NASA CRS2 Contract Award Announcement - Jan 14, 2016

[Oli]

SpaceX is the "dinosaur" now, so it can ask a higher price. Not surprising at all.

[Robotbeat]

SpaceX is the "dinosaur" now, so it can ask a higher price. Not surprising at all.

Orbital is also a "dinosaur." It's just that their volume has expanded and they can offer a lower price IF you're just considering pressurized downmass. Not everything has to fit a certain narrative.

[robertross]

Since there is no mention of it being optional or at extra cost, this might indeed mean an all-SD fleet.

As yg1968 noted, the source selection references "accelerated cargo return," which likely requires end of mission near KSC (either at the SLF or LZ-1).  A couple of quotes from Mr. Gerstenmaier's statement:

"However, I noted that for one of the two missions the accelerated cargo return is an option that would require additional cost."

"Sierra Nevada and SpaceX also provide accelerated return, although this is at additional cost for one of SpaceX’s two missions."

That's a good call.

I would assume that SpaceX would have to contract out a ship in the area to retrieve the Dragon capsule & handle the returning cargo with supplied power systems (cryo samples, for instance). That would likely be the added cost.

[rayleighscatter]

SpaceX is the "dinosaur" now, so it can ask a higher price. Not surprising at all.

Orbital is also a "dinosaur." It's just that their volume has expanded and they can offer a lower price IF you're just considering pressurized downmass. Not everything has to fit a certain narrative.

OA's financials also made it seem that their program was amortized over the course of CRS1. So while they still have to modify their LV they have nowhere near the startup program costs like before, so they can greatly reduce their bid. SpaceX's financials aren't public but it's possible they are amortizing over a longer period which allowed them to make a very aggressive bid for CRS-1 but doesn't allow for reduced rates for follow-on contracts. Purely speculation though.

[ChrisWilson68]

Since there is no mention of it being optional or at extra cost, this might indeed mean an all-SD fleet.

As yg1968 noted, the source selection references "accelerated cargo return," which likely requires end of mission near KSC (either at the SLF or LZ-1).  A couple of quotes from Mr. Gerstenmaier's statement:

"However, I noted that for one of the two missions the accelerated cargo return is an option that would require additional cost."

"Sierra Nevada and SpaceX also provide accelerated return, although this is at additional cost for one of SpaceX’s two missions."

That's a good call.

I would assume that SpaceX would have to contract out a ship in the area to retrieve the Dragon capsule & handle the returning cargo with supplied power systems (cryo samples, for instance). That would likely be the added cost.

I think the accelerated cargo return option is to use a Dragon 2 and land propulsively on land instead of in the water.  The additional cost would be Dragon 2 versus Dragon 1.

[AnalogMan]

Does anyone happen to have the source selection document/s for CRS1? I was trying to find them for comparison, but so far haven't been able to.

I've never seen it in the public domain (that's not to say that it isn't out there somewhere though).  However, if you have L2 access then see this thread:
http://forum.nasaspaceflight.com/index.php?topic=15518.0

[ChrisWilson68]

SpaceX is the "dinosaur" now, so it can ask a higher price. Not surprising at all.

Orbital is also a "dinosaur." It's just that their volume has expanded and they can offer a lower price IF you're just considering pressurized downmass. Not everything has to fit a certain narrative.

OA's financials also made it seem that their program was amortized over the course of CRS1. So while they still have to modify their LV they have nowhere near the startup program costs like before, so they can greatly reduce their bid. SpaceX's financials aren't public but it's possible they are amortizing over a longer period which allowed them to make a very aggressive bid for CRS-1 but doesn't allow for reduced rates for follow-on contracts. Purely speculation though.

There seems to be an implicit assumption in this post ("doesn't allow for", etc.) and various others in this thread that SpaceX or some other company was bidding the minimum they could based on their own costs.

These are businesses.  If they're competently run, they will have bid the maximum they think that they can get away with and still get the contract.

They all saw that with CCtCap and CRS NASA chose more than one provider and split the business roughly equally.  So, there's not really an incentive to bid lower than the other winners, just low enough to be one of the winners.

Even if SpaceX's own costs are 1/10th of the competition's, they should still bid about the same amount as the competition, given the circumstances.

[rayleighscatter]

Big government contracts can be a little funny though. While there is an acceptable amount of leeway and margin of error you can't just charge the government as much as you think they will pay. Contracts are roughly based on company history and industry standards and if they exceed these a federal accountant will look into them to see if there's a legitimate reason. Even in a sole-source contract a company can't just stick on a $500M "you have no alternative" surcharge.

