German Study Finds Pros, Cons to Different Commercial Models for Station Resupply

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PARIS — It is a story of two companies with similar contracts from NASA to carry 20,000 kilograms of payload to the international space station. Both develop new rockets and capsules to do the work. 

Both are behind schedule but otherwise are delivering the goods. NASA is content and seems ready to buy more services from both.

But the similarities between Space Exploration Technologies Corp. and Orbital Sciences Corp. end there, as is highlighted by a comparative analysis performed, surprisingly, by the German Aerospace Center, DLR.

Or perhaps it is not so surprising. DLR is in the thick of the debate in Europe about how to adapt the Ariane rocket system to the changing commercial launch market while meeting the launch requirements of European governments.

At the center of the discussion is whether the current Ariane 5 rocket production landscape of more than 100 contractors spread around Europe should be abandoned in favor of a much smaller supply chain located in a handful of nations.

In examining NASA’s Commercial Resupply Services (CRS) work by SpaceX and Orbital, DLR wanted to determine whether the companies’ very different make-or-buy strategies have yielded a winner.

Not yet, said DLR’s Alexander Weiss, who presented the study’s findings here April 11 at the Space Access conference organized by Astec Paris Region.

“For commercial cargo supply under the NASA contract, both companies are competitive,” Weiss said. “There is no clear evidence that one approach is better.”

Hawthorne, Calif.-based SpaceX has made a virtue of its decision to make its Falcon 9 rocket and Dragon cargo capsule almost entirely in-house. Raw materials and certain parts come in one end of the factory, and rockets and capsules come out the other end.

Orbital’s Antares rocket and Cygnus cargo vehicles, on the other hand, rely on a global supply chain.

“Orbital goes for outsourcing in a straightforward way,” Weiss said. “Of their 11 major suppliers [for Antares and Cygnus], six are from the United States and five are non-U.S.”

The Cygnus pressurized cargo module is made in Italy, its solar arrays are from the Netherlands and its GPS navigation system is from Japan. Antares’ main-stage engine is Russian, and the rest of the stage is Ukrainian.

Importantly, Weiss said, Dulles, Va.-based Orbital has maintained full system design authority and is also responsible for system integration. SpaceX also retains these functions, in addition to the manufacturing, integration and operations.

The DLR study found that while the supply chains are different, SpaceX and Orbital shared similarly conservative technology choices. “There are no technological breakthroughs in either system,” Weiss said.

Predictably, DLR found that the SpaceX model may be superior in the event of market changes insofar as the company is not locked into long-term contracts to the extent Orbital is.

The Orbital model appears superior because it keeps development costs low, and both business and technology risks are shared between the prime contractor and its suppliers.

DLR said that one of the most surprising conclusions from its analysis is that, as Orbital has shown, “the global launch-vehicle market has matured to the point where you can buy all you need, off the shelf, for a medium-class launcher.”

The reverse side of this: “You are restricted to what is available on the market, and scaling production up or down is more difficult because you are dealing with five or six major suppliers.”

Another drawback to the Orbital model — of special interest given the current tensions between Russia and Ukraine and the imposition by the United States and others of limited sanctions against Russia — is the political risk associated with investments abroad.

“Orbital relies on the management structures of its suppliers, and to some extent on the political stability of the countries of its international partners,” Weiss said. “In the case of Ukraine, this path could be causing some lack of sleep at Orbital now.”

While DLR’s assessment is that both the SpaceX and Orbital models work well for CRS, the German agency predicted that if the companies seek markets outside the U.S. government then the SpaceX model might be superior.

“The all-in-house model has an advantage in its greater flexibility and adaptability to market changes,” Weiss said.

SpaceX has always intended its Falcon 9 rocket to be active in non-NASA markets and the vehicle has already won broad support in the commercial launch market. Orbital has said Antares also will broaden its appeal beyond NASA, but for now that does not appear to be a company priority.

The aggressive approach to commercial sales, and the well-publicized ambition of SpaceX Chief Executive Elon Musk to carry astronauts to Mars, has given SpaceX a rock-star image publicly, DLR found. Orbital, in contrast, keeps a lower profile.

“Put ‘Orbital Sciences’ into a search engine and you get 10,000 hits,” Weiss said. “The same search for ‘SpaceX’ produces 10.5 million hits.”

DLR said the lessons for Europe in the comparison of these two U.S. companies is that a wide distribution of subcontractors is not, in itself, a bad thing. Second, DLR said, a guaranteed public demand for launch services is indispensable to the success of a new rocket’s development given the unpredictability of the commercial market.

Finally, empowering industry with design authority over a new rocket is a valid, even desirable, step. “Agencies like NASA should not go into too much technical detail,” Weiss said. “Leave that to the companies as they are quite capable of doing the work themselves.”

 

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