The editorial in the June 13, 2011, edition of Space News titled “A Missed Opportunity to Trim Launch Costs” [page 18] identifies the costs of Atlas 5 as one of NASA’s biggest concerns, but it draws the wrong conclusion. Sometimes buying in bulk is not a good deal.
First, if NASA locks-in to the United Launch Alliance’s (ULA) skyrocketing prices with a block-buy, they will eliminate any potential for future cost savings and innovation. As noted by the Federal Trade Commission (FTC) at the time of the ULA merger, “the anticipated result of this anticompetitive consolidation would be to reduce the rate of innovation and other non-price benefits and increase the prices that the government, including the Air Force, NASA and other government agencies, would pay for these services.”
Second, sinking all your money in a single product means you can’t use it for other things. Launch vehicles are an important aspect of delivering a spacecraft to orbit, but their cost should not have a negative impact on executing the mission. When a satellite program gets canceled because there’s insufficient funding, it’s the same as a 100 percent launch failure.
Lastly, perhaps the biggest fallacy about the Evolved Expendable Launch Vehicle (EELV) block buy is the assumption that the consumer will get a better price. NASA and the Air Force agree that EELV program costs have recently risen by about 50 percent in the last year alone. The 2012 budget for four Air Force EELV launches is $1.74 billion, which is an average of $435 million per launch. Falcon 9 is available on the commercial market for $50 million to $60 million and Falcon Heavy is $80 million to $125 million. For government missions, NASA has added mission assurance and additional services, which increase the price by an additional $20 million. And unlike EELV, this price includes all nonrecurring development costs and on-orbit delivery.
Why reward a program whose prices are soaring with a long-term deal? By utilizing competition instead, NASA and the U.S. Air Force could actually save up to a billion dollars a year in space launch, while helping assure access to space with truly independent launch vehicle families.
Competition, not bulk-buys, provide the greatest buying power for the war fighter, the science community, and the ultimate customer—the U.S. taxpayer.
Adam Harris, Washington
The author is vice president of government affairs at Space Exploration Technologies Corp., maker of the Falcon 9 rocket.
