Boeing and the fear of competition
Boeing has indicated that it might shelve its CST-100 manned capsule, despite their recent almost half a billion dollar contract award from NASA.
This possibility illustrates why Boeing is losing market share, not only in space, but in the aviation industry. The article suggests that the NASA contract might not be enough to pay for CST-100, and that Boeing is unsure there is enough private market to make up the difference.
“That’s just for the ISS. That’s kind of the basement,” adds Elbon. More flights than those to the ISS are required he says, and Boeing is cautious about over-committing itself while future revenue streams are unclear.
I say bull hockey.
The NASA subsidy is designed to help them develop the capsule, It will also provide them some financial cushion while they market to others. That they already have an agreement with Bigelow suggests that there are private customers who will buy this manned launch capability. Boeing just has to want to compete to get their business.
Unfortunately, Boeing, like Lockheed Martin and the other old time big aerospace companies, has not had much interest in competing for market share for the past thirty years. Instead, they have been happy to feed off the easy government trough. It doesn’t require much innovation or cost cutting, and it gets them lots of cash for very little work.
Thus, this story, which I suspect was pushed to the media in the time-honored tradition of both government contractors and agencies, to use the press to convince Congress and NASA to pony up more cash for their capsule.
Boeing however is going to find out very soon that there isn’t any more cash available and the government trough is about to run dry. If they don’t compete, they are going to die, because others are going to compete for that business, and leave them in the dust.
One more thing: If I was the NASA administrator and heard these threats from Boeing — after I have just awarded them this contract — I would be on the phone with Boeing’s CEO in an instant, telling him that if he doesn’t deny this story immediately I am going to cancel their contract and offer it to the next competitor on the list. Why should NASA waste one dime on Boeing’s proposal if they are going to abandon it before completion? NASA needs access to space. It doesn’t need companies that aren’t serious about providing it.
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I agree! Blue Origin comes to mind.
I agree that I would want Bolden calling the Boeing CEO on the carpet for those comments, but I think he will wait until after the election, and possibly even until the sequestration issue is settled successfully.
What I think Bolden should being doing is have Gerstenmaier have lunch with Sierra Nevada’s CEO and ask him what they could do if they got $300M or so more funding. If it turns out SNC can get close to what Boeing would have done, that gives them a point of negotiation with Boeing.
We only want Commercial Crew companies that truly committed to the market, not the government money.
In fact the market is considerably larger than just 2 crewed flights a year for a single provider of commercial crew. Boeing must know that.
And this is without adding in a possible commercial space station like Bigelow proposes.
Consider.
CRS – cargo to ISS – needs to be renegotiated shortly for the 2015-2020 period. That’s about 4 flights a year. Add in 2 Crew flights a year starting about the same time, and there are 6 flights a year up for grabs.
These will have to be contested in the next few years.
The contenders are
Orbital—Up cargo only.
SpaceX-Up cargo, Down cargo, crew,
Boeing -Up cargo, Down cargo, crew,
SNC—- Up cargo, Down cargo, crew.
It would not surprise me to see 3 companies wind up with 2 flights a year each of some mix of crew and cargo.
Dropping Orbital would increase the down mass option as well, as only Dragon provides down mass at the moment.
So the “There is only one possible winner of commercial crew” argument mounted by many on the internet seems to me to be patently false. As for Boeings statements, I think Boeing is just doing their normal bullying act on the market – in this case on NASA.
It’s a “Make sure we get 2 flights a year or else,” statement. But Boeing knows the size of the market. They just want to make sure they get a slice.
I should add that Orbital’s capabilities are not certain for the next round. They might possibly choose to upgrade the Cygnus to add down mass. (I think I saw a bit about that somewhere IIRC).
the commercial space is virtually dead http://www.aviationweek.com/Article.aspx?id=/article-xml/asd_09_21_2012_p05-02-498387.xml
That’s not what the article says at all. Unless you’re Mr. Marano, the king of negative comments, who appears to be fanatically against commercial space in any shape or form.
Blue Origin dropped out of Commercial Crew by their own choice. You would therefore have to assume they would decline the honor.