[Robotbeat]

The rules are different here. CRS is specifically designed to have multiple real bidders so that there is no way for someone to just put a huge, expensive bid out there and have the government forced to accept it. but if a company is able to be much more efficient than others, then they can make more than the "usual" profit. It's not cost-plus where being more efficient really doesn't benefit you.

[Zed_Noir]

Interesting. From page 14/22

...
SpaceX also has a launch-on-need capability. Although this is an option that comes at addotional cost.
...

What exactly does launch-on-need meant?

[rpapo]

Interesting. From page 14/22

...
SpaceX also has a launch-on-need capability. Although this is an option that comes at addotional cost.
...

What exactly does launch-on-need meant?

Isn't that nothing more than an option to go to the head of the line?  To get somebody else's core assigned to you to get something launched quicker in an emergency?  I find it hard to imagine (yet) being able to launch something unexpected in less than a few weeks, setting aside the orbital mechanics.  Even to do two weeks (the current HIF turnaround?) you would need to have spares sitting around for a whole rocket and a Dragon.  Do we have any idea how long a whole Falcon could sit on the shelf, even if shrink-wrapped against the Florida environment?  Keep in mind some of the items recently revealed on L2.

[MP99]

Hopefully, SpaceX will get to the stage where they have recovered a bunch of S1's, and they are available to fly future missions.

This may be the stock from which launch-on-need will be offered. Requires an S2, of course.

Cheers, Martin

[Hauerg]

Interesting. From page 14/22

...
SpaceX also has a launch-on-need capability. Although this is an option that comes at addotional cost.
...

What exactly does launch-on-need meant?

Answering this without having access to the RFP would mean speculating.
And we don't do that here.   

[AnalogMan]

Interesting. From page 14/22

...
SpaceX also has a launch-on-need capability. Although this is an option that comes at addotional cost.
...

What exactly does launch-on-need meant?

These are the words from the RFP regarding launch-on-need (this was an optional capability):

2.6 LAUNCH ON NEED (LON)

"A Launch On Need (LON) capability should be provided in the event there is an interruption in the provision of cargo services from any of the providers through the life of the contract.

The Contractor should meet the following technical capabilities to satisfy LON:

(a)   Able to be called up after the Contractor’s initial CRS2 flight,

(b)   Able to launch within two months after launch of a planned CRS2 mission,

(c)   Accommodate up to the full complement of pressurized cargo that had been planned for the next mission,
       as applicable to the standard mission, including standard powered payloads and standard late load for
       launch and return,

(d)   The next planned launch following a LON can be as early as 2 months from completion of the LON mission,
 
(e)   In any 12 month period, accommodate one (1) LON mission in addition to the planned flight rate."   

Page 85-86 of http://prod.nais.nasa.gov/eps/eps_data/160726-SOL-001-003.docx

[yg1968]

I wonder if the price issue was one of rounding problem. Both DC and Cygnus are able to do 7,500kg of pressurized with 2 missions. But SpaceX could need 3 missions. If they bid an average 180M/mission, that's 72k usd/kg. That's 30% above Cygnus.

You might be on to something. If your assumption is correct that SpaceX bid $180M per mission, it would then mean that each DC flight would essentially cost $270M per mission ($180Mx5000kg/3310kg) which is what you would expect (according to the Source Selection Statement, SpaceX was essentially tied with SNC on prices for bringing up 7500 kg of pressurized upmass and 1000 kg of unpressurized upmass to the ISS).

Orbital ATK's prices are already known and they are $200M per mission for Antares-Cygnus and $250M per mission for Atlas-Cygnus.

Based on the assumptions above, the prices per kg for pressurized upmass would be $54,000 per kg for SpaceX (180M/3300kg), $54,000 per kg for DC ($270M/5000kg) and 53,000 kg for Antares-Cygnus or $56,604 for Atlas-Cygnus.

Based on these same assumptions, the total contract price would be $1.1B for SpaceX (6 x $180M), $1.6B for SNC (6 x $270M) and between $1.2B and $1.5B for Orbital ATK.

[guckyfan]

SpaceX has offered both Cargo Dragon 1 and Dragon 2 with docking port. We do not know what the price difference is and which combination of both are in the price/kg calculation.

[Robotbeat]

I wonder if the price issue was one of rounding problem. Both DC and Cygnus are able to do 7,500kg of pressurized with 2 missions. But SpaceX could need 3 missions. If they bid an average 180M/mission, that's 72k usd/kg. That's 30% above Cygnus.

