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Pentagon sees doubled cost for rocket launch program
by
edkyle99
on 24 May, 2013 14:42
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#1
by
ClaytonBirchenough
on 24 May, 2013 17:08
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Can't wait for Spacex to start getting a slice of this market. I wonder where they get the savings of 1 billion a year though...
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#2
by
Star One
on 24 May, 2013 17:39
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Can't wait for Spacex to start getting a slice of this market. I wonder where they get the savings of 1 billion a year though...
Be interesting to see what ULA's response will be once they feel the heat of some actual competition.
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#3
by
newpylong
on 24 May, 2013 18:04
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Be interesting to see what ULA's response will be once they feel the heat of some actual competition.
Their response will be like any other company who feels competition - they will need to become more efficient and set themselves apart from the competition. I think you will see more Boeing and LM sub-system consolidation and a push for ACES, etc.
I know everyone has a hard on for SpaceX but right now they have a lot to prove and can't hold a candle to ULA's success rate, especially on critical payloads. Due to this, ULA still has time to adjust to more than one player in their market.
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#4
by
FutureSpaceTourist
on 24 May, 2013 19:03
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I know everyone has a hard on for SpaceX but right now they have a lot to prove and can't hold a candle to ULA's success rate, especially on critical payloads. Due to this, ULA still has time to adjust to more than one player in their market.
Agreed. There are already signs of change, such as the collaboration with XCOR on an upper stage engine.
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#5
by
ClaytonBirchenough
on 24 May, 2013 19:11
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Can't wait for Spacex to start getting a slice of this market. I wonder where they get the savings of 1 billion a year though...
Be interesting to see what ULA's response will be once they feel the heat of some actual competition.
Lowering of prices possibly?
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#6
by
Nate_Trost
on 24 May, 2013 20:06
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Trying to understand where the bulk of the money goes.
$70 billion over 15 years, $4.67 billion a year. Divide that by a $200K/year burdened manpower cost and you end up with ~23,300 people for an average annual 'headcount' assuming the costing was 100% labor.
Now obviously it isn't all labor costs, or direct ULA costs, and ULA uses a lot of external suppliers, but ULA itself is down to what, 3,500 people? PWR seems to be what, another 1,500? If you added up ULA, PWR, other externals and the relevant USAF/DoD would it even reach 10,000 people supporting EELV? And I don't think the actual average fully-burdened cost of each head involved in the program would reach $200K...
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#7
by
Robotbeat
on 24 May, 2013 21:09
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...corporate profits and overhead.
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#8
by
spectre9
on 24 May, 2013 23:18
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ULA can't close any pads or down select to the Atlas V.
Some of the money helps them maintain that full capability.
Once SpaceX has FH launching from both coasts perhaps that equation will change.
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#9
by
ClaytonBirchenough
on 25 May, 2013 00:15
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ULA can't close any pads or down select to the Atlas V.
Some of the money helps them maintain that full capability.
Once SpaceX has FH launching from both coasts perhaps that equation will change.
Hopefully that equation will change.
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#10
by
deltaV
on 25 May, 2013 01:46
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$70 billion over 15 years, $4.67 billion a year. Divide that by a $200K/year burdened manpower cost and you end up with ~23,300 people for an average annual 'headcount' assuming the costing was 100% labor.
My understanding of the article is that $70 billion is the total for the entire program from its start in the mid 1990s until 2028. That's 30+ years, not 15, so your estimates are about 2x too big.
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#11
by
Antares
on 25 May, 2013 02:13
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ULA's response will be to quit. That is what Boeing wanted to do and the DoD wouldn't let them out. If/when SpaceX is established as an EELV provider, there will still be two EELV-class rocket families. ULA will dissolve and one of Atlas or Delta will die. The survivor will revert to its parent company and have to compete on a FAR 12 basis. If the price difference is wide enough, the heritage fleet will continue at a subsistence level (like the initial 7-flight award to Atlas). The choice of more expensive Delta vs Russia-tied Atlas will be an interesting one, with the possible ingredient of Delta having more lift capacity with the Heavy than the 551. Killing Delta would have a massive effect on PWR (and MSFC engines) as well.
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#12
by
ClaytonBirchenough
on 25 May, 2013 02:19
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ULA's response will be to quit. That is what Boeing wanted to do and the DoD wouldn't let them out. If/when SpaceX is established as an EELV provider, there will still be two EELV-class rocket families. ULA will dissolve and one of Atlas or Delta will die. The survivor will revert to its parent company and have to compete on a FAR 12 basis. If the price difference is wide enough, the heritage fleet will continue at a subsistence level (like the initial 7-flight award to Atlas). The choice of more expensive Delta vs Russia-tied Atlas will be an interesting one, with the possible ingredient of Delta having more lift capacity with the Heavy than the 551. Killing Delta would have a massive effect on PWR (and MSFC engines) as well.
When did Boeing try and quit?
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#13
by
Antares
on 25 May, 2013 02:45
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End of 2004, beginning of 2005. IIRC. Too little profit margin in competitive rockets compared to its other lines of business.
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#14
by
joek
on 25 May, 2013 03:02
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$70 billion over 15 years, $4.67 billion a year. Divide that by a $200K/year burdened manpower cost and you end up with ~23,300 people for an average annual 'headcount' assuming the costing was 100% labor.
My understanding of the article is that $70 billion is the total for the entire program from its start in the mid 1990s until 2028. That's 30+ years, not 15, so your estimates are about 2x too big.
