Letter: Understating the Cost of SpaceX’s Success
In the Jan. 10 issue, Robert Zubrin writes in his op-ed [“The New Sputnik,” page 19] that Space Exploration Technologies Corp. () developed the Falcon 9 launch vehicle and Dragon cargo vehicle for a total cost of $200 million and argues that this suggests a $2 billion heavy-lift launch vehicle is “in the cards.”
I will not argue that commercial entities cannot undercut government-sponsored and -managed projects, but $200 million does not meet the first sanity check.
SpaceX has over 1,000 employees. Reverse engineering the company’s head count during the past five years of Falcon 9, Merlin engine and Dragon work and applying even minimal aerospace labor rates results in payroll costs alone that far exceed $200 million for the Falcon 9 stack.
Then there is the 500,000-square-foot Hawthorne, Calif., facility, engine test facilities in Texas, the launch site at Cape Canaveral Air Force Station, Fla., vendors, subcontractors and materials — much of that would require funds that are additive to the SpaceX payroll cost even though SpaceX does more in-house than the norm.
Playing with these numbers and being as optimistic as I dare results in costs of well over $1 billion for Falcon 9/Dragon — probably more like $1.5 billion. If true, that is still quite an achievement (though design, development, testing and evaluation are not yet complete) and much less than NASA or the U.S. Department of Defense experience. SpaceX is to be held in high esteem for having achieved what it has done for that cost or anything near it. But $200 million? And then using that basis to leap to a $2 billion heavy-lift launch vehicle? I like Mr. Zubrin’s visionary zeal. But in the rocket business, cost outcomes have historically been stubbornly unmoved by zeal.
Joseph W. Hamaker
The writer is senior cost analyst for SAIC.