Surrey Satellite closing U.S. factory

Capitalism in space: Surrey Satellite Technology, one of the first companies to build smallsats and cubesats, is closing its U.S. factory in Colorado and concentrating its satellite work once again in the UK.

It appears the company might have gotten a little fat and lazy, and has allowed the competition to begin passing it by:

Parker said the exact number of people SST-US will let go has not been determined. SSTL’s decision to layoff workers in the U.S. is not related to the decline in geostationary telecommunications satellite orders that triggered a reduction in workers at Space Systems Loral, Parker said. The majority of SSTL’s business is in remote sensing, navigation and science — spacecraft typically found in non-geosynchronous orbits.

Instead, Parker said it was more out of concern that the smallsat movement the company had championed for years had picked up steam and was moving without SSTL. “We had grown slightly fatter, slightly more complacent, so we are doing a lot of work on our organization. We started last year and changed our organizational structure internally. We changed the way our teams are organized so we now have a much flatter structure with more autonomy,” she said.

SSTL is not reducing its headcount in the U.K., Parker said.

This kind of reminds me of ULA’s recent effort to streamline its operations, faced with competition from SpaceX. Here, Surrey is finding itself getting beat by a lot of new players, and had found it needs to reshape itself to survive.

Dress rehearsal completed for SpaceX’s Sunday launch

Capitalism in space: SpaceX yesterday successfully completed the static fire dress rehearsal countdown for its planned Sunday Falcon 9 launch, which would be the third SpaceX launch in 9 days.

The article also provides some good information about the company’s efforts to recover the first stages and the fairings from the past two launches. For example:

This mission [the Florida launch of a Bulgarian satelltie] also included another test per SpaceX’s fairing recovery aspirations. Classed as the best attempt to date, SpaceX has added steerable parachutes to guide the fairing halves to the ocean surface, before it deploys a “bouncy castle” that protects it while it awaits recovery. The technology is still being refined, but Elon Musk believes full recovery could be achieved later this year.

SpaceX expanding facilities in Florida for refurbishing used first stages

Capitalism in space: SpaceX is proposing to expand its facilities at Port Canaveral for refurbishing used first stages.

It appears they need the approval for the work from the port’s Board of Commissioners, though I suspect this board will rubber stamp its approval as quickly as it can.

One tidbit from the story. SpaceX has so far recovered 13 first stages and flown two again. One (the first) has been put on display, which leaves 10 available for reflight. They plan to use two on the first Falcon Heavy launch. The remaining 8 are likely for sale (maybe 10 if the two reflown fly a third time), which explains the negotiations going on with Iridium and others.

New company formed to service satellites in-orbit

Capitalism in space: MDA and SSL Loral today announced the formation of a new company, Space Infrastructure Services (SIS), that will service satellites already in orbit.

This partnership is based on the engineering being developed by SSL Loral under a DARPA research project.

The most important part of the announcement however is that SIS has also signed up its first customer.

The company also announced that SES, a world leading satellite-enabled solutions provider, with more than 50 GEO satellites and 12 MEO satellites on orbit, has entered into an agreement for an initial life extension mission with options for further missions. Under this agreement, SES will be the first commercial customer to benefit from satellite refueling that can be called up as needed with minimal disruption to spacecraft operation.

As it did with SpaceX, SES is aggressively supporting this new technology that will revolutionize space operations. Here the technology will allow them to repair their satellites, thus saving them the cost of replacing them with new satellites.

SpaceX to try another launch on Sunday

Capitalism in space: SpaceX is aiming for another launch on July 2 in Florida, only 9 days after their last launch there.

That will make three launches in nine days.

Meanwhile, in an interview on The Space Show with David Livingston, SpaceX President Gwynne Shotwell revealed that, after this year’s planned demo launch of the Falcon Heavy, they plan two commercial launches of the rocket in 2018.

That means the Falcon Heavy will have flown at least three times before SLS even comes close to its first test flight.