Six flights a year is pathetic.
The economics could change if we consider settlement BEO. Boeing might then quit it’s BS and really start to compete.
I thought I heard talk about upgrading cargo modules like the Cygnus PCM and the ATV too, but I think the economics of it don’t make sense when compared to dedicated spacecraft like the Dragon, CST-100 and Dream Chaser.
In fact I don’t see much of a future for the Cygnus as a cargo carrier if we get two or more crew-capable autonomous spacecraft. If that is the case, I hope OSC decides to use the Cygnus Service Module to offer tug services.
I wonder if Boeing has considered cargo delivery services as part of any potential future demand for the CST-100?
I didn`t hear that. From what I`ve seen they were behind the others and since there was only going to be 3 choices they just opted not to put out effort. Why bother if you know it is a waste time.
You would have to check with them to see if they felt they were “behind”. Absent that i would stand be my original statement.
Boeing and Sierra Nevada both have a big problem in competing on cost with SpaceX. Atlas is probably going to cost at least three times, and perhaps four or more times as much as Falcon 9. Their only hope is that ULA will magically get costs down somehow (a higher flight rate would help) or the government will pressure SpaceX to provide Falcon launches to Dragon competitors.
Curious about those assumed launch numbers. Space X contract for cargo services to ISS is $1.6 Billion for 12 flights ($133,333,333.33/flight) and Space X has talked about $140 Million/flight for crewed missions.
http://www.spacepolicyonline.com/news/another-first-for-the-space-program-first-commercial-spacecraft-joins-international-space-station
Using the Space X quoted figure (as it seems reasonable that a crewed flight will be somewhat more expensive than a cargo mission) that would place the total cost of an Atlas launch of either vehicle between $420 Million – $560 Million.
Is there a source for those numbers that to which you could link?
“If I was the NASA administrator and heard these threats from Boeing — after I have just awarded them this contract — I would be on the phone with Boeing’s CEO in an instant, telling him that if he doesn’t deny this story immediately I am going to cancel their contract and offer it to the next competitor on the list.”
Well, yeah, but… (someone remind me) who’d be the “next” competor from that competition, the Forerunner of the Also-rans? Does that mean that a FULL share would be offered to maybe *Shudder!* ATK/Liberty?, or worse that Excalibur Alma-hoozits?
Given the looming fiscal-fundicide coming in a few months, might I suggest give half (or even a quarter), to SNC and put the rest into the Sequester-Sacrificial Insurance Pot?
I think Blue Origin would be ‘Plan B’ in that scenario…
Blue Origin dropped out of Commercial Crew by their own choice. You would therefore have to assume they would decline the honor.
The established players may have to a skunkworks design to bring down costs. It’s obvious the current designs aren’t going to get there.
I was referring to the cost for the launcher only. Falcon 9 is still about sixty million. You’re comparing apples to eggs (as you often do).
Yes that was the reason I saId total cost.
“Using the Space X quoted figure (as it seems reasonable that a crewed flight will be somewhat more expensive than a cargo mission) that would place the total cost of an Atlas launch of either vehicle between $420 Million – $560 Million.”
Do you have any such documentation?
The topic you responded to was Atlas V costs, not total transportation system cost, but you multiplied the total transportation system cost to try and find out what the Atlas V cost is supposed to be. Notice a flaw in your approach?
If you really want the inside scoop on what an Atlas V costs, ask your buddy Paul Spudis. He says he knows (or at least used to know) what ULA was charging NASA. A recent data point would be NASA’s purchase of two Atlas V 541 launches for $446M:
“The total cost of the GOES-R and GOES-S launch services is approximately $446 million. This estimated cost includes launch service for the Atlas V and additional services under other contracts for payload processing, launch vehicle integration, mission unique launch site ground support and tracking, data and telemetry services. ”
There are still proprietary details the public doesn’t get to see about pricing, so direct comparisons are hard. But there was this article about what Asia Broadcast Satellite (ABS) and Satmex are paying for two Falcon 9 launches in the same general timeframe. The article says that they are paying $130M for two launches, or an average of $65M/launch. Compare that to the $223M for the Atlas V 541, and that’s well over a 3X difference. Of course the crew version of the Atlas V is a 402 – no SRM’s but one additional RL-10 on the second stage – so we still don’t have apples-to-apples, but closer than guessing total crew transportation costs.
