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An Assessment of Cost Improvements in the NASA COTS/CRS Program

Some board members might find this paper and presentation interesting that tries to assess the cost improvements in the NASA COTS/CRS program and possible implications for future NASA missions.


NASA Technical Reports Server (NTRS) - An Assessment of Cost Improvements in the NASA COTS - CRS Program and Implications for Future NASA Missions

It’s worth noting that many an internet discussion about the cost of commercial cargo to the ISS have failed to draw the distinctions that make for rigorous analysis, or even trying to account for major factors. Common errors include using the Space Shuttle programs historical average cost per flightd to calculate costs per kg to the ISS at a low yearly flight rate as a multiple of that average, incorrectly treating the Shuttle’s per flight costs as if NASA could purchase those flights by the yard. To make matters worse, other common errors forget that Shuttle upgrades, though not a recurring yearly operational cost, were a large, ever present and continuous capital expense in every yearly budget. Operating a Shuttle meant continually funding Shuttle upgrades. Other typical errors include using the Shuttle’s maximum payload (not cargo) of about 27,500kg to Low Earth Orbit (LEO) at 200km, then comparing against the commercial prices for ISS cargo (not payload) delivered to the actual, higher 400km ISS orbit. With errors like these such analysis are incorrect (though “not even wrong” might also apply.)

The contractual nature of the NASA cargo/crew public private partnerships (Space Act Agreements, Fixed, Milestone Payments and Firm Fixed Price contracts for services) is such that cost over-runs are unlikely to mean more cost to NASA. In contrast, traditional “cost-plus” contracting is process driven, not results driven, paying for effort that may or may not be enough to achieve the goal. By way of analogy, in a firm fixed price contract NASA pays a person to mow the yard, whereas in a cost-plus contract NASA pays a person to try to mow the yard. Costs are difficult to control in the latter, while the former partnership approach assures everyone is pulling the mower in the same direction.

NASA’s relatively low flight rate requirements place a limit on the opportunities for learning and improving any launch or space system. A move to “separate to the maximum practical extent crew from cargo transportation”, like in the Vision for Space Exploration, gives industry the opportunity to improve launch and spacecraft systems faster and more affordably since these are also used for non-NASA customers. As of this date, non-NASA customers routinely use the Falcon 9 launch system (used for ISS cargo, in certification for crew) and some commercial customers use the Atlas V launch system (in certification for crew). The Soyuz vehicle also uses an approach of first proving out modifications on cargo flights before crew flights.62 A growing space sector increasing launch rates can conceivably improve reliability and safety metrics for launch and space systems far beyond what NASA could ever assure mathematically with a system used only for NASA flights.

As of June 25, 2017, SpaceX has launched 20 payloads for private sector customers (excluding NASA and DoD). Most of the return of private sector launches to the US since 2012 appears due to the success of SpaceX attracting these customers. To the extent that many of these customers in the US and around the world would have gone elsewhere if an attractively priced US launcher were not available, a behavior seen in the decade before 2012 (Figure 11), that capital would have gone abroad. As occurs, that money ended up in the US – 20 times. This is about $1.2 billion dollars in payments for launch services that stayed in the US rather than going abroad (at ~$60M per launch). Considering NASA invested only about $140M attributable to the Falcon 9 portion of the COTS program, it is arguable that the US Treasury has already made that initial investment back and then some merely from the taxation of jobs at SpaceX and its suppliers only from non-government economic activity. The over $1 billion (net difference) is US economic activity that would have otherwise mostly gone abroad. This is very different from the economic benefit when NASA is a sole user of a system.

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