Luxembourg offers prizes for new space business proposals

Capitalism in space: Luxembourg yesterday announced that it will award two prizes, worth a total of 430,000 Euros, for new innovative space business ideas.

The call for submissions covers the full chain for exploiting space resources, from searching for minerals, mining and selling the processed product.The proposals should include a long-term view for developing space resources and be able to generate an economic return in the short and medium term.

The first award is a €400,000 prize to support a study under the Luxembourg national space program managed by the ESA. The second, for €30,000, is for early-stage projects and offers an investing campaign on www.spacestarters.com.

The ministry will support both award winners by offering workspace for the companies.

It sounds like they will entertain practically any ideas put forth. The deadline to submit is September 8, with the award announcement made in November.

The academic community weighs in on Outer Space Treaty

Link here. They recognize the problem the Outer Space Treaty creates for property rights, but not surprisingly have trouble touching on the heart of the problem, that the treaty forbids the establishment of any nation’s laws on any territory in space.

Hertzfeld points out that the industry needs policies that address for-profit operations in space, particularly activities that will be managed or operated by the private sector. Until now, he says, most private sector activities have been narrow, but that could change as companies become more involved with satellites and in spaceflight. “How do you deal with property rights in space?” he said. “Ownership of these natural resources, mineral resources, up there? How do you deal with approaching satellites that are perhaps owned by someone else, particularly if it’s another nation’s satellite? How do you deal with debris that could cause accidents?”

“There are lots and lots of questions in how you do this internationally, because other nations are involved. These are the issues that are not clearly defined right now.”

Von der Dunk adds that there are still many countries that have no, or only a limited, national space law program. As a result, he says, in the implementation of the Outer Space Treaty, a divergence has grown that has led to gaps, inconsistencies and overlaps in domestic oversight. “Ideally, at the international level it would be good to have some form of harmonization at least of the approaches, noting that of course every sovereign state may have some individual idiosyncratic elements to deal with, but that idea has never moved beyond the stage of academic discussion,” von der Dunk said. “Sovereign states are not willing to comply with any serious effort to make this happen.”

I would love to know what “some form of harmonization” means.

Nonetheless, that this article was published in a major media outlet, which asked these academics about this issue, is once again evidence that people are finally recognizing the problems posed by the Outer Space Treaty, and are beginning to discuss ways for dealing with it.

Blue Origin to build its rocket engines in Alabama

Capitalism in space: Blue Origin announced today that it will build its BE-4 rocket engine factory in Alabama.

There is one caveat. They will only commit to the factory once they have won their contract to build the BE-4 engine for ULA’s Vulcan rocket. And that contract is not yet awarded.

Obviously, this decision has political components. By picking Alabama, Blue Origin hopes to blunt the political favoritism in Alabama to Aerojet Rocketdyne’s rocket engine, thus improving their chances of winning the ULA contract.

SpaceX launches 10 Iridium satellites, lands first stage

Capitalism in space: SpaceX today successfully launched 10 Iridium satellites while also once again successfully landing the Falcon 9 first stage.

This gives them 9 launches for the year, more than any other company or country in the entire world.

One cool personal detail about today’s launch. Diane and I were doing a hike with two friends, and at about 1:20 pm I asked Brian if his Iphone might have signal and could we maybe then watch the launch. Lo and behold, he did have signal, and we were able to connect with SpaceX’s live stream, and were able to take a fifteen minute hiking break to watch the launch and first stage landing while sitting on a mountain trail in the Santa Catalina mountains north of Tucson.

Ain’t technology wonderful?

A detailed look at the UAE’s national space policy

Link here. The overall goals appear smart and worthwhile. They suffer from only one problem: This is a top-down policy, with the government attempting to drag the society forward in a specific direction. The direction might be a good one, but generally such efforts have limited success.

