? What about Delta IV?

It was changed for GPS-III

In fact, GPS-IIF was the only series, which used direct insertion into the final orbits - all other (GPS I, II, IIA, IIR, IIRM and III) used (or use) their own apogee propulsion system or motor.

[terryy]

The press write-up of yesterday's remarks says the 40% cheaper referred to estimates of previous missions, which is being interpreted as 40% cheaper than ULA (eg see http://www.reuters.com/article/us-space-spacex-launch-ula-idUSKCN0XP2T2). But that would seem to imply no factoring in of ELC in the estimates (which I guess could be true if the estimates were done a while ago) ?

But clearly the USAF know the ELC can't be factored in anymore - indeed isn't there a clause that explicitly precludes such cross subsidy from other government contracts? So 40% seems a bit low in terms of saving.

The 40% comparison in this case is probably right since the ELC money is pretty much a "sunk cost".  The USAF would be paying that amount whether or not ULA won the contract.  If let's say ULA won the contract with a $180 million bid and they determined the ELC contribution was worth $60 million.  ULA would wind up refunding the USAF that $60 million which will get you your net $120 million launch cost.

[HIP2BSQRE]

So why did not SpaceX bid $100 million?  It would have still won the contract...

[WHAP]

SpaceX could have bid $200M and won the contract.  They were the only bidder.

[Lar]

So why did not SpaceX bid $100 million?  It would have still won the contract...

Short term gain but long term off message. SpaceX wants to be perceived as not just a dollar or two cheaper but a LOT cheaper...

(my theory only)

[sewebster]

So why did not SpaceX bid $100 million?  It would have still won the contract...

Not sure how this sort of contract works, but they might have to justify their costs to some degree and therefore can't just jack up the profit margin arbitrarily "just because they can."

[deruch]

SpaceX could have bid $200M and won the contract.  They were the only bidder.

Yeah, but as @Lar commented, that wouldn't fit their branding goals.  Though, as a bonus(?), they would have made ULA look really stupid since one of their official reasons for not bidding was that the USAF's focus on price and not reliability essentially made it useless for them to bid in the first place (this was in addition to their claims of being precluded from bidding by the accounting issue). 

[terryy]

So why did not SpaceX bid $100 million?  It would have still won the contract...

Not sure how this sort of contract works, but they might have to justify their costs to some degree and therefore can't just jack up the profit margin arbitrarily "just because they can."

Since this is a fixed priced contract they don't have to justify their expenses like they would on a cost-plus contract. So SpaceX could have bid whatever price they wanted and without a competing ULA bid they could have gone pretty high and still won. Though I'm not sure at which point they found out ULA was not bidding.  It could have been too late to change the bid.

But one of the nagging doubts surrounding SpaceX in the launch industry seems to be that these low prices SpaceX is offering is only temporary and that once they gain dominance they'll jack up their rates to more of the current industry norm. So coming in with a very high bid in this case would probably have counter productive long term. This is just the impression I get from reading the various SpaceX coverage over the last few years.  This could be real or it could just be FUD spread by their competitors.

[Herb Schaltegger]

So why did not SpaceX bid $100 million?  It would have still won the contract...

Not sure how this sort of contract works, but they might have to justify their costs to some degree and therefore can't just jack up the profit margin arbitrarily "just because they can."

Since this is a fixed priced contract they don't have to justify their expenses like they would on a cost-plus contract.

Not to the same level of detail, but they DO have to convince the federal contracting officer to have some degree of confidence in the bid pricing. In other words, if the KO doesn't believe the amount SpaceX pinned onto their proposal is reasonable and will support  successful mission, the KO wouldn't have awarded the contract, even if there were no other bidders.

[AncientU]

So why did not SpaceX bid $100 million?  It would have still won the contract...

Not sure how this sort of contract works, but they might have to justify their costs to some degree and therefore can't just jack up the profit margin arbitrarily "just because they can."

Since this is a fixed priced contract they don't have to justify their expenses like they would on a cost-plus contract. So SpaceX could have bid whatever price they wanted and without a competing ULA bid they could have gone pretty high and still won. Though I'm not sure at which point they found out ULA was not bidding.  It could have been too late to change the bid.

But one of the nagging doubts surrounding SpaceX in the launch industry seems to be that these low prices SpaceX is offering is only temporary and that once they gain dominance they'll jack up their rates to more of the current industry norm. So coming in with a very high bid in this case would probably have counter productive long term. This is just the impression I get from reading the various SpaceX coverage over the last few years.  This could be real or it could just be FUD spread by their competitors.

There doesn't seem to be evidence of jacking up the price*, so your suggested answer seems to be correct.

* In fact, they have upped capability by huge steps with a fairly constant price -- and advertised a 30% or so reduction in price for reused cores.  Long term projections from their management hint at incredibly lower costs/prices.

[Dante80]

I think that the actual bid price has to also do with the type of mission this contract is about. GPS sats can be horizontally integrated and don't need a lot of the "special stuff" in GSE or the pad that other, more "exotic" DoD payloads do.

Which means that the campaign itself would be less expensive than others. I expect to see a much bigger price for a F9 contract in the future if the payload needs vertical integration and special feeds, hardware or procedures..

What WOULD be interesting to know imo...is what their second bid was about..