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#60
by
LouScheffer
on 23 May, 2014 15:06
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http://www.bizjournals.com/denver/blog/boosters_bits/2014/05/ulas-per-launch-costs-rival-spacex-and-its-a.html?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A
ULA's per-launch costs rival SpaceX and it's a better overall value, CEO says
I am confused, from that article the block buy is 36 cores over 5 years for $11 billion. That works out to $305 million a core. In addition that does not appear to include the ELC cost of an average $1 billion a year, which would add another $5 billion over 5 years. If that is the case you end up with $444 million per core.
Either someway or somehow the figures presented are wrong or the claimed cost per launch simply isn't valid. Even if the $11 billion figure includes the ELC cost, $305 million a core is still a lot higher then the numbers being claimed.
What am I missing? 
What you are missing is that the block buy contract includes support to a large quantity of backlog missions. In other words, the denominator is wrong in your calculation. That is why we gave the $225M number which is arrived at by adding up the value of all our contracts (numerator) and dividing by the total number of missions represented in those contracts (denominator). Your calculation is off because the capability contract, which represents most of the cost in the block buy is an annual cost, not a per mission cost. It takes knowledge of the annual launch rate to determine a reasonable allocation of those costs to an individual mission. That is what I provided to get the $164M total price of a AV 401.
For example, the two missions we launched within the last week were supported by launch site labor that was charged to this year's capability contract (part of the block buy) even though neither was part of the 36 cores.
Thank you, George, for supplying some official numbers and what they mean.
I believe the number of most interest is the total cost ($ out of pocket by the govt) / (total launches), by year. As I understand you are saying the grand average number is $225M. My question is then over what launches and contracts were you averaging to get this number? All Atlas-V and Delta-IV launches to date, plus those planned? Or some more recent subset?
I ask since the block buy seems higher than this number. If the true total cost per mission is $225M, then the 27 missions of the block buy should be about $6.1B including BOTH hardware and capability for those missions. This means the remaining $4.9B is being used to provide capability for other missions, as you stated above. But assuming 2 years of missions already in the queue that are not covered by the block buy, at 1 launch per month, $4.9B/24 is $204M for capability alone, per mission. This does not seem compatible with a total mission cost of $225M.
So what other missions, and other contracts, did you average to arrive at your figure of $225M?
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#61
by
WindnWar
on 23 May, 2014 15:21
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What you are missing is that the block buy contract includes support to a large quantity of backlog missions. In other words, the denominator is wrong in your calculation. That is why we gave the $225M number which is arrived at by adding up the value of all our contracts (numerator) and dividing by the total number of missions represented in those contracts (denominator). Your calculation is off because the capability contract, which represents most of the cost in the block buy is an annual cost, not a per mission cost. It takes knowledge of the annual launch rate to determine a reasonable allocation of those costs to an individual mission. That is what I provided to get the $164M total price of a AV 401.
For example, the two missions we launched within the last week were supported by launch site labor that was charged to this year's capability contract (part of the block buy) even though neither was part of the 36 cores.
So how large is this quantity of backlog missions, 2? 10? 20?
This is part of what makes it impossible to find the real costs involved. In addition, why wouldn't those backlogged missions have been paid for under a previous contract, since prior to this each mission was sold on a case by case basis. If those missions are now included into this contract, is only the services for the missions included or are the cores included too? Does the ELC contract cover any of these expenses?
Not trying to be a pest but the info has so many gaps in it.
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#62
by
savuporo
on 23 May, 2014 18:19
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This is part of what makes it impossible to find the real costs involved.
I dont think it will ever work. Shuttle program is over, flights done, money paid, and there is still little agreement over what a flight actually cost. Some people look at it one way - "we paid $2B a year for the joy of having a Shuttle capability" and then the flight cost varied between $50M to $300M depending on the year. Other people take blunt total program cost divided by the number of the launches over the life of the program and come to a different figure.
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#63
by
RocketGoBoom
on 23 May, 2014 21:13
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For example, the two missions we launched within the last week were supported by launch site labor that was charged to this year's capability contract (part of the block buy) even though neither was part of the 36 cores.
I think if your cadence of launches remains roughly the same over the years (10 per year) then that will average out. For example, at the end of this current block buy, some cores may carry over into years beyond 5 years, so they will charged in years also not counted in this batch. So it is fair to still assign an average number of $90 million to $100 million for each launch.