This paragraph meanwhile reveals the influence U.S. policy is having:

Effective and Attractive Space Regulatory Environment – The third enabler recognizes the need to incorporate and develop domestic space laws and regulations. These laws and regulations will be required to increase transparency, effectiveness, and resilience, and also provide protection of intellectual property rights as well as provide insurance policies and facilities for various private space activities. The legal and regulatory environment created through the third enabler will simplify the sharing of appropriate data and information to support value-added industries. The environment envisioned by the third enabler will strive to require the minimum regulatory burden on commercial space activities to enable the UAE to comply with its domestic and international legal obligations. That another country like the UAE might offer a more effective and attractive foreign legal and regulatory environment has been used to great effect in lobbying efforts in the United States and has prompted the both the House and Senate to reevaluate the U.S. commercial space licensing scheme. [emphasis mine]

I have highlighted the key phrases. The first illustrates the recognition that less government regulation is best, a variation of the basic American idea of freedom. The second notes the importance of competition. Just as Congress is rewriting its space laws to make it easier for U.S. citizens and companies to compete in space, the UAE recognizes that it must do the same.

Four reasons why college degrees are becoming useless

Link here. The first two reasons are illustrated forcefully by the madness we have recently seen in many college campuses, where mobs of screaming thugs take over and drown out anyone who wants to discuss the issues at hand rationally.

The last two reasons are less noticeable but more economically important. Combined with the first two reasons, expect there to be a collapse in attendance at colleges in the coming years.

SpaceX launches satellite with reused first stage, recovers stage

Capitalism in space: SpaceX has done it again. They have placed a Bulgarian television satellite into orbit, using a previously flown first stage.

The landing of the first stage had a moment of fear. Just before the stage was to land, as it was firing its engines during the landing burn, the video showed something hit the water next to the barge, then the image froze and was lost. For about fifteen seconds it appeared that possibly something had gone wrong during the burn. Then the image returned, showing the stage sitting neatly and upright and apparently unharmed, on the barge. Whether this stage will fly a third time will have to wait until they inspect it, but if it does, they will certainly prove without question that the decades of big space engineers telling us that such things were impossible was childish and narrow-minded hogwash.

Remember that the next time someone tells you something is too hard to try to do.

OneWeb wins FCC approval for 720 satellite internet constellation

Capitalism in space: The FCC has given unanimous approval to OneWeb to launch its 720 satellite constellation, designed to provide internet access worldwide.

They hope to launch the first 10 satellites in 2018 and begin service in 2019. The satellites will be put in orbit by a variety of launch companies, including Roscosmos, Arianespace, and Virgin Orbit.

This is only the beginning. SpaceX has its own internet competition planned, expected to begin launching in 2019.

Bulgaria credits SpaceX’s low costs for making its satellite possible

Capitalism in space: The CEO of the Bulgarian company that built the television satellite that SpaceX plans to launch later today said that it was SpaceX’s low costs that made the satellite possible.

Maxim Zayakov, CEO of BulgariaSat and its affiliate television provider Bulsatcom, told Spacefight Now that SpaceX’s push to reduce the cost of space transportation has yielded tangible results for his country. “People don’t realize that, for small countries and small companies like us, without SpaceX, there was no way we would ever be able to even think about space,” Zayakov said. “With them, it was possible. We got a project. I think, in the future, it’s going to be even more affordable because of reusability.”

This is what I have been saying for more than a decade. You lower the costs, you make it possible for more customers to enter the market. This increase in customer base makes it possible for more launch companies to enter the market in response, and that forces the costs to drop further, which starts the whole cycle again. In the end we not only get a robust launch industry, the human race gets to settle the solar system.

The article also confirms that, at this time, SpaceX is only offering a 10% discount for the use of a reused first stage. They say this is because they wish to recoup their $1 billion investment to develop reusability. While this might be true, the real truth is that SpaceX doesn’t need to provide a larger discount. The discounted price of $55.8 million saves satellite companies another $6.2 million, which isn’t chicken feed, and offers them the cheapest launch price anywhere by far. SpaceX in turn makes more money per launch.

