For the last five years, United Launch Alliance (ULA), the joint venture between Boeing and Lockheed Martin, has been the sole source provider of launch services to Department of Defense (DoD) and National Reconnaissance Office (NRO) for medium and heavy lift. Despite steadily rising launch costs, the company has maintained its position based on the performance and reputation of its two vehicles, Atlas V and Delta IV, and the lack of viable competition. That position is now under threat, principally from SpaceX and its own EELV-class vehicle, the Falcon 9. With two successful flights under its belt, and a third high-stakes flight now scheduled for February, the Falcon 9 offers a compelling alternative to the ULA products both in terms of pricing and its 100% US production.
In the closest apples-to-apples comparison based on vehicle performance, which is a Falcon 9 versus an Atlas V 401, the SpaceX vehicle is priced for 2013 on the company’s website for all the world to see, at $54–59.5 million for a commercial flight, while a government flight would also include mission assurance fees of around 20%. Pricing for the comparable Atlas is much more obscure, but is frequently cited in a range of $150–180 million. A full accounting, however, would have to include a portion of the billion-dollar-a-year launch capability subsidy that ULA receives under a second contract, which would add at a minimum another $120 million to the price, bringing the total to a staggering $270–300 million. Even under the most conservative estimates, the Falcon offers a three-to-one price differential.
For the moment, at least, ULA’s advantage lies in the fact that the current Falcon 9 does not possess the capability of launching the larger defense payloads. That advantage may prove fleeting, though, as SpaceX both upgrades the Falcon 9 with Merlin 1D engines, and moves closer to the first flight of its Falcon Heavy, which poses a mortal threat to ULA as it offers a launch capability greater than the largest ULA product, the Delta IV Heavy, at a price which is still less than the smallest Atlas V 401 configuration.
An important issue is whether the Falcon 9 can achieve the reliability necessary to launch the most critical national defense and scientific payloads with the same degree of confidence that is bestowed on the Atlas V and Delta IV. This quite rightly is a feature not to be haggled away over price, particularly for one-of-a-kind type missions such as the just-launched Mars Science Laboratory. Nevertheless, the massive cost differential between SpaceX and ULA, as well as the obvious inefficiencies in the cost-plus-fee format highlighted in both the NAFCOM model and the GAO report, present a conflict that must be resolved in favor of both the future and the taxpayer. It is time to ask the question: which is the more likely alternative, that SpaceX would develop a successful launch history with the Falcon 9, or that ULA would achieve a 65% price reduction in the price of its vehicles, while foregoing its launch assurance subsidy?
With NASA, for better or worse, focused on developing the Space Launch System, it falls upon the EELV program to be the primary agent of change in picking up the mantle of reduced cost that it carried once before. Fortunately, this time around, there is no heavy lifting required, no rocket to develop, and no launch subsidies to pay. The only requirement is that it manage launch opportunities in a reasonable and equitable manner with a weather eye to the future.
An accelerated transition to competitive bidding would not only reduce program launch costs, but would also eventually increase the total number of new launch opportunities.
Ten Questions for Elon Musk back in 2010
Brian Wang is a Futurist Thought Leader and a popular Science blogger with 1 million readers per month. His blog Nextbigfuture.com is ranked #1 Science News Blog. It covers many disruptive technology and trends including Space, Robotics, Artificial Intelligence, Medicine, Anti-aging Biotechnology, and Nanotechnology.
Known for identifying cutting edge technologies, he is currently a Co-Founder of a startup and fundraiser for high potential early-stage companies. He is the Head of Research for Allocations for deep technology investments and an Angel Investor at Space Angels.
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