Using an "incremental" number for Atlas V 401 to compare to Falcon 9 v1.1 is not really legitimate because that ignores the capability contract that is already paying your fixed costs. That doesn't appear to assign any amount extra for the capability subsidy to that extra incremental launch.
Or have I misread your explanation?
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#64
by
Will
on 23 May, 2014 23:12
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For example, the two missions we launched within the last week were supported by launch site labor that was charged to this year's capability contract (part of the block buy) even though neither was part of the 36 cores.
I think if your cadence of launches remains roughly the same over the years (10 per year) then that will average out. For example, at the end of this current block buy, some cores may carry over into years beyond 5 years, so they will charged in years also not counted in this batch. So it is fair to still assign an average number of $90 million to $100 million for each launch.
Using an "incremental" number for Atlas V 401 to compare to Falcon 9 v1.1 is not really legitimate because that ignores the capability contract that is already paying your fixed costs. That doesn't appear to assign any amount extra for the capability subsidy to that extra incremental launch.
Or have I misread your explanation?
For the near term decision between SpaceX and ULA, incremental is the right measure. SpaceX can't launch the whole DoD manifest, even if Falcon 9 v1.1 was certified, which it isn't. Since DoD has to keep the whole ULA capability in place, it's stuck with the overhead in any case. If they *do* buy some SpaceX launches, the overhead just shifts to the remaining ULA launches. Musk is exaggerating the potential savings of switching DoD payloads to SpaceX, if any, and I'm pretty sure he's smart enough that's what he's doing.
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#65
by
ChrisWilson68
on 23 May, 2014 23:29
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For example, the two missions we launched within the last week were supported by launch site labor that was charged to this year's capability contract (part of the block buy) even though neither was part of the 36 cores.
I think if your cadence of launches remains roughly the same over the years (10 per year) then that will average out. For example, at the end of this current block buy, some cores may carry over into years beyond 5 years, so they will charged in years also not counted in this batch. So it is fair to still assign an average number of $90 million to $100 million for each launch.
Using an "incremental" number for Atlas V 401 to compare to Falcon 9 v1.1 is not really legitimate because that ignores the capability contract that is already paying your fixed costs. That doesn't appear to assign any amount extra for the capability subsidy to that extra incremental launch.
Or have I misread your explanation?
For the near term decision between SpaceX and ULA, incremental is the right measure. SpaceX can't launch the whole DoD manifest, even if Falcon 9 v1.1 was certified, which it isn't. Since DoD has to keep the whole ULA capability in place, it's stuck with the overhead in any case. If they *do* buy some SpaceX launches, the overhead just shifts to the remaining ULA launches. Musk is exaggerating the potential savings of switching DoD payloads to SpaceX, if any, and I'm pretty sure he's smart enough that's what he's doing.
That isn't consistent with ULA's claim that the block buy saved $4 billion. Ask yourself where that $4 billion in savings from a block buy comes from if most of ULAs costs are fixed and the marginal costs of churning out another rocket are low.
The supposed $4 billion block buy savings implies that with the block buy ULA will be making a huge fixed investment to bring down the marginal cost of each unit, and that that investment won't be worth making if the block buy doesn't happen. So, really, that huge investment should be considered a marginal cost when comparing block buy against no block buy.
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#66
by
Will
on 24 May, 2014 00:10
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For example, the two missions we launched within the last week were supported by launch site labor that was charged to this year's capability contract (part of the block buy) even though neither was part of the 36 cores.
I think if your cadence of launches remains roughly the same over the years (10 per year) then that will average out. For example, at the end of this current block buy, some cores may carry over into years beyond 5 years, so they will charged in years also not counted in this batch. So it is fair to still assign an average number of $90 million to $100 million for each launch.
Using an "incremental" number for Atlas V 401 to compare to Falcon 9 v1.1 is not really legitimate because that ignores the capability contract that is already paying your fixed costs. That doesn't appear to assign any amount extra for the capability subsidy to that extra incremental launch.
Or have I misread your explanation?
For the near term decision between SpaceX and ULA, incremental is the right measure. SpaceX can't launch the whole DoD manifest, even if Falcon 9 v1.1 was certified, which it isn't. Since DoD has to keep the whole ULA capability in place, it's stuck with the overhead in any case. If they *do* buy some SpaceX launches, the overhead just shifts to the remaining ULA launches. Musk is exaggerating the potential savings of switching DoD payloads to SpaceX, if any, and I'm pretty sure he's smart enough that's what he's doing.
