Commercial Aerospace Takes the Lead | Citizens Against Government Waste

Commercial Aerospace Takes the Lead

The WasteWatcher

The weekend marked a significant milestone for American aerospace, one made possible by steps taken to empower commercial spaceflight.

On May 30, 2020, American astronauts were launched from U.S. soil for the first time since 2011 by SpaceX.  The mission, named Demo-2, transported two National Aeronautics and Space Administration (NASA) astronauts in SpaceX’s Crew Dragon capsule for a tour of duty on the International Space Station (ISS).  It was the final test prior to NASA certifying SpaceX for regular service to the ISS.

NASA had previously been reliant on the Russian Soyuz program to transport astronauts to the ISS.  At $55 million per astronaut, SpaceX costs 38 percent less than the $86 million per person charged by Russia.

Over the next decade, astronauts will be transported to the ISS under NASA’s Commercial Crew Program (CCP).  Two companies won contracts under the CCP, Boeing, which has long dominated the space launch industry, and SpaceX.  However, a November 14, 2019 NASA Office of Inspector General (OIG) report found that the latter company provided service at a far cheaper rate.  According to the report, NASA will pay Boeing $90 million per astronaut for a ride to the ISS, or 64 percent more than the $55 million per seat for SpaceX. 

This reflects a disparity in the total value of the contracts awarded to the companies.  The OIG estimated Boeing’s contract to be worth $4.3 billion, while SpaceX will be paid $2.5 billion for the same service.  Boeing’s funding included $2.2 billion for technology development and test flights, $1 billion more than SpaceX.

Beyond providing a cheaper alternative, SpaceX has proven more reliable.  During its December 20, 2019 maiden launch to the ISS, Boeing’s Starliner crew capsule was unable to dock.  The unmanned capsule had been carrying cargo to the ISS.  On February 6, 2020, a NASA safety review panel found that Boeing averted a “catastrophic failure” that was unrelated to its failure to dock.  On April 6, 2020, Boeing stated that it would rerun the unmanned Starliner test flight prior to transporting astronauts.  One month earlier, SpaceX successfully completed its 20th ISS resupply mission.

SpaceX has made a name for itself by disrupting what was once a closed market, undercutting entrenched contractors.  The company has become a major player in the National Security Space Launch program (NSSL), which carry satellites into orbit for the Department of Defense and other security agencies.  However, it was initially blocked from bidding for contracts, and only a lawsuit filed in April 2014 opened up the competition. 

Since that time, SpaceX has proven to be a more reliable provider at a far cheaper price.  The company is one of four being considered in the next round of NSSL launch contracts, with two winners set to split 34 launches over five years starting in 2022.  Joining SpaceX in the competition are Blue Origin, Northrop Grumman, and United Launch Alliance, a joint venture between Boeing and Lockheed Martin.

For far too long, American aerospace has been dominated by a handful of entrenched firms, enabled by institutional biases and preferentially written contracts.  The end result has been inflated prices and a lack of innovation.  A main argument for the legacy contractors had been their reliability, which no longer holds water.  The inclusion in the next round of NSSL contracts of two new entrants is an immensely positive sign for the future of aerospace.

SpaceX’s success over the past decade speaks for itself.  Further removing barriers to entry and allowing open competition will enable additional cost savings and increased performance.

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