WASHINGTON — NASA’s plans to buy future launches of the Space Launch System as a service are unlikely to achieve hoped-for cost savings, the agency’s inspector general concluded, recommending NASA keep its options open for alternative launch vehicles.
In an Oct. 12 report, NASA’s Office of Inspector General (OIG) concluded a 50% reduction in SLS launch costs projected by NASA by moving to a services contract is “highly unrealistic,” with the vehicle’s cost likely to remain above $2 billion for the foreseeable future.
NASA announced in July 2022 its intent to move to a services contract, called Exploration Production and Operations Contract (EPOC), for missions starting with Artemis 5 at the end of the 2020s. That contract would be with Deep Space Transport, a joint venture of Boeing and Northrop Grumman, the two major contractors for elements of the rocket.
NASA previously said it was seeking “a substantial savings of 50% or more off of the current industry baseline per flight cost” of SLS by shifting to EPOC. It would also open the door to using SLS for missions other than Artemis lunar exploration flights, including non-NASA customers.
The OIG report concluded both reduced costs and additional customers for SLS were unlikely. That report estimates the Block 1B version of SLS, to be used starting with Artemis 4, will initially cost $2.5 billion per flight. A 50% cost reduction under EPOC would mean the SLS costs would be reduced to $1.25 billion each.
However, NASA officials acknowledged that the 50% cost reduction goal was “aspirational and not based on actual analysis,” and OIG was skeptical it could be achieved. “While Boeing officials told us they believe the 50 percent cost reduction goal under EPOC is achievable, based on our audit we find such a goal infeasible.”
That skepticism came from assessments of ongoing efforts to reduce costs that have not achieved expected savings, such as on assembly of core stages for SLS and the restart of production of the RS-25 engine. A lack of competition, the report added, will make it difficult for NASA to negotiate cost reductions, contrasting it to competition in other launch services and commercial crew.
OIG concluded that, based on its assessment of existing contracts and affordability initiatives, the cost of the SLS will remain at more than $2 billion per vehicle through the first 10 launches under the EPOC contract. It added that the extent of cost savings may also depend on the use of fixed-price versus cost-plus approaches for EPOC.
Part of that cost-reduction strategy is finding additional customers for SLS that can increase the vehicle’s flight rate and reduce per-vehicle costs. However, the report noted that efforts to find other users of the SLS, including the Defense Department, have been unsuccessful, with those potential users instead opting for existing or new vehicles under development by Blue Origin, SpaceX and United Launch Alliance.
The OIG report suggested that while SLS is currently the only vehicle capable of launching the Orion spacecraft, that may not always be the case. “However, in the next 3 to 5 years other human-rated commercial alternatives may become available,” it stated. “In our judgment, the Agency should continue to monitor the commercial development of heavy-lift space flight systems and begin discussions of whether it makes financial and strategic sense to consider these options as part of the Agency’s longer-term plans to support its ambitious space exploration goals.”
The OIG report was the second in as many months critical of the costs of SLS, a key element of NASA’s Artemis lunar exploration architecture. A Sept. 7 report by the Government Accountability Office criticized NASA for a lack of transparency on SLS costs as those costs grow under existing contracts.
“Senior agency officials have told us that at current cost levels the SLS program is unsustainable and exceeds what NASA officials believe will be available for its Artemis missions,” the GAO report stated. It acknowledged efforts like EPOC to reduce SLS costs, but noted it was too early to evaluate how effective they could be.