It's $51B over the next 15 years, not $70B over 15 years
or over 30+ years edit: that last is correct, but the issue is future costs, not historical costs. From
Evolved Expendable Launch Vehicle: DOD Is Addressing Knowledge Gaps in Its New Acquisition Strategy, GAO Jul-Aug 2012:
DOD plans to spend about $19 billion to acquire launch services from fiscal year 2013 to fiscal year 2017, and total program costs through 2030 are expected to approach $35 billion.
This report shows doubling of that GAO estimate to $70B, or +$51B FY2013-2028.
Ed's estimate of $468.2 million per is right (I get $463.6 assuming 110 launches).
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#15
by
joek
on 25 May, 2013 08:02
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Addendum and correction to previous post: Based on other reports, the GAO report above appears to have a typo, or at least a conflict with other GAO and DoD estimates....
As Ed said, the average price per EELV is $468.2M over the total program life of ~1996-2030 ($70B/151). That is a fairly simple calculation, but what it does not show is the alarming increase in current and future EELV costs ("the lie of the average")...
1. Oct-1998 projected total program costs $17.8B for 181 launches for an average unit cost of $98.7M over the life of the program.
2. Mar-2012 projected total program costs $35B for 92 launches for an average unit price of $381M over the life of the program.
3. Mar-2013 projected total program costs $70B for 151 launches for an average unit price of $468.2M over the life of the program.
Granted, DoD got a steal on the first decade's EELV prices (as those prices were based on higher commercial launch rates projected way-back-when which would reduce DoD prices), but bottom line is EELV cost growth is a serious concern.
My rough approximation is the future unit cost is ~$475M/unit ~2013-2017, and ~$583M/unit ~2018-2028 (unfortunately the time frame of various estimates are different, so hard to pin to exact ranges). Note: those are "launch services" costs (which includes projected integration, mission assurance, etc.), not simply the cost of the LV.
Also of note, the FY2013-2017 numbers are based on block buys from ULA in order to reduce unit LV costs. Which means DoD is committed to buying a number of cores each year, even if they don't use them. Whether DoD can actually use them at the rate produced/bought is another point of concern, as the DoD has historically not met their schedule, so surplus LV's would go into storage and stockpile. Subsequently pulling them out of storage for use will incur additional future costs.
And lest anyone get the wrong impression, this is not solely ULA's fault. The DoD is ultimately responsible for mismanaging the program and allowing the kids to run wild. (Although one might hope and expect ULA to be more mature, per GAO reports, they have demonstrated otherwise.)
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#16
by
edkyle99
on 25 May, 2013 15:54
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The original intent of the EELV program was to "reduce launch costs by at least 25 percent over heritage Atlas, Delta and Titan space launch systems".
The original plan was to down-select to one launch vehicle.
Frustrating.
- Ed Kyle
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#17
by
kevin-rf
on 26 May, 2013 00:05
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Factoring in inflation, where would those programs be today? I suspect Titan would be even worse, if GPS had switched to Atlas because it grew to large for Delta, Delta would also have been in a death spiral.
Personally, I think they have an overhead problem, not a manufacturing and launch cost problem. To many mouths to feed spread over to few launches.
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#18
by
joek
on 26 May, 2013 00:56
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Factoring in inflation, where would those programs be today? I suspect Titan would be even worse, if GPS had switched to Atlas because it grew to large for Delta, Delta would also have been in a death spiral.
Warning: BOTE WAG... Assuming 3% inflation and a 1995 baseline: $350M Titan III then would be ~$630M today; $450M Titan IV then would be ~$812M today. That assumes no learning curve or other economies and optimizations over the intervening ~20 years, which is arguably pessimistic. Throw in a 10-20% discount assuming such economies, and it's looks like pretty much a wash with todays EELV costs.
Personally, I think they have an overhead problem, not a manufacturing and launch cost problem. To many mouths to feed spread over to few launches.
Nominally agree as the original EELV program cost projections were based on overly-optimistc launch rates. However, recent "should cost" reviews indicate that DoD and ULA don't have credible and objective information or justification for the recent cost increases.
In particular, see
EVOLVED EXPENDABLE LAUNCH VEHICLE: DOD Needs to Ensure New Acquisition Strategy Is Based on Sufficient Information, GAO, Sep-2011. That was GAO's way of saying "DOD's New Acquisition Strategy Is Not Based on Sufficient Information". As that report shows, that obtains from DoD's inability to answer basic questions as to what the EELV program should cost, which in turn is the result of ULA's inability to answer basic cost questions.
In short, there is a serious program management problem from the DoD through ULA and their suppliers. DoD left the program largely unchecked (arguably a significant part of that a result of declaring the program in "sustainment" phase circa 2007, which has since been rescinded). The outcome being what we see today: outrageous cost growth and a poster child for one of the worst managed DoD programs.
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#19
by
sdsds
on 26 May, 2013 02:14
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http://www.reuters.com/article/2013/05/24/us-pentagon-satellite-launches-idUSBRE94N04320130524
and
The original intent of the EELV program was to "reduce launch costs by at least 25 percent over heritage Atlas, Delta and Titan space launch systems".
The original plan was to down-select to one launch vehicle.
Frustrating.
Thanks for starting this thread! The original plan was good, but it still isn't clear whether the modified plan (supporting two diversely redundant launch systems) was a mistake. Indeed, even if both systems eventually close out with near-perfect launch records that
still won't imply either one would have had an equally good record had it been tasked with flying the entire set of missions.
As matters stand right now, USAF has bought (via the redundancy) an insurance policy against which they haven't yet needed to make a claim. In hindsight insurance that never gets used always looks like an unnecessary expense!
I'm curious whether there are many signs the USAF itself is at all dissatisfied with the cost vs. realized and anticipated benefits of the EELV program?
