NASA official in charge of its manned program denigrates the idea of fixed-price contracts
Jim Free, apparently hostile to commercial space despite
running the NASA manned program dependent on it
Eric Berger on June 16, 2023 wrote up a careful analysis of comments made by NASA official Jim Free, who is in charge of its Artemis manned program, when he appeared on June 7, 2023 before the Aeronautics and Space Engineering Board and Space Studies Board in Washington, DC.
During that appearance, in which Free provided an update on the program’s status, including admitting that the manned lunar landing will not happen in 2025 but in 2026 — something that everyone in the space industry has known for years but NASA had been denying — Berger then noted this further comment by Free:
Oddly, Free also questioned the value of the contract mechanism that NASA used to hire SpaceX and its Starship lander. “The fact is, if they’re not flying on the time they’ve said, it does us no good to have a firm, fixed-price contract other than we’re not paying more,” he said.
Free did this after trying to place the entire blame for the launch delay on SpaceX, made worse by the regulatory delays being imposed on it by the FAA.
Berger than proceeded to outline in great detail why fixed-price contracts work far better than cost-plus contracts — also known widely in the space industry and detailed myself in Capitalism in Space. To sum up, cost-plus contracts produce very little but cost gobs of money, while fixed-price contracts save money while guaranteeing results. He then asked, “What’s going on here?” and answered it as follows:
Free returned to NASA in 2021 to become the agency’s associate administrator for Exploration Systems Development. Essentially this means he is in charge of all the major elements of the Artemis Program, including the SLS rocket, Orion, and Starship lander. He comes from a cost-plus background and appears to be more comfortable with that kind of contracting methodology. He has support for this from the agency’s influential associate administrator, Bob Cabana.
NASA’s approach toward commercial contracts really only gained momentum during the administration of Jim Bridenstine, who championed the idea of the space agency being one of many customers, and buying services rather than committing to long-term cost-plus contracts. But he left in early 2021, before Free’s arrival. Now, Free is saying that fixed-price contracts may not have much value for NASA.
Is the old guard about to exact its revenge on new space?
As my readers know, only last week I provided my own answer to Berger’s last question in my essay, The evidence shows clearly that Biden has worked to squelch Elon Musk and SpaceX. I suggested the push to slow down commercial space and most especially SpaceX was coming from the Biden administration, aided and abetted by the many partisan Democrats who work in the federal bureaucracy, including NASA, who now see Musk as a political enemy who must be squelched.
Berger provides us another aspect of this hostility to commercial space. Many government bureaucrats are like Free. They don’t like change, and they care not a twit whether anything gets accomplished. They simply want the power to control things in a manner they are used to. The hostility to Elon Musk from the Democrats in the Biden administration provides such bureaucrats support.
All in all, it seems to me that the renaissance we have seen in the American space effort in the past ten years — produced entirely by private enterprise — is now at serious risk. The forces in the government that don’t like freedom and independence outside of government control are now coalescing together to fight back. And as long as a Democrat controls the White House there will be nothing to stop this trend.
We might very well see an end to this renaissance, after the election in 2024, an election that almost certainly will be run badly and with a great effort by the Democrats to rig.
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It would be career suicide for Free to blame SLS. It would also support his argument if he could provide a single example of a cost-plus program that came in either on time or under budget, or perhaps even both.
Yes, Musk has become the enemy, but at least he has the means and will to fight back, as long as he can finance the losses on Twitter. I’m not selling off my popcorn stocks just yet.
Let’s do what Herr Doktor One Stone used to call a Thought Experiment . I order a new car from the local dealership. It gets delivered a year late and I get billed 50 percent more by the manufacturer because of his cost over runs. Wouldn’t that be a great system? Shouldn’t all business be conducted that way?
Governments job is not to either tell the truth or to do what is the most efficient.
Governments job and those who populate it are there to spend as much of other peoples money as they possibly can and have that money redistributed into the economy and congressional districts and to the many contractors and their bank accounts and in turn their contributions to who they are working “closely with” in the Political Realm.