Should another company begin to challenge this launch price I would then expect SpaceX to lower the price further. They have the profit margin to do this.

Note that you can watch today’s Falcon 9 launch of the Bulgarian satellite at 2:10 pm Eastern at SpaceX’s website.

India’s PSLV rocket successfully launches 31 satellites

India today completed its fourth launch of 2017, using its PSLV rocket to successfully place 31 satellites in orbit, including 30 smallsats.

They also did in-orbit engine tests of the rocket’s fourth stage after releasing the satellites.

For 2017 India has at this moment completed as many launches as ULA, and only one less than Russia. They have four more launches tentatively scheduled, though it is likely that not all will fly this year. If they get them off, however, they will definitely move into the upper tier of launch nations.

ESA discovers the wonders of capitalism!

Three stories today illustrate how competition is revolutionizing and energizing the European aerospace industry:

The first two stories are clearly examples of the new competition within the launch industry. The first describes the effort by ESA and Airbus-Safran, a partnership now dubbed ArianeGroup, to get the Ariane 6 rocket built fast and cheaply, under pressure as they are by SpaceX’s lower prices.

The manufacturing consortium is looking for a 40% cost reduction, at least, in the Ariane 6, compared with the Ariane 5. In part that is coming from exploiting new materials and new manufacturing techniques (3D printing, friction stir welding, augmented reality design, etc) and in part by maximising the common use of elements in both the 62 and 64 variants. Avio’s solid-fuelled booster is also the same as the first stage on the company’s Vega rocket, which launches much smaller satellites.

But a big cost saving will come from simply employing fewer people. “There is a transition from Ariane 5 to Ariane 6 (from 2020 to 2023), but from 2024, 2025 onwards – our workforce will be 30% less than today,” explained Hans Steininger, the boss of MT Aerospace, which is making the rocket’s huge metallic propellant tanks.

The second article describes how ESA is suddenly changing its reusable mini-shuttle program from a typical, staid, dead-end research project (where they do a series of test flights with no thought towards using what they learned) to a private mini-shuttle available for lease by researchers of all stripes.

By 2025, ESA officials said, Space Rider could be operating commercially, flying science payloads and bringing them back to Earth for roughly $9,200 per kilogram. Arianespace, the Evry, France-based launch services provider, would likely serve as Space Rider’s operator, offering industry and government customers the opportunity to fill the spaceplane 800-kilogram payload capacity with microgravity science, materials testing, telecommunications and robotics demonstrations.

Previously, the plan had been to test fly this spaceplane without selling its cargo capacity. Now they want to make money on it, right from the beginning.

The third article meanwhile illustrates that the old way of doing things is still a factor in Europe’s space effort. Europe’s Galileo GPS satellite network has been delayed badly by faulty atomic clocks. They are replacing them, and are preparing to resume launches. However, in ordering 8 new satellites they have also decided to keep OHB, the same contractor who provided the faulty atomic clocks, rather than give the contract to a competitor or at least split it between two contractors.

The contract, expected in late 2016, was delayed as the commission and the 22-nation European Space Agency (ESA) debated whether to maintain OHB as Galileo’s sole supplier or to award all or part of the contract to competitor Thales Alenia Space Italia.

In the event, the commission and ESA agreed that the savings realized from ordering recurrent-model spacecraft from OHB, and the schedule assurance this provided, outweighed arguments on behalf of dual sourcing. “Dual sourcing is always important but it needs to be weighed against other program requirements” including cost, said Paul Verhoef, ESA’s director of navigation. Verhoef said ESA and the commission may pursue dual sourcing for the next round of Galileo orders, when a new design will be used for the system’s second generation.

I suspect that as competition continues to prove its worth ESA will move to accept the idea of competition in the building of future GPS satellites. For right now, however, this change was more than this large government bureaucracy could handle.

