The numbers dont lie—NASAs move to commercial space has saved money

When NASA astronauts Doug Hurley and Bob Behnken blast off inside a Crew Dragon spacecraft later this month, they will not only launch into space. They will also inaugurate a potentially transformative era for the space agency.

No private company has ever launched humans into orbit before. Therefore the success of their mission, and others to come in the near future, may go a long way toward determining whether the promise of commercial spaceflight and lower cost access to space becomes the new reality.

This moment has been a long time coming. Nearly 15 years ago, NASA placed a small bet on the nascent commercial space industry when it sought to diversify its fleet for delivering cargo to the International Space Station. NASA had the space shuttle to ferry supplies, of course, but that aging vehicle was not going to fly forever. So the agencys administrator at the time, Mike Griffin, committed $500 million in seed money for the development of new, privately built spacecraft.

Griffin may not have realized what he had unleashed. The first small “Commercial Orbital Transportation Services” contracts awarded to SpaceX and Orbital Sciences have since expanded into other areas of spaceflight while multiplying in value from hundreds of millions of dollars into billions of dollars. NASA now looks to private companies for not just cargo delivery to orbit, but with Crew Dragon, people. NASA also recently sought commercial services for sending supplies to the Moon and even landing humans there. What began as a pebble tossed into a pond has become a wave.

Critics of this commercial approach certainly remain—it has disrupted the business models of traditional aerospace powers like Boeing and Lockheed Martin, which have long profited from lucrative cost-plus contracts. Some at NASA, too, still dont trust commercial providers, and theyre especially wary of Elon Musk, the brash founder and chief engineer of SpaceX.

Yet it is Musk's firm that has delivered NASA a human-rated spacecraft in its hour of need, with Russia continuing to raise prices for rides into space nearly a decade after the space shuttles retirement. And if you speak with the NASA engineers who have worked alongside SpaceX engineers for more than a decade, they appreciate what the company has accomplished.

“This has been a great relationship for the both of us,” said Kathy Lueders, who manages the NASA program overseeing Crew Dragon. “Its been rewarding to see how our NASA teams have learned from SpaceX, and how the SpaceX teams have learned from NASA. Together, we have become stronger for this nation.”

At times, their cultures have clashed. SpaceX relentlessly seeks to innovate, cut costs, and move fast; the space agency is far less nimble and much more risk averse. Yet the coming together of Americas space agency and its most audacious space company has borne fruit and benefited both. NASA has provided money and advice, SpaceX has delivered the goods.

It has not been an easy road to get here.

"Utter horse pucky"

Even before Griffin offered funding for private spaceflight he faced concerns about “commercial” space. Change is hard, and some critics legitimately believed the private companies were simply not ready to supplant NASA for mission critical functions.

Up until then, for big human spaceflight projects, NASA engineers had decided precisely what they needed, selected a contractor to build it, and then monitored every step with paperwork in triplicate. For this, the contractor got reimbursed for its costs, plus a generous fee. If a vehicle ran five years late and doubled its original budget, NASA was on the hook for cost overruns. This tended to not encourage on-time delivery, but eventually the government got what it wanted.

Griffin's "commercial" space proposed a different way. Instead of beginning with a detailed blueprint for what a contractor should build, NASA would stipulate the service it wanted. For “commercial cargo,” NASA sought the delivery of a few tons of food, water, supplies, and science experiments into orbit. But it did not tell the private companies how to do this. Instead, they were left to design their own vehicles to meet this need. NASA would pay a fixed price for these services, and no more. In return the companies retained ownership of their spacecraft.

“In my own mind, I envisioned it as being somewhat like the arrangement when you build an expensive custom home,” Griffin explained in 2013. “The contractor builds homes for a living, Im not creating the contractors company. He has to have a company before I will consider allowing him to build a home for me. He builds his homes, and if I like them, I can buy a design that he offers. At different stages of completion he gets money from me if hes building my home, but he doesnt get all the money until he has furnished all the product.”

