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#20
by
joek
on 01 Apr, 2015 17:58
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Edit per Jim's post below: How much of that "EELV" line item goes to ULA and how much is Air Force program office funding?
I attached a second spreadsheet that eliminates the program support costs; it should more accurately reflect what is received by ULA (e.g., it excludes program support, administration, range). They have shifted some line items around over the years, which makes apples-to-apples comparisons difficult.
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#21
by
Kabloona
on 01 Apr, 2015 21:27
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Edit per Jim's post below: How much of that "EELV" line item goes to ULA and how much is Air Force program office funding?
I attached a second spreadsheet that eliminates the program support costs; it should more accurately reflect what is received by ULA (e.g., it excludes program support, administration, range). They have shifted some line items around over the years, which makes apples-to-apples comparisons difficult.
Thanks joe. So by your accounting, ULA is getting around $370 M per launch.
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#22
by
mkent
on 02 Apr, 2015 00:34
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Attached shows the actual and projected EELV $. Someone is double counting and discounting the cost of those "heritage" cores. Note that quantities are launches not cores.
I like this approach, but I'm not sure the numbers are accurate. They seem to severely discount ULA's flight rate, which averages 11 flights / year. Some of those are Delta II missions, which aren't part of the EELV program, and some of those are commercial and NASA missions, which aren't either. But just counting DoD launches on Delta IV and Atlas V, I get almost twice the flight rate.
Assuming the figures refer to launches and not orders, I get...(see below)...
Note that this is for DoD EELV launches only and does not count NASA, commercial, or Delta II launches. Even if they are orders, the overall multi-year average should be the same, just time-shifted.
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#23
by
joek
on 02 Apr, 2015 01:04
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Thanks joe. So by your accounting, ULA is getting around $370 M per launch.
Yes, I think that is in the right ballpark, although including NRO's ELC contribution may be incorrect; if that is omitted it is closer to $330M. But if you add back mission assurance, some of which gets paid to ULA, it goes back up closer to $350M.
eidt: The launch service numbers in the ELS line cover basic "vanilla" launch services only. Any mission-specific services are budged separately under that program (e.g., GPS, DMS, etc.), which adds costs.
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#24
by
joek
on 02 Apr, 2015 02:22
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I like this approach, but I'm not sure the numbers are accurate. They seem to severely discount ULA's flight rate, which averages 11 flights / year.
This includes only USAF EELV program budget and quantities; anything other than that does not show in this budget. Quantities are the year for which launch services are contracted, which is not necessarily the year of launch (budget money moves before and after launch), which is why there can be such significant year-to-year total unit cost variations.
Other agencies are responsible for budgeting their own EELV launch services and those do not show up in this USAF budget. E.g., NRO and Navy (MUOS). Thus, this does not represent total orders or total costs. NASA flights are not part of the EELV program and use a separate launch services contract (NLS) and separate pricing. Commercial launches are not part of the EELV program. Including NASA or commercial would thus require counting both the launches and the additional costs, and in any case would mix apples and oranges.
I think the best that can be determined from this is an overall figure for the cost of DoD EELV launches over 2-3 years intervals. I wouldn't read too much into an individual year; the trend and longer term averages are more useful.
I have attached an updated chart which omits everything except which the USAF has budgeted for basic launch services and ELC. This should be a lower bound on cost and what is paid to ULA. It does not mission-specific add-on costs, mission assurance (after FY2013), NRO which has a high-priced outlier with the DIV-H (which would increase per-launch price), etc.
Hope that helps.
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#25
by
93143
on 02 Apr, 2015 02:53
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What about
this?
The December 2013 contract modification with ULA, sometimes referred to as a "block buy" contract,
represents a major change from past year-to-year contracting approaches, and buys:
• Production of 35 launch vehicle booster cores over 5 years, from fiscal years
2013 through 2017
• Launch capability for six years, from fiscal years 2014 through 2019
Emphasis added.
This doesn't mesh with what the article says. And honestly $278M for manufacturing a core, exclusive of ELC and launch overhead, doesn't sound right either. I think the article writer may have gotten his wires crossed.
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#26
by
Prober
on 02 Apr, 2015 16:41
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EELV program costs does not equate to money given to ULA. And despite what Spacex has said, the NRO will be funding some sort of ELC for F9 launches to deal with the security.
Yes, this was pointed out before Congress; its in the video
You think SpaceX is going to turn down the money, don't think so.
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#27
by
joek
on 02 Apr, 2015 20:58
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The first question that comes to my mind is this: How the h*ll did the average core become nearly twice as expensive between the current block-buy and the previously bought cores?
...
Short version...
1. In the beginning there was buy-1: prices were below cost (fig 1).
2. Then came buy-2/2.5: prices went up significantly (fig 1), and were projected to increase a *lot* more (fig 2).
3. Then engine prices went up and threatened to explode: RS-68 ~$15M to >$60M; RD-180 $10M to >$35M.
4. Then came the FY13 block buy: prices came down from insane to merely absurd.
Long version...