You might be on to something. If your assumption is correct that SpaceX bid $180M per mission, it would then mean that each DC flight would essentially cost $270M per mission ($180Mx5000kg/3310kg) which is what you would expect (according to the Source Selection Statement, SpaceX was essentially tied with SNC on prices for bringing up 7500 kg of pressurized upmass and 1000 kg of unpressurized upmass to the ISS).

Orbital ATK's prices are already known and they are $200M per mission for Antares-Cygnus and $250M per mission for Atlas-Cygnus.

Based on the assumptions above, the prices per kg for pressurized upmass would be $54,000 per kg for SpaceX (180M/3300kg), $54,000 per kg for DC ($270M/5000kg) and 53,000 kg for Antares-Cygnus or $56,604 for Atlas-Cygnus.

Based on these same assumptions, the total contract price would be $1.1B for SpaceX (6 x $180M), $1.6B for SNC (6 x $270M) and between $1.2B and $1.5B for Orbital ATK.

Everyone looks very close in price in your analysis.

[rayleighscatter]

I wonder if the price issue was one of rounding problem. Both DC and Cygnus are able to do 7,500kg of pressurized with 2 missions. But SpaceX could need 3 missions. If they bid an average 180M/mission, that's 72k usd/kg. That's 30% above Cygnus.

You might be on to something. If your assumption is correct that SpaceX bid $180M per mission, it would then mean that each DC flight would essentially cost $270M per mission ($180Mx5000kg/3310kg) which is what you would expect (according to the Source Selection Statement, SpaceX was essentially tied with SNC on prices for bringing up 7500 kg of pressurized upmass and 1000 kg of unpressurized upmass to the ISS).

Orbital ATK's prices are already known and they are $200M per mission for Antares-Cygnus and $250M per mission for Atlas-Cygnus.

Based on the assumptions above, the prices per kg for pressurized upmass would be $54,000 per kg for SpaceX (180M/3300kg), $54,000 per kg for DC ($270M/5000kg) and 53,000 kg for Antares-Cygnus or $56,604 for Atlas-Cygnus.

Based on these same assumptions, the total contract price would be $1.1B for SpaceX (6 x $180M), $1.6B for SNC (6 x $270M) and between $1.2B and $1.5B for Orbital ATK.

Everyone looks very close in price in your analysis.

I wound up with different numbers using the same mission cost estimates. Since NASA was looking at getting 45,000kg up per offeror (7,500kg per year 2018-2024)

SX would take 14 missions at 180M each coming to $2.52B for the term
OA would take 12 missions at 200M each coming to $2.4B for the term
SNC would take 9 missions at 270M each coming to $2.43B for the term

Which incidentally if they manage these payloads with each mission it will leave an additional 14,000kg of material to be flown after the 6 fixed missions per company.

[AncientU]

These are remarkably consistent numbers.
Good show!

[yg1968]

I wonder if the price issue was one of rounding problem. Both DC and Cygnus are able to do 7,500kg of pressurized with 2 missions. But SpaceX could need 3 missions. If they bid an average 180M/mission, that's 72k usd/kg. That's 30% above Cygnus.

You might be on to something. If your assumption is correct that SpaceX bid $180M per mission, it would then mean that each DC flight would essentially cost $270M per mission ($180Mx5000kg/3310kg) which is what you would expect (according to the Source Selection Statement, SpaceX was essentially tied with SNC on prices for bringing up 7500 kg of pressurized upmass and 1000 kg of unpressurized upmass to the ISS).

Orbital ATK's prices are already known and they are $200M per mission for Antares-Cygnus and $250M per mission for Atlas-Cygnus.

Based on the assumptions above, the prices per kg for pressurized upmass would be $54,000 per kg for SpaceX (180M/3300kg), $54,000 per kg for DC ($270M/5000kg) and 53,000 kg for Antares-Cygnus or $56,604 for Atlas-Cygnus.

Based on these same assumptions, the total contract price would be $1.1B for SpaceX (6 x $180M), $1.6B for SNC (6 x $270M) and between $1.2B and $1.5B for Orbital ATK.

Everyone looks very close in price in your analysis.

Yes except that because of the rounding problem that Buldusi mentionned, Orbital ATK would come out on top in the evaluation because it only needs two flights to bring 7500 kg of upmass for either $400M or $500M ($200M x 2 = $400M or $250M x 2 = $500M), DC comes in second place with $540M for 2 flights and SpaceX comes in tied with DC at $540M (3 flights x $180M).