That isn't consistent with ULA's claim that the block buy saved $4 billion. Ask yourself where that $4 billion in savings from a block buy comes from if most of ULAs costs are fixed and the marginal costs of churning out another rocket are low.
The supposed $4 billion block buy savings implies that with the block buy ULA will be making a huge fixed investment to bring down the marginal cost of each unit, and that that investment won't be worth making if the block buy doesn't happen. So, really, that huge investment should be considered a marginal cost when comparing block buy against no block buy.
You seem to assume that variable costs are insensitive to volume. This is incorrect.
Consider. Suppose you own a bakery, and your biggest customer has concluded that he absolutely must have some undetermined number of pastries in the next five years. He agrees to pay the fixed cost of your building, kitchen, oven and management, even if he orders nothing at all.
Even so, you can still give him a better incremental price per cookie for 5,000 cookies per year than for 500, because your variable cost per cookie is less.
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#67
by
Avron
on 24 May, 2014 00:16
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For example, the two missions we launched within the last week were supported by launch site labor that was charged to this year's capability contract (part of the block buy) even though neither was part of the 36 cores.
I think if your cadence of launches remains roughly the same over the years (10 per year) then that will average out. For example, at the end of this current block buy, some cores may carry over into years beyond 5 years, so they will charged in years also not counted in this batch. So it is fair to still assign an average number of $90 million to $100 million for each launch.
Using an "incremental" number for Atlas V 401 to compare to Falcon 9 v1.1 is not really legitimate because that ignores the capability contract that is already paying your fixed costs. That doesn't appear to assign any amount extra for the capability subsidy to that extra incremental launch.
Or have I misread your explanation?
For the near term decision between SpaceX and ULA, incremental is the right measure. SpaceX can't launch the whole DoD manifest, even if Falcon 9 v1.1 was certified, which it isn't. Since DoD has to keep the whole ULA capability in place, it's stuck with the overhead in any case. If they *do* buy some SpaceX launches, the overhead just shifts to the remaining ULA launches. Musk is exaggerating the potential savings of switching DoD payloads to SpaceX, if any, and I'm pretty sure he's smart enough that's what he's doing.
That isn't consistent with ULA's claim that the block buy saved $4 billion. Ask yourself where that $4 billion in savings from a block buy comes from if most of ULAs costs are fixed and the marginal costs of churning out another rocket are low.
The supposed $4 billion block buy savings implies that with the block buy ULA will be making a huge fixed investment to bring down the marginal cost of each unit, and that that investment won't be worth making if the block buy doesn't happen. So, really, that huge investment should be considered a marginal cost when comparing block buy against no block buy.
You seem to assume that variable costs are insensitive to volume. This is incorrect.
Consider. Suppose you own a bakery, and your biggest customer has concluded that he absolutely most have some undetermined number of pastries in the next five years. He agrees to pay the fixed cost of your building, kitchen, oven and management, even if he orders nothing at all.
Even so, you can still give him a better incremental price per cookie for 5,000 cookies per year than for 500, because your variable cost per cookie is less.
What does the customer pay all up.. that what counts .. all the excuses, reasons, bull .. is meaningless unless its an insider deal, or some plan to defraud .. hiding behind national defense etc to delay the inevitable just achieves that at taxpayer and national cost.. net.. there is little win , even to the shareholder
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#68
by
FuseUpHereAlone
on 24 May, 2014 00:17
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For example, the two missions we launched within the last week were supported by launch site labor that was charged to this year's capability contract (part of the block buy) even though neither was part of the 36 cores.
I think if your cadence of launches remains roughly the same over the years (10 per year) then that will average out. For example, at the end of this current block buy, some cores may carry over into years beyond 5 years, so they will charged in years also not counted in this batch. So it is fair to still assign an average number of $90 million to $100 million for each launch.
Using an "incremental" number for Atlas V 401 to compare to Falcon 9 v1.1 is not really legitimate because that ignores the capability contract that is already paying your fixed costs. That doesn't appear to assign any amount extra for the capability subsidy to that extra incremental launch.
Or have I misread your explanation?
For the near term decision between SpaceX and ULA, incremental is the right measure. SpaceX can't launch the whole DoD manifest, even if Falcon 9 v1.1 was certified, which it isn't. Since DoD has to keep the whole ULA capability in place, it's stuck with the overhead in any case. If they *do* buy some SpaceX launches, the overhead just shifts to the remaining ULA launches. Musk is exaggerating the potential savings of switching DoD payloads to SpaceX, if any, and I'm pretty sure he's smart enough that's what he's doing.