See attached presentation and GAO report
here (among others).
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#28
by
Kabloona
on 02 Apr, 2015 21:08
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Nice work, joe. You should have been invited to testify in Congress!
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#29
by
joek
on 02 Apr, 2015 21:18
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Thanks, but credit belongs to Mr. Miller and Mr. Kohl. Those charts and the presentation were used for GAO (and maybe Congressional) briefings. A more complete presentation, although heavily redacted, can be found
here.
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#30
by
Misha Vargas
on 03 Apr, 2015 17:03
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Tory Bruno explains costs:
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#31
by
FutureSpaceTourist
on 03 Apr, 2015 18:05
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Ok so to reconcile that with the Motley Fool article would mean that the article both:
1. Confused cores and missions (ie 78 missions not 78 cores) and
2. Included virtually all the 7 years worth of ELC as part of the costs for the new (non heritage) missions
I could believe that but I don't understand what the $11B block buy cost includes! Ie the info graphic doesn't seem consistent with $11B?
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#32
by
kevin-rf
on 03 Apr, 2015 18:24
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I think it is more confusing than that...
The ELC only includes money spent, and doesn't include future spending, but not all the cores have flown yet.
The second block buy went from $128 million to $153.6 million, add in the ELC and you are at $242 million for block buy 2.
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#33
by
joek
on 03 Apr, 2015 23:08
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While I appreciate the effort, Mr. Bruno's info-graphic is a classic example of the "lie of the average" (or marketing run amok). It tells us little or nothing about current and future cost. If anything, this obfuscates current and future costs. ULA can and should do better. If Mr. Bruno is serious about more transparent pricing, then leave the past in the past.
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#34
by
HIP2BSQRE
on 03 Apr, 2015 23:58
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Here is a new article from the GAO --http://www.gao.gov/assets/670/668986.pdf.
Prime contractor: United Launch
Services, LLC
Program office: El Segundo, CA
Funding needed to complete:
R&D: $0.0 million
Procurement: $38,620.1 million
Total funding: $38,620.1 million
Procurement quantity: 94
That is over an average of $400 million.
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#35
by
Coastal Ron
on 03 Apr, 2015 23:59
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The question at hand is the Block Buy, not prior legacy orders. So I would agree that Bruno is throwing those in so that he can "average down" the overall core price.
It's easy to see why just looking at the graphic Bruno provided:
Prior Buy - $6.4B for 50 launches = $128M each/average
Block Buy - $4.3B for 28 launches - $153.6M each/average
So the Block Buy is, on average, 20% more expensive per mission. Now we don't have a mix of what the missions are, so this is a very general calculation, but it shows why Bruno would want to add in the prior buy to lower the overall cost estimates.
The 20% higher cost tracks with what the GAO has been seeing over the past few years, and this general approach of mixing up new orders with old orders is one of the reasons why the GAO has cited ULA for a lack of transparency in pricing.
I've done internal pricing, and rockets are not that complicated from a bill of material standpoint, so it's obvious that ULA just doesn't want to be transparent - choose your own reason.
But the silver lining in all of this is that the Block Buy is likely the last time ULA can get away with this type of price obfuscation, since in the future they will be competing more and more with "another company". Competition is good.
One other thing. Bruno mentions FAR 15, which is "Contracting by Negotiation". From the article:
"SpaceX states its new Falcon Heavy will close this gap. But Bruno stated that his clients are also working within more stringent regulating regimen (“FAR 15,” mentioning towards the “federal acquisition rules”) compared to FAR 12 regimen that governs contracts with SpaceX. He contended that working under FAR 15 contributes to ULA’s costs, and stated when the federal government will grant ULA to operate under FAR 12, then your company’s costs will decline."
From my viewpoint ULA has always had the ability to operate under FAR 12 (i.e. "Acquisition of Commercial Items"), at least to a certain degree, just as ULA has always had the ability to make "block buys" (but chose not to). There is no reason they couldn't have offered standard launch services under FAR 12, and then negotiate under FAR 15 for the additional payload specific handing requirements. I would imagine this is what SpaceX is planning to do, where they would offer their standard Falcon 9 pricing for the launch (~$60M), and negotiate the non-standard customer requirements (up to $30M), which would be the $80-90M figure Shotwell has mentioned.
Well at least this is all moving in the right direction... finally.
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#36
by
joek
on 04 Apr, 2015 02:08
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From my viewpoint ULA has always had the ability to operate under FAR 12 (i.e. "Acquisition of Commercial Items"), at least to a certain degree, just as ULA has always had the ability to make "block buys" (but chose not to). There is no reason they couldn't have offered standard launch services under FAR 12, and then negotiate under FAR 15 for the additional payload specific handing requirements. I would imagine this is what SpaceX is planning to do, where they would offer their standard Falcon 9 pricing for the launch (~$60M), and negotiate the non-standard customer requirements (up to $30M), which would be the $80-90M figure Shotwell has mentioned.
