The $62 million (and higher) question

Robin

This site contains my opinions and ideas only, not the opinions or ideas of any organization I work for. It’s my idea playground, and I’m inviting you in. Welcome!

Which is worse? An advertised price many folks say can’t be true? Or an unavailable published price taxpayers are normally on the hook for?

The second question refers to the published prices SpaceX has on its website for launch services. The company makes it seem simple: $62 million starting for a Falcon 9 launch or $90 million for the new Falcon Heavy. It’s so simple, even people not following the industry can understand the pricing. And yet, there are many who say these prices can’t be true.

The third question refers to United Launch Alliance (ULA), a company that sits closer to the other end of that transparency spectrum for launch pricing. The company does have the “Rocketbuilder” site which seems as if it’s providing some insight. The site covers Lockheed Martin’s Atlas V rocket, but none of Boeing’s Delta line. And then ULA goes a bit car-sales technique on us, using the word “value” for a little obfuscation, with the price somehow diminishing as value is added. This situation is also unsatisfactory.

Why bring up both companies? They are great examples of one question the global rocket industry has attempted to obscure for a long time: how much does it cost to launch a rocket?

It’s a problem people following this industry have had to deal with for a while. Until SpaceX, launch costs have traditionally been guesses, wrapped in wikipedias, and veiled in press releases. Government launches in particular don’t highlight launch prices for reasons such as national security, contract secrecy, or maybe, perhaps, shame? Motivated people find examples of NASA/ULA contracts, like this one, listing launch services using the Delta IV Heavy. Why not just outright publish the pricing? Is it because it’s worse than we think? Would high prices get a government acquisitions SES in trouble? It certainly wouldn’t be because the prices are as low, or lower, than SpaceX’s offerings.

ULA and other U.S. companies aren’t the only ones keeping launch prices somewhat of a secret. Arianespace, China Great Wall, Japan, and India also keep prices in the shadows. Russia, does this too, except lately: the relatively new Glavkosmos launch service seems to list the price of Soyuz 2.1a/2.1b launches. Again, there is ambiguity. Is that 20-22 M supposed to be 20-22 million dollars? Ruples (not likely)?

Why talk about this? After all, if it weren’t for all these ambiguities, some of my work would be gone (and, honestly, I enjoy looking for this stuff).

It’s just to highlight the weirdness of people seeing a price that’s low, and saying it can’t be true. What’s weirder is the lack of unambiguous pricing data, period. How weird would it be if a car’s pricing depended on how far I intended to drive it? And how frustrating would it be if the pricing data would only be available after I started talking to the car salesperson, and only if I signed an agreement not to say how much said car would cost me?

Wouldn’t you rather have a baseline price for launches (the rocket Monroney) and then see all the add-ons itemized? Even then we would know that price is a fiction (you don’t pay full sticker, do you?)–but it puts us in the ballpark when we’re car-shopping.

Imagine a sticker with the base launch service pricing. Then imagine the add-ons. The equivalent of underbody rust protection, mission assurance=$40 million. Geosynchronous orbit=$20 million. Low Earth orbit would be a deal=$10 million.

Hey, maybe ULA is on to something…

However, these things are changing. Rocket Lab advertises its Electron launch service as $4.9 million. Of course there’s SpaceX with its prices. Glavkosmos may also be responding, if those numbers are indeed money values. This is also why ULA did put some of its inventory up with Rocketbuilder, “values” notwithstanding. A person can hope one day that all that needs to be done is to go online to a particular launch service provider, and just see the Monroney for its inventory. It won’t be CarMax, but it’s one small step.

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4 thoughts on “The $62 million (and higher) question

  1. You are pointing out the ultimate question (and in this case 42 doesn’t seem to work). And you are absolutely right, about the misinformation we have about this.
    I personally believe that is in the interest of all the launcher industry to keep this misinformation about prices. Even SpaceX, that is playing with the “we are cheaper, we are clear on our prices” is on the same game (for example the advertise $62M for Falcon 9, doesn’t match with what USAF is paying “$96,500,490 firm-fixed-price contract for launch services to deliver a GPS III satellite to its intended orbit”-https://www.defense.gov/News/Contracts/Contract-View/Article/1112618/ )
    Because I think, at the end with no clear prices, they can do whatever they want with governments and maybe also with operators. From investing in new launchers that will “be cheaper” (without knowing what we are really paying right now or what cheaper means), to giving subsidies to launcher operators “to permit the launcher to be profitable in the interests of national and security reasons” or I guess that with a clear view of prices, some questions about “it is really necessary to have this launcher?” may arise. All these things will be so much difficult if we really knew the prices.
    Also when talking about prices and cost to launch, we’ll need to address how we compute this cost. For example, what do we do with the launch pad costs? Do we include them in each launch or what? Or what do we do with all the R&D costs (that traditionally are paid by governments) but in companies like SpaceX are starting also to be pay by the launcher operator?
    At the end is amazing that right now we are still with some many uncertainties on this topic.At the end with no clear information, you are freer to do as you want in the launcher sector. And I believe this is the great motivation for this lack of clarity.
    For our part, we can’t only keep investigating and pointing out some answers for this great and important question. And maybe, as you said, someday industry and governments will change their view on how to deal with the ultimate question: how much does it cost to launch something into space? And we’ll be able to know the answer, which I hope will be better than 42.
    Thanks for the post!

    Liked by 1 person

    1. Hi Angel!
      The extra money the USAF paid SpaceX for the GPS III launch is still lower than ULA, unfortunately for ULA. And almost exactly 4 years ago Musk did note government/military missions would cost 50% more solely because of their mission assurance processes: https://www.cbsnews.com/news/spacex-says-it-could-launch-military-rockets-for-less-than-ula/ (middle of the article). So, the $96 million you mention is close to that–a little over, but not too bad.
      Thank you for the thoughtful response, though. The whole pricing thing is more complicated than it should be. I do agree with you there is some protectionism involved. I don’t think ULA would even disagree. The company is a joint creation, made solely because neither Boeing nor Lockheed thought there was enough business for competition, and encouraged by the American military to get together, because the military was fearful of losing ALL launch capability.

      Liked by 1 person

    1. Hi Angel! Here’s a little more about the costs of mission assurance: http://spacenews.com/griffin-rails-at-dod-procurement-culture-we-make-things-expensive-that-dont-need-to-be/. Griffin calls out mission assurance as being too costly. If you don’t know what mission assurance is, here’s the short definition: it’s a cover the government’s butt business. The government hires contractors to watch other contractors. The assumption from the government being that when more people are involved, as well as the more time and money spent, less can go wrong. But as you can guess, this costs a lot of money. This is why SpaceX marks up the price for military missions.

      Like

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