That isn't consistent with ULA's claim that the block buy saved $4 billion. Ask yourself where that $4 billion in savings from a block buy comes from if most of ULAs costs are fixed and the marginal costs of churning out another rocket are low.
The supposed $4 billion block buy savings implies that with the block buy ULA will be making a huge fixed investment to bring down the marginal cost of each unit, and that that investment won't be worth making if the block buy doesn't happen. So, really, that huge investment should be considered a marginal cost when comparing block buy against no block buy.
You seem to assume that variable costs are insensitive to volume. This is incorrect.
Consider. Suppose you own a bakery, and your biggest customer has concluded that he absolutely most have some undetermined number of pastries in the next five years. He agrees to pay the fixed cost of your building, kitchen, oven and management, even if he orders nothing at all.
Even so, you can still give him a better incremental price per cookie for 5,000 cookies per year than for 500, because your variable cost per cookie is less.
Agreed. The market favors stability. The only thing that the block buy’s $4 billion savings implies is that it will COST $4 billion less than the way the government has been buying launches. This is true in any market, especially one with a huge industrial base required to build a rocket. The block buy allows the industrial base to restart and sustain production efficiently. This involves every level of production, such as keeping ULA’s friction stir welding machines operating on a regular basis; and all the way down to the foundry being able to reuse their specialized crucible they bought to pour Inconel 718 ingot. ULA may not have been very transparent about their cost, but at least they’ve been consistent when they say that it will allow them to stabilize their industrial base.
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#69
by
ChrisWilson68
on 24 May, 2014 00:28
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For example, the two missions we launched within the last week were supported by launch site labor that was charged to this year's capability contract (part of the block buy) even though neither was part of the 36 cores.
I think if your cadence of launches remains roughly the same over the years (10 per year) then that will average out. For example, at the end of this current block buy, some cores may carry over into years beyond 5 years, so they will charged in years also not counted in this batch. So it is fair to still assign an average number of $90 million to $100 million for each launch.
Using an "incremental" number for Atlas V 401 to compare to Falcon 9 v1.1 is not really legitimate because that ignores the capability contract that is already paying your fixed costs. That doesn't appear to assign any amount extra for the capability subsidy to that extra incremental launch.
Or have I misread your explanation?
For the near term decision between SpaceX and ULA, incremental is the right measure. SpaceX can't launch the whole DoD manifest, even if Falcon 9 v1.1 was certified, which it isn't. Since DoD has to keep the whole ULA capability in place, it's stuck with the overhead in any case. If they *do* buy some SpaceX launches, the overhead just shifts to the remaining ULA launches. Musk is exaggerating the potential savings of switching DoD payloads to SpaceX, if any, and I'm pretty sure he's smart enough that's what he's doing.
That isn't consistent with ULA's claim that the block buy saved $4 billion. Ask yourself where that $4 billion in savings from a block buy comes from if most of ULAs costs are fixed and the marginal costs of churning out another rocket are low.
The supposed $4 billion block buy savings implies that with the block buy ULA will be making a huge fixed investment to bring down the marginal cost of each unit, and that that investment won't be worth making if the block buy doesn't happen. So, really, that huge investment should be considered a marginal cost when comparing block buy against no block buy.
You seem to assume that variable costs are insensitive to volume. This is incorrect.
Consider. Suppose you own a bakery, and your biggest customer has concluded that he absolutely most have some undetermined number of pastries in the next five years. He agrees to pay the fixed cost of your building, kitchen, oven and management, even if he orders nothing at all.
Even so, you can still give him a better incremental price per cookie for 5,000 cookies per year than for 500, because your variable cost per cookie is less.
But that's my whole point -- the cost of expanding the bakery is a cost that the government would only have to pay if it buys lots of rockets from ULA. The supposedly low incremental cost when comparing with SpaceX is omitting that cost of expanding the bakery, which wouldn't have to happen if they bought more from SpaceX.
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#70
by
kevin-rf
on 24 May, 2014 00:35
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The other thing it allows them to do with a just in time system is buy the parts from other vendors in lots larger than onies and twoies . They will get a better deal if they buy 36 RL-10's, RS-68's, RD-180's, NK-33's, and all the metal they need to machine and bend up front. If they send the purchase order for all those parts each time they win a contract they not only incur the part cost, but the cost of setting up to make the part, and cost of the PO each time.