House lawmakers push Air Force to use reusable rockets

Capitalism in space: House lawmakers today added an amendment to the Air Force budget that would require the military to “move rapidly to evaluate the potential use of reusable space launch vehicles such as those being flown by SpaceX.”

The amendment was approved by a voice vote in committee.

As noted by Eric Berger at the link, this marks an amazing shift by Congress in a very short time. A few years ago, SpaceX had to sue the government for the right to bid on Air Force launch contracts. At that time Congress was exceedingly skeptical of allowing military satellites to launch on new Falcon 9 rockets, no less ones using used first stages. Moreover, Congress was then eager to protect its big buddy ULA, which then had a monopoly on military launches and was making gobs of money per launch. Now, Congress is all for re-usability and saving money and competition.

This change demonstrates the importance of success. SpaceX has been successful, and with that success the nay-sayers have suddenly vanished. Now, everyone loves them, when only a few years ago they were considered risky and unreliable.

When SpaceX’s Falcon Heavy succeeds and flies several times prior to the first launch of SLS, watch for this same process to occur there as well. SLS will no longer be sacrosanct, and Congress will suddenly discover how much a waste of money it is.

Iridium launches might use reused Falcon 9 first stages

Capitalism in space: Iridium is considering using Falcon 9 previously flown first stages for its later already contracted launches with SpaceX.

Iridium is launching 75 of its 81 second-generation Iridium Next satellites using eight Falcon 9 launches, the first of which took place Jan. 14. In a conference call with reporters June 19, Desch said Iridium’s original contract with SpaceX calls for new Falcon 9s for each mission, but if SpaceX can improve its launch schedule with pre-flown stages, Iridium would consider them for missions in 2018. “While we are currently flying first flown launches, I’m open to previously flown launches, particularly for the second half of our launch schedule,” said Desch.

Desch said there are three criterion by which Iridium would decide whether to use a pre-flown rocket: schedule, cost and reliability — of which schedule is the most important. “Would [pre-flown rockets] improve the current launch plan that I have with brand-new rockets that I’ve basically contracted for a number of years ago and have budgeted for and have paid for?” Desch asked. “That’s the first thing: will they improve my schedule, because schedule to me is very very important.”

I think this tells us that Iridium is waiting to see if this week’s launch of a Bulgarian satellite on a reused first stage is successful. The article also also notes that they are still negotiating over price for using “flight proven” first stages.

Trump administration continues to clean house at EPA

The Trump administration this week announced that it will not renew the appointment of 38 scientists to a key EPA science panel.

All board members whose three-year appointments expire in August will not get renewals, Robert Kavlock, acting head of EPA’s Office of Research and Development, said in the email, which was obtained by E&E News.

Because of the need to reconstitute the board, EPA is also canceling all subcommittee meetings planned for late summer and fall, Kavlock said. “We are hopeful that an updated BOSC Executive Committee and the five subcommittees can resume their work in 2018 and continue providing ORD with thoughtful recommendations and comments,” he wrote in urging departing members to reapply.

As the article notes, some Democratic pigs are squealing over this, but the Trump administration is only following the law. And considering how political and anti-business the EPA has become in recent years, a full review of all committee members seems entirely appropriate and reasonable.

Arianespace gets another launch contract

Capitalism in space: Arianespace has won new contracts for two launches of its Vega rocket.

More important however was this tidbit:

And, with another two flights to geostationary orbit booked for its Ariane 5 heavy lifter, the Arianespace orderbook now stands at €4.8 billion ($5.3 billion), with 53 launches for 28 customers: 18 using Ariane 5, 25 for the mid-weight Soyuz and 10 for Vega/Vega C.

Compare that manifest with Russia’s, which now only has 15 commercial launch contracts through 2023. Compare it also to SpaceX’s which lists about 30 commercial launches, excluding its NASA cargo and crew missions to ISS.