Bottom line though – Rand’s estimate looks like it’s in the right ballpark.
The ATK Liberty can’t buy down as much risk with $460M as Sierra Nevada could with it’s Dream Chaser.
I’d take the $460M from Boeing and give most of it to Dream Chaser, then use the rest to continue to buy down risk with Dragon. Dream Chaser is really what NASA seems to want anyways (a horizontal lander with great cross-range capability), so this would be a good excuse to make sure it really happens.
Coastal Ron says: Posted September 24, 2012 at 2:00 PM
“The topic you responded to was Atlas V costs, not total transportation system cost, but you multiplied the total transportation system cost to try and find out what the Atlas V cost is supposed to be. Notice a flaw in your approach?”
No I do not. I asked Mr. SImberg for a source on total cost for an Atlas V launch of either the Boeing or Sierra Nevada payload to which neither he nor you are even attempting a response.
“If you really want the inside scoop on what an Atlas V costs, ask your buddy Paul Spudis. He says he knows (or at least used to know) what ULA was charging NASA. A recent data point would be NASA’s purchase of two Atlas V 541 launches for $446M:”
Thanks for calling Dr. Spudis my “buddy” since I would take it as a compliment, but your numbers would still indicate a per launch cost as $226 Million, not the $420 Million – $560 Million range Mr. Simberg implied. I know missing your estimates by factors ranging from 2 – 2.5 is trivial to you but most sane people would consider it to be worthy of consideration.
your numbers would still indicate a per launch cost as $226 Million, not the $420 Million – $560 Million range Mr. Simberg implied.
I implied nothing of the kind. You mistakenly inferred it. Go back and read what I wrote, this time for comprehension. I was comparing Falcon 9 costs to Atlas costs. Falcon 9 costs $60M. Do the math, and stop blaming me for your inability to read.
The simple question I asked was: “Using the Space X quoted figure (as it seems reasonable that a crewed flight will be somewhat more expensive than a cargo mission) that would place the total cost of an Atlas launch of either vehicle between $420 Million – $560 Million. Is there a source for those numbers that to which you could link?”
Instead of answering the question, you provide personal insults.
I would be forced to assume, therefore, the answer is no.
Your question has absolutely nothing to do with anything I wrote, and there is no basis for it, so I don’t know why I would be expected to answer it.
Your question has absolutely nothing to do with anything I wrote, and there is no basis for it, so I don’t know why I would be expected to answer it.
Joe, it’s amazing how you don’t understand this. Rand talked about Atlas V vs Falcon 9 costs – just the rocket portion of the cost.
You are the one that wants to take rocket + spacecraft full-up costs and compare them using the rocket-only estimate Rand made, and then blame Rand for not agreeing with you. Why are you being so obtuse about this?
You and your buddy Rand (to use you’re terminology) can try to avoid the fact that you have no information to make a head to head comparison of total launch cost as much as you want, but the fact neither of you will provide data to support your positions explains everything.
Integration costs have to be included and ULA does that for their launch contracts. That $54 Million/launch figure that Space X still lists on its website is the equivalent of a crooked used car salesman offering a car for $10,000 then when you go to buy it saying – “Oh, you wanted wheels and an engine with that car, sorry they are extra.” What are you buying for that $54 Million the (in any practical sense useless) launch of a big rocket, for no other reason than you think it is “cool”.
If the total launch price is $140M including Dragon, then obviously the Falcon 9 by itself can’t cost much more than the sixty million that SpaceX quotes. Do you really think it costs SpaceX tens of millions of dollars to integrate a payload?
As Ron asked, why are you being so obtuse about this? Do you see anyone else agreeing with you?
Rand Simberg says:Posted September 25, 2012 at 11:28 AM
Skipping whether or not the Space X $140 Million figure is accurate, you still will not provided details for what you think an equivalent Atlas V Boeing/Sierra Nevada launch would be.