I think that is the $4 billion they are saving.
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#71
by
FuseUpHereAlone
on 24 May, 2014 00:36
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For example, the two missions we launched within the last week were supported by launch site labor that was charged to this year's capability contract (part of the block buy) even though neither was part of the 36 cores.
I think if your cadence of launches remains roughly the same over the years (10 per year) then that will average out. For example, at the end of this current block buy, some cores may carry over into years beyond 5 years, so they will charged in years also not counted in this batch. So it is fair to still assign an average number of $90 million to $100 million for each launch.
Using an "incremental" number for Atlas V 401 to compare to Falcon 9 v1.1 is not really legitimate because that ignores the capability contract that is already paying your fixed costs. That doesn't appear to assign any amount extra for the capability subsidy to that extra incremental launch.
Or have I misread your explanation?
For the near term decision between SpaceX and ULA, incremental is the right measure. SpaceX can't launch the whole DoD manifest, even if Falcon 9 v1.1 was certified, which it isn't. Since DoD has to keep the whole ULA capability in place, it's stuck with the overhead in any case. If they *do* buy some SpaceX launches, the overhead just shifts to the remaining ULA launches. Musk is exaggerating the potential savings of switching DoD payloads to SpaceX, if any, and I'm pretty sure he's smart enough that's what he's doing.
That isn't consistent with ULA's claim that the block buy saved $4 billion. Ask yourself where that $4 billion in savings from a block buy comes from if most of ULAs costs are fixed and the marginal costs of churning out another rocket are low.
The supposed $4 billion block buy savings implies that with the block buy ULA will be making a huge fixed investment to bring down the marginal cost of each unit, and that that investment won't be worth making if the block buy doesn't happen. So, really, that huge investment should be considered a marginal cost when comparing block buy against no block buy.
You seem to assume that variable costs are insensitive to volume. This is incorrect.
Consider. Suppose you own a bakery, and your biggest customer has concluded that he absolutely most have some undetermined number of pastries in the next five years. He agrees to pay the fixed cost of your building, kitchen, oven and management, even if he orders nothing at all.
Even so, you can still give him a better incremental price per cookie for 5,000 cookies per year than for 500, because your variable cost per cookie is less.
But that's my whole point -- the cost of expanding the bakery is a cost that the government would only have to pay if it buys lots of rockets from ULA. The supposedly low incremental cost when comparing with SpaceX is omitting that cost of expanding the bakery, which wouldn't have to happen if they bought more from SpaceX.
The bakery is already built; there is no need to invest in more capital. ULA isn't implying that it needs to make investments to bring down the costs of their rockets; they just need to stabilize and more efficiently use the industrial base they already have.
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#72
by
Will
on 24 May, 2014 00:52
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For example, the two missions we launched within the last week were supported by launch site labor that was charged to this year's capability contract (part of the block buy) even though neither was part of the 36 cores.
I think if your cadence of launches remains roughly the same over the years (10 per year) then that will average out. For example, at the end of this current block buy, some cores may carry over into years beyond 5 years, so they will charged in years also not counted in this batch. So it is fair to still assign an average number of $90 million to $100 million for each launch.
Using an "incremental" number for Atlas V 401 to compare to Falcon 9 v1.1 is not really legitimate because that ignores the capability contract that is already paying your fixed costs. That doesn't appear to assign any amount extra for the capability subsidy to that extra incremental launch.
Or have I misread your explanation?
For the near term decision between SpaceX and ULA, incremental is the right measure. SpaceX can't launch the whole DoD manifest, even if Falcon 9 v1.1 was certified, which it isn't. Since DoD has to keep the whole ULA capability in place, it's stuck with the overhead in any case. If they *do* buy some SpaceX launches, the overhead just shifts to the remaining ULA launches. Musk is exaggerating the potential savings of switching DoD payloads to SpaceX, if any, and I'm pretty sure he's smart enough that's what he's doing.
That isn't consistent with ULA's claim that the block buy saved $4 billion. Ask yourself where that $4 billion in savings from a block buy comes from if most of ULAs costs are fixed and the marginal costs of churning out another rocket are low.
The supposed $4 billion block buy savings implies that with the block buy ULA will be making a huge fixed investment to bring down the marginal cost of each unit, and that that investment won't be worth making if the block buy doesn't happen. So, really, that huge investment should be considered a marginal cost when comparing block buy against no block buy.
You seem to assume that variable costs are insensitive to volume. This is incorrect.
