NASA to give Boeing cost-plus contract for 10 more SLS rockets
The boondoggle never ends! NASA is now planning to purchase ten more SLS rockets from Boeing, but it appears it plans to do so under a cost-plus contract, where the prices will never be fixed and the agency, not Boeing, will pay for any cost increases, plus 10 percent.
On Wednesday, NASA announced that it is negotiating a contract with Boeing to purchase up to 10 SLS core stages. The news release does not mention costs—NASA and Boeing have never been transparent about costs, but certainly production and operations cost for a single SLS launch will be well north of $1 billion. It also does not mention the mechanism of the contract.
A spokesperson for the agency, Kathryn Hambleton, told Ars that terms of the contract were not finalized yet. “NASA anticipates the contract will be a hybrid of cost-plus-incentive-fee and cost-plus-award-fee, potentially transitioning to firm-fixed-price,” she said. “The cost incentives are designed to reduce costs during early production to enable the lowest possible unit prices for the later fixed-price missions.” [emphasis mine]
If anything provides us a perfect example of the utter corruption and waste inherent in the present leadership within NASA and Congress, it is this deal. Cost-plus contracts were created in the 1960s to allow companies to build new and revolutionary things for the government, such as the missiles and capsules it needed then for the cold war and the space race. Today, rockets like SLS are hardly revolutionary or new, and to give Boeing a cost-plus contract to buy ten more rockets, essentially a blank check for the company, is unconscionable.
While I personally think all cost-plus contracts are corrupt, I can understand the arguemnet for them for the first development contract. This contract however is for the purchase of ten more rockets that Boeing has supposedly already figured out how to build. In essence NASA is just buying some rockets off the shelf. Cost-plus is entirely inappropriate for this purchase.
Worse, this announcement also illustrates the dishonest partnership between NASA, Boeing, and Congress. It is a maneuver by NASA and Boeing to force Congress to fund these extra rockets. At this moment Congress has not yet appropriated this money for more SLS rockets. The contract is basically NASA and Boeing’s fantasy of what they want to happen. This announcement thus signals to Congress where they want the pork spent, and our corrupt lawmakers, from both parties, are going to read that signal and are going to quickly follow through with the cash.
Sadly, I now fully expect Congress to go along. Welcome to the lumbering wasteful modern American empire, corrupt to the core.
On Christmas Eve 1968 three Americans became the first humans to visit another world. What they did to celebrate was unexpected and profound, and will be remembered throughout all human history. Genesis: the Story of Apollo 8, Robert Zimmerman's classic history of humanity's first journey to another world, tells that story, and it is now available as both an ebook and an audiobook, both with a foreword by Valerie Anders and a new introduction by Robert Zimmerman.
The print edition can be purchased at Amazon. from any other book seller, or direct from my ebook publisher, ebookit.
The ebook is available everywhere for $5.99 (before discount) at amazon, or direct from my ebook publisher, ebookit. If you buy it from ebookit you don't support the big tech companies and the author gets a bigger cut much sooner.
The audiobook is also available at all these vendors, and is also free with a 30-day trial membership to Audible.
"Not simply about one mission, [Genesis] is also the history of America's quest for the moon... Zimmerman has done a masterful job of tying disparate events together into a solid account of one of America's greatest human triumphs."--San Antonio Express-News
The boondoggle never ends! NASA is now planning to purchase ten more SLS rockets from Boeing, but it appears it plans to do so under a cost-plus contract, where the prices will never be fixed and the agency, not Boeing, will pay for any cost increases, plus 10 percent.
On Wednesday, NASA announced that it is negotiating a contract with Boeing to purchase up to 10 SLS core stages. The news release does not mention costs—NASA and Boeing have never been transparent about costs, but certainly production and operations cost for a single SLS launch will be well north of $1 billion. It also does not mention the mechanism of the contract.