It would appear that Russia has so far been the big loser in the new competitive launch industry. This can of course change, especially if Russia fixes its production problems, becomes a reliable launch company, and offers competitive prices.

British government to loosen regulations on space

The British government is about to propose new regulations on space to allow the operation of commercial spaceports while establishing a licensing system for the launch companies that will fly from those spaceports.

These new regulations are likely the legislation the government announced it was preparing back in February. I suspect they are, like other recent legislative proposals, trying to fit the square peg of private enterprise into the round hole of the Outer Space Treaty.

New smallsat rocket company plans first flight of aerospike engine

ARCA Aerospace has announced that it will perform the first test flight reaching space of an aerospike rocket engine this coming August.

ARCA Space Corporation has announced the first test-launch of its Demonstrator 3 space vehicle at Spaceport America in August. This will mark the first space flight of an aerospike rocket engine. Aerospike rocket engines are described as significantly more fuel efficient than the current engines and could make launches attempting to bring satellite payloads to space more affordable. Demonstrator 3 will perform a suborbital space flight up to an altitude of 100 kilometers above the New Mexico desert.

Their goal is to build a rocket they have dubbed Haas 2CA for the smallsat industry.

There is an interesting video at the link from the company showing their engineers hand-building this first suborbital test rocket, which the company also says is the first of a weekly series leading up to the test launch. More information about the company can be found at their website. According to their schedule, they hope to make the first orbital flight in 2018, and begin commercial operations by the end of that year.

It’s the hate, not the violence

The last few days have probably been the ugliest I have ever seen in American culture. Not only was an attempt made to commit mass murder against a group of Republican elected officials, the response from too many mainstream Democrats has generally been tone deaf and even supportive of the violence. Worse, the violence appears to be on-going, with no sign of relief.

My list is hardly complete. The stories above are only a small sampling of the ugly stuff I have read since the shooting on June 14. The best I have seen from some Democrats is a hint that maybe they have let their rhetoric get out of hand, but even here they often backtrack to blame Republicans and only Republicans for the shooting.

Are Republicans innocent here? No. The coarseness of language and increasing anger I have seen from both sides in the past six months has been appalling. Rather than respond strongly but intelligently and with civility, too many Republicans have decided they can be as harsh and as coarse and as vicious as the Democrats.

Nonetheless, the bulk of the coarseness and viciousness and violence falls mainly to the Democratic and liberal side of the political spectrum. You need only scan this list of attacks against conservatives since in the past year, many of which I have noted here on Behind the Black. The left has been getting increasingly violent, with no protest by the left’s leaders in the Democratic Party. Even an attempted mass murder seems insufficient to cause much horror or shame in Democratic and leftwing circles.

The key to all this however is the single word I have highlighted in the fourth headline link above. That word is “hate.” What is motivating all of this violence and ugliness is hate, a blind irrational emotion that now prevents these people from looking at reality coolly. Trump is “evil.” He is a “nazi.” He is an “anti-Semite.” He is “racist.” He wants to “kill sick people.”

None of this is true. Trump is surely not the most ideal person to be our president at this moment of time, but he is also not any of the terrible things the left is accusing him of being.

Facts and rational thought however no longer matter to the left. They hate, and their hatred can now be used to justify almost any act, including an attempt at mass murder. This is beyond the pale, and it is turning the left into everything it has said it opposes for the past century: bigoted, hateful, violent, and oppressive. They had better cool their minds down a bit or else they will find themselves in the middle of hellstorm, targets themselves, with no way to control it.

One more thought. Right after the Tucson attack on Congresswoman Gabby Giffords in 2011, I noted the disgusting inflammatory language of the left. They demanded civility from conservatives, while simultaneous calling for their murder. I said then that they had better tone down their rhetoric or face a firestorm that they themselves might not survive.