Consider. Suppose you own a bakery, and your biggest customer has concluded that he absolutely most have some undetermined number of pastries in the next five years. He agrees to pay the fixed cost of your building, kitchen, oven and management, even if he orders nothing at all.
Even so, you can still give him a better incremental price per cookie for 5,000 cookies per year than for 500, because your variable cost per cookie is less.
But that's my whole point -- the cost of expanding the bakery is a cost that the government would only have to pay if it buys lots of rockets from ULA. The supposedly low incremental cost when comparing with SpaceX is omitting that cost of expanding the bakery, which wouldn't have to happen if they bought more from SpaceX.
You misunderstand. The hypothetical bakery can produce, say, up to 5,000 cookies a year with no investment in additional plant. Additional investment in the facility is not an issue.
Within the production range, even once fixed costs are paid, variable costs depend on volume.If you bake only one cookie a year, the variable, incremental or non-fixed costs will be high, even after the fixed costs are paid. heating up the oven, bringing in a baker for one cookie, and paying retail for your ingredients will be costly, especially if you don't use all of them. For 5,000 cookies a year, your variable costs per cookie will be much less.
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#73
by
clongton
on 24 May, 2014 00:53
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Ok Dr Sowers. Let me ask my question again in a different way (this is my 4th try).
1. If the annual $1 billion capabilities contract goes away, how much will the per-launch cost for DoD payloads increase, on average?
2. Why is ULA entitled to a $1 billion dollar annual capabilities contract for launching DoD payloads and, when also launching DoD payloads, SpaceX is not? That appears to be a real bone of contention here that you keep side-stepping.
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#74
by
Will
on 24 May, 2014 01:43
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Ok Dr Sowers. Let me ask my question again in a different way (this is my 4th try).
1. If the annual $1 billion capabilities contract goes away, how much will the per-launch cost for DoD payloads increase, on average?
2. Why is ULA entitled to a $1 billion dollar annual capabilities contract for launching DoD payloads and, when also launching DoD payloads, SpaceX is not? That appears to be a real bone of contention here that you keep side-stepping.
I'm not Dr. Sowers, but it seems to me that one obvious difference between SpaceX and ULA is that ULA can launch every payload that the DoD wants to launch but SpaceX can't.
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#75
by
kevin-rf
on 24 May, 2014 02:14
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The other is ULA only has one customer, while SpaceX has several and such a contract would require every customer to pay into the capabilities contract, not just the DOD.
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#76
by
RocketGoBoom
on 24 May, 2014 02:37
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Ok Dr Sowers. Let me ask my question again in a different way (this is my 4th try).
1. If the annual $1 billion capabilities contract goes away, how much will the per-launch cost for DoD payloads increase, on average?
2. Why is ULA entitled to a $1 billion dollar annual capabilities contract for launching DoD payloads and, when also launching DoD payloads, SpaceX is not? That appears to be a real bone of contention here that you keep side-stepping.
I'm not Dr. Sowers, but it seems to me that one obvious difference between SpaceX and ULA is that ULA can launch every payload that the DoD wants to launch but SpaceX can't.
So does the capability subsidy go away after Falcon Heavy is certified?
Or is there another type of payload that would still prevent full competition for every launch? Is there anything else on the DOD manifest that is outside the projected capabilities of both Falcon 9 and Falcon Heavy?
I think we all assume that Falcon Heavy will likely be certified within the next 5 years, so is that when there is true head to head competition with no capability subsidy?
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#77
by
RocketGoBoom
on 24 May, 2014 02:39
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The other is ULA only has one customer, while SpaceX has several and such a contract would require every customer to pay into the capabilities contract, not just the DOD.
Most business just call that fixed overhead and just build it into their prices. Nobody is going to insist that SpaceX penalize their commercial customers merely because ULA does not choose to spread their costs over more customers.
The capabilities contract likely dies completely after the current block buy is done. Just my opinion on what is likely to happen.
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#78
by
QuantumG
on 24 May, 2014 02:40
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I believe the ULA argument against Falcon Heavy for GTO payloads is simply that it won't be cheaper.
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#79
by
savuporo
on 24 May, 2014 02:42
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Or is there another type of payload that would still prevent full competition for every launch? Is there anything else on the DOD manifest that is outside the projected capabilities of both Falcon 9 and Falcon Heavy?
I think it's pretty easy to predict USAF answers to this question: yes, and yes, and further details are classified.