A spokesperson for the agency, Kathryn Hambleton, told Ars that terms of the contract were not finalized yet. “NASA anticipates the contract will be a hybrid of cost-plus-incentive-fee and cost-plus-award-fee, potentially transitioning to firm-fixed-price,” she said. “The cost incentives are designed to reduce costs during early production to enable the lowest possible unit prices for the later fixed-price missions.” [emphasis mine]
If anything provides us a perfect example of the utter corruption and waste inherent in the present leadership within NASA and Congress, it is this deal. Cost-plus contracts were created in the 1960s to allow companies to build new and revolutionary things for the government, such as the missiles and capsules it needed then for the cold war and the space race. Today, rockets like SLS are hardly revolutionary or new, and to give Boeing a cost-plus contract to buy ten more rockets, essentially a blank check for the company, is unconscionable.
While I personally think all cost-plus contracts are corrupt, I can understand the arguemnet for them for the first development contract. This contract however is for the purchase of ten more rockets that Boeing has supposedly already figured out how to build. In essence NASA is just buying some rockets off the shelf. Cost-plus is entirely inappropriate for this purchase.
Worse, this announcement also illustrates the dishonest partnership between NASA, Boeing, and Congress. It is a maneuver by NASA and Boeing to force Congress to fund these extra rockets. At this moment Congress has not yet appropriated this money for more SLS rockets. The contract is basically NASA and Boeing’s fantasy of what they want to happen. This announcement thus signals to Congress where they want the pork spent, and our corrupt lawmakers, from both parties, are going to read that signal and are going to quickly follow through with the cash.
Sadly, I now fully expect Congress to go along. Welcome to the lumbering wasteful modern American empire, corrupt to the core.
On Christmas Eve 1968 three Americans became the first humans to visit another world. What they did to celebrate was unexpected and profound, and will be remembered throughout all human history. Genesis: the Story of Apollo 8, Robert Zimmerman's classic history of humanity's first journey to another world, tells that story, and it is now available as both an ebook and an audiobook, both with a foreword by Valerie Anders and a new introduction by Robert Zimmerman.
The print edition can be purchased at Amazon. from any other book seller, or direct from my ebook publisher, ebookit. The ebook is available everywhere for $5.99 (before discount) at amazon, or direct from my ebook publisher, ebookit. If you buy it from ebookit you don't support the big tech companies and the author gets a bigger cut much sooner.
The audiobook is also available at all these vendors, and is also free with a 30-day trial membership to Audible.
"Not simply about one mission, [Genesis] is also the history of America's quest for the moon... Zimmerman has done a masterful job of tying disparate events together into a solid account of one of America's greatest human triumphs."--San Antonio Express-News
I’m sure they’ll make great lawn ornaments.
At this point I kind of think NASA should be dissolved, with science going to the NSF or other organizations and defense going to darpa / space force, each of which should be free to use whatever launch vehicles they want. But then these monsters never seem to die.
It’s a clever way to provide an indemnity to Boeing for SpaceX’s success. Look at the purchase contract — I’m sure there’s a generous cancellation clause. That way, when the first Starship lands on the Moon and the public clamors to cancel SLS altogether, Boeing will still get their cash.
This could well be the moment the paradigm shifts from government’s dominance in space to the transition to non-government parties.
The upside is a lot of museums will get their hands on unflown flight hardware.
Robert,
Do you think this is in exchange for Congress approving Artemis funding?
From the article: “Occasionally, the US government needs something exceptionally difficult, complex, and unprecedented to be built. In those cases, with technical challenges all but certain to arise, the government pays a contractor the entire value of the development costs, plus a fee—often 10 percent.”
But, wait. The SLS engine already exists, and the tanks of the first stage were to be a modification of the Shuttle External Tank. Where is the exceptional difficulty and unprecedented design? The upper stage isn’t some new concept, it is just developing another upper stage. These are some of the reasons why we are flabbergasted at how long it is taking to develop SLS.
I can see using cost-plus-incentives on the next two SLS rockets, while Boeing works out a production line, but then the manufacturing quirks should all be worked out and each one be close to as inexpensive as they will get. Ten rockets on a cost plus basis is too much.
