SpaceX raises Falcon Heavy launch price for U.S. military
Capitalism in space: It now appears that SpaceX has significantly raised the price it is charging the U.S. military for its Falcon Heavy rocket
In winning the military’s new long term launch contracts, awarded to both SpaceX and ULA through 2026, SpaceX apparently doubled the Falcon Heavy price.
In 2018 he said the rocket would cost no more than $150 million to loft heavy payloads into orbit. But the award SpaceX received for a single mission in the first year of Phase Two was $316 million. That’s quite an increase.
The article is clearly one of those industry hit pieces against SpaceX. At the same time, I completely accept what it has found to be true. SpaceX no longer needs to undercut ULA by gigantic amounts to gain military contracts. Moreover, since the military decided to restrict bidding for all launches for the next five years to just these two companies, SpaceX has no reason to offer the same low prices it has in the past. All it needs to do is undercut ULA’s high prices by a little, and get the deal.
In a sense, it isn’t SpaceX’s fault the military will now have to pay so much. Blame our vaunted military bureaucracy, which choose to limit the competition to just two companies for the next five years. They are getting what they wanted, even if it ends up screwing the taxpayer.
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Capitalism in space: It now appears that SpaceX has significantly raised the price it is charging the U.S. military for its Falcon Heavy rocket
In winning the military’s new long term launch contracts, awarded to both SpaceX and ULA through 2026, SpaceX apparently doubled the Falcon Heavy price.
In 2018 he said the rocket would cost no more than $150 million to loft heavy payloads into orbit. But the award SpaceX received for a single mission in the first year of Phase Two was $316 million. That’s quite an increase.
The article is clearly one of those industry hit pieces against SpaceX. At the same time, I completely accept what it has found to be true. SpaceX no longer needs to undercut ULA by gigantic amounts to gain military contracts. Moreover, since the military decided to restrict bidding for all launches for the next five years to just these two companies, SpaceX has no reason to offer the same low prices it has in the past. All it needs to do is undercut ULA’s high prices by a little, and get the deal.
In a sense, it isn’t SpaceX’s fault the military will now have to pay so much. Blame our vaunted military bureaucracy, which choose to limit the competition to just two companies for the next five years. They are getting what they wanted, even if it ends up screwing the taxpayer.
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 or from any other book seller. If you want an autographed copy the price is $60 for the hardback and $45 for the paperback, plus $8 shipping for each. Go here for purchasing details. 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
At least we know that extra taxpayers’ cash will be put to good use by SpaceX. ULA, Boeing and others would probably use it to buy new Ferraris for their executives and majority stockholders (or something).
The justification for the extra cost is that to meet the demands of this contract, SpaceX needs vertical integration facilities and a larger fairing, neither of which it has any other need for. And I’m sure SpaceX is delivering those new capabilities at much less of a price tag than ULA would.
It’s the market price, SpaceX isn’t using any anti-competitive strategies to influence the market price, No foul.
The vertical stacking question changes the math, so it makes sense.
Not mentioned, and I would assume never will be mentioned, is if the proposed launches are such that some or all of the vehicle must be expended to raise the needed mass to the target orbits.
Expendable is more expensive.
I suspect that the security overhead to satisfy many of these missions is a factor too. If you read the fabulous biography “Skunkworks” about Ben Rich and his tenure at that fabled Lockheed organization you, will gain an appreciation of the degree to which that can impose overhead in the form of separate and secure facilities, staffing, etc. And given the penchant of our adversaries to steal anything they can, probably a reasonable cost to bear imho.
The article is by Loren Thompson AFM (anything for money). Long time paid old aerospace shill, er, publicity agent.
ULA was getting a billion dollars a year in addition to the cost of each launch for more than 10 years. So charging an extra 150 million for the first F9 heavy launch that requires vertical integration makes perfect sense. They are having the federal government pay for these unique requirements. Also SpaceX is creating an extended fairing for military satellites.
The reporter obviously doesn’t know anything about the space industry or he is in ULAs camp.
Doug Booker,
This is a good point. It is difficult to know how the contract for annual pad-maintenance factors into these bids. If it does not factor, then ULA’s competition is at a disadvantage when bidding, because they have their own fixed expenses.
The article is clearly one of those industry hit pieces against SpaceX.
It’s by Loren Thompson, so: It goes almost without saying.
But it’s generally assumed in the industry that much of the award for this launch is for the defraying of the cost of the new mobile service tower needed for vertical integration, and development of a new extended fairing. In fact, more than one reliably known SpaceX insider has confirmed the point on the NSF forums.
Thompson does not even discuss the possibility. Instead, he simply leaps to the interpretation that reflects the worst on SpaceX – as he often does.
Now that Elon has his foot in the door, he just has to beat ULA on price. The only reason to keep ULA on life support is in case Elon gets mad at the DOD.