Space X is a very different animal, it actually has to produce a working product, offer a competitive price AND be profitable.
The first model does serve a purpose in the initial years of developing big things like a space program. But that political driven model i$ difficult to let go of once a real competitor arrives on the scene.
I assume that there is some significant intellectual and facilities infrastructure that needs to be maintained similar to the university system where research and development is done but does not necessarily produce a profitable product.
“The fact is, if they’re not flying on the time they’ve said, it does us no good to have a firm, fixed-price contract other than we’re not paying more,”
So, in one sentence, he describes the primary benefit of a fixed-cost contract, while denying that it is a benefit. It’s somehow better to pay for non-performance? Only someone completely institutionalized would even entertain the thought. Jimbo needs to be shown the door with a quickness.
”It would be career suicide for Free to blame SLS.“
Why would he blame SLS? The delay to Artemis 2 is caused by Orion, not SLS. The delays to Artemis 3 and 4 are caused by Starship, not SLS.
mkent: This entire program, including SLS and Orion, was first supposed to land humans on the Moon in 2015. Then 2017. Then 2018. Then 2020. Then 2021. Then 2024.
All those delays were announced long before SpaceX got the Starship lunar landing contract. To make believe SLS was not part of the problem is making believe some of the problem didn’t exist.
”This entire program, including SLS and Orion, was first supposed to land humans on the Moon in 2015. Then 2017. Then 2018. Then 2020. Then 2021. Then 2024.”
Oh my goodness, no. The first landing of the Artemis program was to be in 2028. President Trump unilaterally moved it up to 2024, but that never had the buy-in from Congress.
Three separate development issues on SLS related to friction stir welding caused a three-year delay to the launch of Artemis 1. But those SLS development issues have been solved, and the pacing items for the launch of Artemis 2, 3, and 4 are Orion, Starship, and Starship, respectively.
Given their Rube Goldbergeque mission architecture,, we almost definitely won’t have a landing till 2028. 2030 is more likely. Like the ISS, international partners have been brought in to make it more difficult to cancel the program. Very few of the people involved seems to seriously want to go to the moon. NASA wants something to do. The politicians want the jobs in their districts. Spacex wants the money to keep Starship going. Musk had always focused on Mars. The FAA wants to protect and expand their bureaucratic turf..
As for Biden’s administration, it likely has little to do with it.. You could have the most ardent libertarian in the White House and little would change, unless he was very careful with who he appoints to key positions right after his election.. Even then, it would be an uphill battle. He would have to use a lot of political capital in the fight. It’s a bit of an oversimplification, but the relevant agencies and any interested congressman are the ones to watch here. Those are the players that control actual policy. If someone sues, then the courts come in as well. People you vote for have little influence here, unless you live in a few key stares or congressional districts. In that case, you will be outvoted by those who simply want more money coming to town. It’s sad but it’s the truth. That’s why it is so hard to cancel almost any government program. Special interests beat ideology 99% of the time.
We all know that the moon is just a dumb rock we can land on anytime we decide to actually land on it.
It’s not the only dumb rock in the room.
It will be interesting to see which major hires him when he retires from NASA. This sounds like battlespace preparation for his post-government employment, virtue signaling.
The original mission architecture for Artemis was ridiculously expensive for the actual explorations achieved, and was thus vulnerable to loss of political support and cancellation, like the previous NASA efforts.
SpaceX has become involved relatively lately, after the potential reuse of its huge vehicles gave NASA a way to save face by appearing to use the products of its mismanagement in “starring roles”, while SpaceX vehicles actually provided most of the value. Nobody should be fooled.
Ps. Existing production Falcon Heavy rockets will perform the lion’s share of lifting the components of the Lunar Gateway, allowing the once-per-year SLS / Orion to move the Astronauts to lunar orbit and back to Earth.