““SLS is the only rocket powerful enough to send Orion, astronauts and supplies to the Moon on a single mission, and no other rocket in production today can send as much cargo to deep space as the Space Launch System rocket,” John Honeycutt, NASA’s SLS program manager, said”
It looks like NASA is putting using single missions higher in the priority list than getting the job done in a timely manner. SpaceX has chosen the reverse as its priority, getting to Mars using multiple launches in order to do the job sooner rather than later. It isn’t as though America’s rockets are as unreliable as they were in 1957. We have learned a lot about rocketry in the last six decades. Even with Apollo, we broke up the mission into two parts, one landed on the Moon while the other orbited. That saved a lot in terms of rocket power, budget, and schedule. We now know that we can do the same job — a better job — with Falcon 9s and Falcon Heavies. So what’s up with NASA?
I’ll tell you what’s up. Congress is up, that’s what. Congress demanded the SLS, and NASA is delivering, as is their job. NASA is not the problem, here, Congress is. Congress wanted their toy, and now they are getting it. Unfortunately, We the People are the ones paying for the toy, even though SLS’s mission can be done by less expensive, existing, operational hardware. All that we are really missing for a manned Moon landing is a lander, and Blue Origin is willing to make that.
NASA, in 1962, was creative in coming up with the mother-ship/daughter-ship concept (lunar orbit rendezvous), keeping the Command-Service Module in lunar orbit while the Lunar Module descended to the Moon. These days, NASA is limited in its ability to be imaginative due to Congress’s insistence upon having and using SLS. Congress even had to direct NASA to misuse an SLS for use with Europa Clipper.
Despite what Honeycutt said, above, SLS still needs something more, because it is not powerful enough on its own to land on the Moon and come back. That is why the (F)LOP-Gateway is needed, and why a second rocket launch with the lander is needed. We might as well use the existing, operational, inexpensive Falcons.
Edward: Do not absolve NASA or the big contractors from some blame. They are playing this game as well, doing whatever they can to make it easier for Congress to fund them.
We should also not absolve the voters, who for decades have chosen local pork over wise policy.
It is all disgusting, but it appears it is now par for the course. Our country is dying, and we are all to blame.
Ahh, no. That’s a cost-plus-fixed-percentage contract, which are illegal under the FARs. At worst it will be a cost-plus-fixed-fee contract, where the fee is fixed and will *not* increase as costs increase. Under a cost-plus-incentive-fee contract, the fee will go *down* as costs increase. Even the part you quoted says that the contract is likely to transition from cost-plus-incentive-fee to firm, fixed-price for the later rockets.
If you read the text that Bob quoted, that’s what NASA intends to do. It may not be two rockets under cost-plus, or maybe it will, but it won’t be all ten either. (I predict five or six.)
I won’t even disagree with you here. This whole contract shouldn’t even exist at all, but if it exists, it should be firm, fixed-price.
However, that’s not how things are done in aerospace. *Almost all* aerospace contracts are cost-plus. In fact, Boeing is the only major prime contractor that will accept a firm, fixed-price contract of any size. Lockheed and Northrop won’t. If you’re really paying attention you can actually predict who is going to win a lot of major contracts by noting the contract type.
But the contract type is not the fundamental flaw in SLS / Orion. That flaw is the immense expense. Even if both were firm, fixed-price contracts, they would cost about $38 billion for SLS and $21.5 billion for Orion to develop. For that amount of money we could have paid for not just Artemis but an operational lunar base at the south pole.
It’s the ESAS architecture — and the requirement that MSFC run the whole thing — that is the source of the expense. Be angry, but be angry at the right things.
Sounds like another shuttle program.
NASA has to get away from this one launch per mission mentality.
Start stacking and assembling mission parts in LEO. then you don’t have launch weight limits. Just size limits that can be gotten around by launching more parts for assembly in space.
“SLS is the only rocket powerful enough to send Orion, astronauts and supplies to the Moon on a single mission, and no other rocket in production today can send as much cargo to deep space as the Space Launch System rocket,” John Honeycutt, NASA’s SLS program manager, said”
Is that into lunar orbit or just a fly-by? I’ve heard that that the service module doesn’t have enough fuel to put a crew into and take them out of orbit.
Look at how NASA handles their requirements for space under the current system. The big money goes to keeping the voters doing the right thing. When they need someone to get them to orbit, they hire it done. The Russians are getting uppity, so Spacex will take over that portion of our space program.
Robert,
You wrote: “They are playing this game as well, doing whatever they can to make it easier for Congress to fund them.”
But this still makes Congress at fault. And maybe us.