This behavior must stop. Violent and angry rhetoric can and will cause violence. And it probably has, considering the fact that a large number of the random violent acts in recent years have actually been committed by deranged individuals with liberal, not conservative, leanings. This is not to say that I blame the left for this violence, but that the left has as much of a responsibility as the right to think carefully about what it says, before it says it. Otherwise, they might find that they have made their less rational followers more angry than they ever imagined, or can control.

Or as Michael York says to his Nazi friend at the end of this scene from the 1972 movie, Cabaret. “You still think you can control them?”

We are now six and a half years later, and instead of toning down their rhetoric, the left has escalated it to violence and murder. They have embraced their hate, and it is making them insane.

The state of the global aerospace industry

A new European analysis of the global aerospace industry suggests it is both growing and changing significantly.

Several takeaways that indicate future trends.

  • The government space spending has been stable the past 5 years, there was a 2% drop in 2016
  • The number of nations spending money on space has grown significantly in the past decade, from 47 to 70
  • Spending is shifting from military to civilian efforts
  • Russia experienced a 25% cut in aerospace spending in 2016
  • China passed Russia in spending in 2016
  • U.S. government spending stabilized in 2016 after a 25% decline since 2010

A drop in government spending in space is not proof that the industry is shrinking. In fact, it might be a sign of robust growth, in that it is no longer necessary to depend on coerced tax dollars to finance space projects. Instead, it suggests that because there are increasing profits to be made in space, the government is being replaced by a vibrant private sector. It also suggests that the private sector is finding ways to do things cheaper, which is saving the government money and allowing it to lower its budgets.

The second bullet point above reinforces these conclusions. Even though overall government spending has been stable, more countries have entered the market. More is being done with the same amount of money, and these lower costs are allowing new players to participate. The last bullet point also supports these conclusions. Even though the report notes a significant drop in U.S. government spending on space since 2010, it is very clear to me that the industry has actually prospered in these same years, fueled by a growing private sector.

Air Force budget reveals cost differences between ULA and SpaceX

Eric Berger at Ars Technica has found that the most recent Air Force budget provides a good estimate of the price ULA charges the military for its launches.

According to the Air Force estimate, the “unit cost” of a single rocket launch in fiscal year 2020 is $422 million, and $424 million for a year later.

This is a complex number to unpack. But based upon discussions with various space policy experts, this is the maximum amount the Air Force believes it will need to pay, per launch, if United Launch Alliance is selected for all of its launch needs in 2020. ULA launches about a half-dozen payloads for the Air Force in a given year, on variants of its rockets. Therefore, the 2020 unit cost likely includes a mix of mostly Atlas V rockets (sold on the commercial market for about $100 million) and perhaps one Delta rocket launch (up to $350 million on the commercial market for a Heavy variant).

In other words, the $422 million estimate per launch is the most they will pay. Atlas 5 launches will certainly be less, about $100 to $150 million, while the Falcon 9 will likely be under $100 million. What they are doing is budgeting high so they guarantee they have the money they need to pay for the most expensive launches, usually on the Delta Heavy.

From my perspective, they are budgeting far too high, and if I was in Congress I would insist that this number be reduced significantly, especially considering this Air Force statement on page 109 of the budget document [pdf]:

The Air Force, National Reconnaissance Office (NRO), and the National Aeronautics and Space Administration (NASA) agreed to a coordinated strategy for certification of New Entrants to launch payloads in support of NSS and other USG requirements which has so far resulted in the certification of one New Entrant. The Air Force continues to actively work with potential New Entrants to reliably launch NSS requirements. The Government may award early integration contracts to ensure each potential offeror’s launch system is compatible with the intended payload. Beginning in Fiscal Year 2018, the Air Force will compete all launch service procurements for each mission where more than one certified provider can service the required reference orbit. [emphasis mine]

The “New Entrant” is of course SpaceX. They are also saying that they are going to encourage competitive bidding now on all future launch contracts.

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