That is the way it nominally worked once-upon-a-time, only then the names were Boeing and Lockheed Martin, not ULA and SpaceX.
Back then, ELC (or more properly "mission assurance") was a per-mission add-on. Pretty much since the formation of ULA, things changed. Mission assurance and assured access morphed into a sole-source non-compete under FAR-15, with EELV launch services (ELS) sole-source firm-fixed price (FFP) and EELV launch capability (ELC) sole-source cost+x.
Since then there has not really any other option. If the DOD wanted a large block-buy in the past,* I'm sure ULA and its suppliers would have obliged (and they did offer, if not begged). ULA could not force a block-buy. It was the DOD's decision not to do so. ULA had little or no voice in the decision.
In the future this is likely to revert to the pre-ULA model. USAF has stated they want to move to not only more competitive acquisution, but also a more per-mission pricing model, including what is currently bundled into ELC--which I think is great. Back to the future!
It would be difficult if not impossible to do otherwise, once SpaceX--or any other competitor--enters the field. The rules will be dictated by FAR, and the DOD must adhere to those rules; SpaceX, ULA or whoever will have little choice in the matter if they want to play.
However, we need to recognize that al of this comes about and is feasible only if there is another competitor such as SpaceX on the field. Whether ULA wants the change or it is forced on them, they cannot do it alone; as long as ULA is the only team on the field, little can or will change.
* edit:prior to FY13; although it was clear that prior cheap buys (not exactly "block buys", but close) were unrealistic as a basis for costing going forward ~CY2010, if not sooner.
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#37
by
mlindner
on 04 Apr, 2015 09:50
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Nasawatch critiques:
https://twitter.com/NASAWatch/status/584113217498144768One question I have after seeing this. Is the 6.9B ELC for all 78 launches or only the new ELC for the block buy?
6.9B ELC seems to assume that 78 launches will be performed over a 6.9 year timespan or an average of 11 launches per year. Is this right?
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#38
by
woods170
on 04 Apr, 2015 11:46
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Nasawatch critiques:
https://twitter.com/NASAWatch/status/584113217498144768
One question I have after seeing this. Is the 6.9B ELC for all 78 launches or only the new ELC for the block buy?
6.9B ELC seems to assume that 78 launches will be performed over a 6.9 year timespan or an average of 11 launches per year. Is this right?
Not it isn't. ULA will not be performing 78 launches in 6.9 years. At least, not military- and NRO-related launches. Even with the record-breaking years 2013 and 2014 included, the average military- and NRO launch-rate for ULA, from 2007 to 2014 is 7.125 launches per year.
Outlook from government sources shows an average of 7 military- and NRO-related launches in 2016 and 2017.
The $6.9B ELC is not for the total of 78 launches, as indicated in the chart. This is verifibly false from USAF yearly budget books.
$6.9B is what the ELC contract value has been from FY2006 to FY2015 (included), or roughly the ELC monies that have been spent on those first 50 launches. The chart presented by Bruno does NOT include the projected ELC monies from FY2016 to the end of the block-buy period.
So, basically, he assumes that from this year forward, there will be no ELC payments. But that is wrong. USAF budget book shows at least $3.1B in ELC monies from FY2016 up to FY2020.
Conveniently overlooking those monies does press down the average cost of a ULA launch quite a bit from $265 Million to $225 Million.
And to add to that: for the FY2016 to FY2020 I have not yet included the NRO ELC monies. If we include those as well, the per-launch average cost goes up to $278 Million.
However, I will add that I find the Nasawatch number of $8.8B for ELC monies between FY2006 and FY2014 to be wrong. $6.1B is a much more likely number for that period. And that goes up to the presented $6.9B when FY2015 is included.
Summarizing: Bruno just threw another piece of disinformation out there by willingly and knowingly overlooking future ELC payments. And he knows it too. Unfortunately, he's counting on the fact that most Americans don't give a d*mn about rocket launches. And those folks that DO know that Bruno is willingly throwing garbage out there, don't make enough noise to get Bruno in serious trouble.
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#39
by
Kabloona
on 04 Apr, 2015 11:48
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While I appreciate the effort, Mr. Bruno's info-graphic is a classic example of the "lie of the average" (or marketing run amok). It tells us little or nothing about current and future cost. If anything, this obfuscates current and future costs. ULA can and should do better. If Mr. Bruno is serious about more transparent pricing, then leave the past in the past.
This is just embarrassing. Did Tory Bruno expect that releasing a misleading graphic on twitter would not result in someone immediately pointing out how wrong it was?
Maybe he should just stop trying to fudge numbers in public and focus instead on getting NGLS built.