How to fix US Space Projects and Defense Programs Costs that are ten to one hundred times too high

James Wertz of Microcosm presented at the Future In-Space Operations (FISO) Working Group on Reinventing Space–Why Aren’t We There?

The focus of the FISO talk is on the high costs of the US space program but the problems identified are the same reasons that the US defense programs are so expensive.

The F35 program could end up costing $1.5 trillion.

The Joint Strike Fighter program was designed to replace the United States military F-16, A-10, F/A-18 (excluding newer E/F “Super Hornet” variants) and AV-8B tactical fighter aircraft. To keep development, production, and operating costs down, a common design was planned in three variants that share 80 percent of their parts:

F-35A, conventional take off and landing (CTOL) variant.
F-35B, short-take off and vertical-landing (STOVL) variant.
F-35C, carrier-based CATOBAR (CV) variant.

According to some 2010 estimates, overruns could increase the program’s total costs to $388 billion, a 50% increase from the initial price tag. Many of the program’s financial and technical complications result from the Marine version of the JSF, capable of vertical take-offs and landings. The cost of each F35A was estimated at $50 million in 2002. In February 2011, the Pentagon put a price of $207.6 million on each of the 32 aircraft to be acquired in FY2012, rising to $304.15 million if research was included. In 2013, the cost of each F35A is about $125 million.

The problems also exist in other aspects of Federal procurement. The Obamacare federal government enrollment system has cost over $2 billion.

Over the last 5 years, space systems launched by the United States have cost an average of $3 billion per launch (including infrastructure costs).

Problems for US Space and how to fix it

There is a long-term need to do more in space with fewer $$$ — this is what drove the creation of the Responsive Space / Reinventing Space Conference in 2003.

Space is remarkably useful, in some cases critical, for military, civil, and science missions

Space has also become remarkably expensive
• $500 million can buy you a newly recreated Titanic ocean liner, or a smallish spacecraft

The Reinventing Space website is here

What are the consequences of reducing the cost of your program by a factor of two in order to allow other activities to proceed?

– Any future problems will be blamed on your cost-cutting
– Your budget will be cut in half and the money will be used to cover the cost overrun on the program next door
– You lose half your staff who either move to another program or are laid off

• Your boss warns you not to eat the cake at your going away party unless you have someone else taste it first
– Your prime contractor lays off 1000 people and 3 small companies close down

• You run into the Congressman from the prime contractor’s district who tells you that you’ll never get a job in industry in the next 50 years, especially if he has any sway

– The program manager coming in behind you blames you for everything that could possibly go wrong and promises to try to make sure you never get promoted

• The same things happens if you’re the President of a major prime contractor or the Director of a NASA center that dramatically reduces cost, except that the people who are mad at you have more clout

In the last 5 years, the United States launched a bit less than 100 space missions, i.e., about 20 per year

The combined US space budget (NASA, DoD, the Intelligence Community, and a few others) is on the order of $60 billion/year

Over the last 5 years, space systems launched by the United States have cost an average of $3 billion per launch (including infrastructure costs).

Below 500 km, there is no long-term orbital debris problem
Low altitude satellites have a much lower probability of collision with debris than
higher satellites and cannot contribute to the long-term debris population.
– If a debris cloud is created, it will last for anywhere from a few weeks to at most the time until the next solar maximum

Pragmatic Approaches

* Make greater use of smallsats for test and operations
• Smallsat Constellations can do things that aren’t realistic with far more expensive systems
• Example: a constellation of 12 smallsats can provide coverage of any one location on Earth every 20 min, 24 hrs/day at a fraction of the cost of a single large satellite

• Make cost data known
– An obvious and simple approach to reducing cost, but very hard to implement
– Nonetheless, it is very hard to reduce cost when cost data is known, and virtually impossible when it’s not

• Reduce the cost of failure
– The space spiral pushing costs higher is driven largely by the fear of failure
– By doing more low-cost testing and more low-cost missions, we will reduce the inherent risk
– Soviet launchers had many initial failures, followed by an excellent success record

• Compress the schedule
– Means we must also reduce the amount that is done to avoid killing the engineers

• Provide continuous, stable funding

Achievable Goals

– Reduce space mission cost — by a factor to 2 to 10
• Initial cost reductions within 12–24 months
• Major reductions within 24–36 months
– Reduce the schedule for new programs — from decades to months or years
– Reduce the cost of access to space — by a factor to 2 to 5 initially, 4 to 10 in the longer term
– Provide responsive launch (within 8–24 hours) to respond to natural or man-made disasters
– Provide frequent, low-cost access to space for education, innovation, and testing

SOURCE – Future In-Space Operations (FISO), James Wertz of Microcosm, CNBC, Wikipedia, Bloomberg, SMAD

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