When can we start building the Star Bases and Deep Space Stations?
mkent wrote: “The first landing of the Artemis program was to be in 2028. President Trump unilaterally moved it up to 2024, but that never had the buy-in from Congress.”
This is true, but the 2015 launch date was not to land on the Moon but to launch in preparation for NASA to do manned missions to asteroids or to an asteroid boulder brought to lunar orbit, depending upon which year you were in at the time, prior to 2015.
The delay that is being blamed on Orion is because of a money-saving decision to reuse some of Orion’s parts. Money may be saved by not buying new parts, but the task of retrieving those parts and incorporating them into the next mission takes time, during which fixed costs accumulate. The net result is that the Artemis launch cadence is lower and overall costs are higher. Something we get from cost-plus projects.
As we know, “Starship and Starship, respectively,” have been intentionally slowed by government, so it is the government making its own prophecy come true. This is not the fault of a cost-plus program, nor is it the fault of the SpaceX vendor. It is the fault of the very same government that complains about the problem.
The intensional delay of Starship gives Free and others a perfect excuse to blame fixed-price contracts while they ignore the costs and delays of cost-plus contracts, such as the Webb Telescope. Much of the cost overrun of the Orion spacecraft was due to the delay of SLS itself, as an army of fixed cost administrators and bean counters remained on payroll and as fixed cost facilities added to the overall expense year after year. These days, we are seeing the Nancy Grace Roman Space Telescope increase in cost and slip in schedule — the main feature of the cost-plus contract system.
How much science is not done because cost-plus contracts eat up the money that would otherwise go to that science, which is now forever lost?
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Ray Van Dune wrote: “The original mission architecture for Artemis was ridiculously expensive for the actual explorations achieved, and was thus vulnerable to loss of political support and cancellation, like the previous NASA efforts.”
Taking inflation into account, the cost of Artemis is similar per mission as it was for Apollo, so we could expect similar vulnerability of cancellation. As a percentage of national budget, the cost for Artemis is less, so we should expect less vulnerability of cancellation.
Free? He looks nothing like Inman
They don’t like change, and they care not a twit whether anything gets accomplished. They simply want the power to control things in a manner they are used to.
And here we see a superb example of Pournelle’s Iron Law of Bureaucracy in action: “In any bureaucracy, the people devoted to the benefit of the bureaucracy itself always get in control and those dedicated to the goals that the bureaucracy is supposed to accomplish have less and less influence, and sometimes are eliminated entirely.”
Pournelle, of course, was fully aware of just how deeply entrenched his Iron Law was at NASA as far back as the 1970’s.
Whether the SpaceX contract is fixed-price or cost-plus, the FAA and other government agencies would still be delaying its Starship development in order to punish the administration’s enemies.
From the Ars Technica article:
If I understand this correctly, SpaceX is only seven or eight months into the funding of the development phase, but Free is already complaining that it is the fixed-cost method that is delaying the end product, not the extremely late award of the contract or the delay from the lawsuit. We can only wonder how Free thinks that a cost-plus contract that was awarded so late would be able to be completed any faster.
I am wondering when Free had returned to NASA. Was it in time for him to sabotage the award to SpaceX so that the other companies would be likely to file a lawsuit that would delay the start of work on the lunar lander?
Wouldn’t Blue Origin have filed its delaying lawsuit even if the contract were cost-plus? So, really, this delay is not the result of a specific funding method but a result of the traditions of government contractors in general when they lose a contract bid.
Is Free next going to complain about the space suits, or is he only piling on the administration’s attack on SpaceX? The new fixed price contract for the lunar space suits are also late in the schedule, but that was because the cost plus contract came up with nothing — yet another glowing example that shows the benefit of cost-plus contracts.
Government bureaucracies turn themselves into empires by spending more money, not by saving taxpayer money. That is where the heart of any government agency is. These days, however, the U.S. government’s heart is also in rewarding its friends and punishing its enemies.