Griffin faced opposition to this within his own administration even before he awarded contracts to SpaceX and Orbital Sciences to begin designing and developing their cargo spacecraft. Often, senior officials at NASA came and went between the agency and large contractors. This allowed the old-guard aerospace contractors, long accustomed to cost-plus contracts, to maintain some control over the direction of the agency.

The career of Scott Horowitz is illustrative. From 1996 to 2001, the US Air Force Colonel and NASA astronaut piloted three shuttle missions and commanded a fourth one, helping to service the Hubble Space Telescope and supply the space station. He left NASA in October 2004 to take a senior position with ATK, which built the solid-rocket boosters for the space shuttle. Horowitz held this job for about a year before returning to NASA to become chief of a new division that supervised the agencys lunar exploration plans, known as Constellation.

Back at NASA, Horowitz helped shape strategy for the Moon plan, which included a new rocket named Ares I to launch crews into orbit. Ares I would use some of the same technology that powered the shuttle—a modified shuttle solid rocket booster would serve as its first stage. Accordingly, in April 2006, NASA awarded a $1.8 billion contract to Horowitzs old company, ATK, to begin design work. So closely tied to the former astronaut was Ares I that it soon earned the nickname “Scotty Rocket.” One year after the award to ATK, Horowitz left NASA. Then, from 2008 to 2010, ATK paid him $100,000 in lobbying fees. (Horowitz could not be reached for comment).

Horowitz also emerged as one of the chief critics of NASA's efforts to commercialize aspects of spaceflight. An oral history interview Horowitz later gave to NASA provides a sense of the hostility he and some agency leaders had toward commercial space companies. The interviewer, Rebecca Wright, asked Horowitz about NASAs claim that the commercial cargo program had helped it develop robust and cost-effective launch services for the space agency.

“That statement is complete and utter horse pucky," he responded.

Horowitz then asserted that the Ares I and SpaceXs Falcon 9 rocket had similar costs, citing a 2009 test flight of an Ares I prototype. “Interesting point—when we flew Ares I-X, which flew right after I left, (NASA) went back and did a total cost analysis—full-cost accounting, government, all of our waste and all of our overhead. The number I saw was about $400 million to fly that flight,” he said. “The cost to get to the first Falcon 9 flight was about $400 million.”

This comparison between the Scotty Rocket and the Falcon 9 rocket is jaw dropping, and not in a good way. But before explaining why, it's vital to understand how NASA went from commercial cargo flights to the larger step of allowing private companies to launch humans.

From cargo to crew

By the end of 2008, both SpaceX and Orbital Sciences were well on their way to developing spacecraft—Cargo Dragon and Cygnus, respectively—and NASA felt confident in moving forward with awarding contracts for actual cargo delivery services. SpaceX received $1.6 billion for a dozen missions, and Orbital $1.9 billion for eight flights.

As President Obama came into office in January, 2009, he was inclined to further the commercial efforts begun under the Bush Administration. He and his vice presidential candidate, Joe Biden, had even campaigned on it.

“We want to reinvigorate our national space program and that includes creating an environment for a vibrant commercial space program,” Biden had said at an October campaign stop in Florida.

After reviewing NASA and its spaceflight efforts, President Obama did indeed cancel the Ares I rocket, opting to make Orion a deep space capsule only and relying on commercial companies to fly humans to the space station. (The cancellation of the Scotty Rocket in favor of commercial providers probably explains Horowitz's antipathy). As the Obama administration pushed this idea, Congress pushed back. Many members were not ready to cede that much authority to emerging private companies such as SpaceX.

Push came to shove in 2010 as NASA sought Congressional funding for companies to begin developing spacecraft to launch humans. During that same year, SpaceX was preparing to fly its Falcon 9 rocket for the first time. This was a demonstration mission for the booster needed to loft its Cargo Dragon into orbit. In April 2010, President Obama visited SpaceXs launch site at Cape Canaveral Air Force Station, a vote of confidence for the company. At the time, SpaceX had a decidedly mixed record of success. It had failed on three of five launches of a smaller rocket.

Behind the scenes, the deputy administrator of NASA and a handful of other advisors pressed the president to keep the faith aRead More – Source

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