As for whether or not anyone else on this website is agreeing with me, at one point a majority people believed the Earth was (1) Flat, (2) Stationary, (3) The Center of the Universe. Another question (that it is assumed you will not answer), were they correct?
Skipping whether or not the Space X $140 Million figure is accurate, you still will not provided details for what you think an equivalent Atlas V Boeing/Sierra Nevada launch would be
We already know what the Atlas alone is. It’s three to four times the Falcon, which was my only point. So there remains no reason for me to answer a question that has nothing to do with what I wrote, despite your continuing willful misreading it.
Skipping whether or not the Space X $140 Million figure is accurate, you still will not provided details for what you think an equivalent Atlas V Boeing/Sierra Nevada launch would be
Why should I?
We already know what the Atlas alone is. It’s three to four times the Falcon, which was my only point. So there remains no reason for me to answer a question that has nothing to do with what I wrote, despite your continuing willful misreading it.
As for whether or not anyone else on this website is agreeing with me, at one point a majority people believed the Earth was (1) Flat, (2) Stationary, (3) The Center of the Universe. Another question (that it is assumed you will not answer), were they correct?
No.
Not that it has any relevance. Anyone here can follow the conversation. Except, apparently, you.
Rand Simberg says: Posted September 25, 2012 at 11:28 AM
“Do you really think it costs SpaceX tens of millions of dollars to integrate a payload?”
Since you insist on continuing to dig this hole for yourself, I will play this one more round (and then I am done with it).
Yes I “really think it costs SpaceX tens of millions of dollars to integrate a payload”. Here is the evidence (you know actual facts like you can never provide).
http://arstechnica.com/science/2012/07/nasa-awards-four-launches-to-spacex-and-united-launch-alliance/
A Space X contract to launch a relatively uncomplicated applications satellite. Cost, not the Space X advertised $54 Million, but $82 Million.
That would be $28 Million more for what the article describes as services (meaning integration). Last time I checked $28 Million qualifies as “tens of millions of dollars”.
It is also:
– 52% more than the Space X advertised cost.
– 34% of the total contracted actual cost.
Now spin away, call me whatever names you like it will not make the facts go away. I am through with this “discussion”
Others might wonder how someone who claims to be such an expert on Aerospace matters is so unfamiliar with the basic structure of launch costs.
Last time I checked $28 Million qualifies as “tens of millions of dollars”.
It still doesn’t change my point. Three to four times $82M is still about an Atlas cost, sorry.
“Others might wonder how someone who claims to be such an expert on Aerospace matters is so unfamiliar with the basic structure of launch costs.”
Except that you were talking about payload costs being part of the full-up integrated cost, and Rand was talking about pure rocket costs.
As to integration costs, I have no doubt that it doesn’t cost $28M to attach a CST-100 or Dragon to it’s carrier rocket, so the Jason-3 satellite launch contract must have something else that accounts for that cost. If we look at NASA’s press release about the Jason-3 launch contract, they say:
“The total value of the Jason-3 launch service is approximately $82 million. This estimated cost includes the task ordered launch service for the Falcon 9 v1.0, plus additional services under other contracts for payload processing, launch vehicle integration, mission-unique launch site ground support and tracking, data and telemetry services. NASA is the procurement agent for NOAA.”
So while payload processing and launch vehicle integration is part of the contract, the unique part of the contract (and likely biggest cost drivers) are “mission-unique launch site ground support and tracking, data and telemetry services”, which are not launch vehicle related.
So no Joe, SpaceX is not charging everyone $28M extra above and beyond their advertised price to fly payloads on Falcon 9.
Good catch, Ron. So the $82M isn’t SpaceX’s charge, it’s NASA’s total charge to NOAA, including the Falcon price. And once again, Joe falls on his face, comparing apples to eggs. It’s sad that he has so much trouble with this stuff. You’d think that at some point he’d be embarrassed, but I guess not.
But as I said, even if SpaceX did charge $82M for the launch, it’s still in the ball park of my original statement.
Maybe you should have titled this one “3X Everywhere”.