SpaceX cargo launches may soon cost 50% more - but it's still an offer NASA can't refuse
- Government auditors published a new report about NASA's commercial spaceflight program that focuses in part on SpaceX, the rocket company founded by Elon Musk.
- The report says sending cargo to and from the International Space Station may soon cost NASA about 14% more per kilogram.
- It also said that SpaceX will increase its price about 50%, due to new NASA requirements that forced the company to redesign its Dragon cargo spaceship.
- But SpaceX missions will still be cheaper than its competitors' and do things other companies can't.
- The report pins most of the blame on NASA for the cost increase.
A new NASA report has revealed that SpaceX, the rocket company founded by Elon Musk, is raising the price it charges the agency to launch cargo into space by roughly 50%.
Auditors at NASA's Office of Inspector General have posted a 55-page report about a program that pays private companies like SpaceX to ship supplies to the International Space Station. As Ars Technica reported, the analysis focuses on the costs and risks of a second round of contracted missions for NASA's Commercial Resupply Services program, known as CRS.
Its conclusion is blunt: NASA may pay 14% more per pound to launch food, water, and experiments on commercial spaceships for this second round of missions (from 2020 through 2024) than it did for the first round of CRS missions that occurred between 2012 and 2019. It ascribes most of that increase to SpaceX's price hike.crushing cost of access to space. Instead, the auditors pinned much of the blame on NASA for the increase. They also emphasized that the program still seems like a good deal for lowering launch costs.
NASA's rising costs
Auditors cited NASA for missing opportunities to cut redundancies and bargain on pricing, and noted that the agency forced SpaceX to (expensively) redesign its Dragon spaceship from the bottom up.
The report did hint, however, that SpaceX has done some reckoning as the startup has matured.
"[SpaceX] also indicated that their CRS-2 pricing reflected a better understanding of the costs involved after several years of experience with cargo resupply missions," the auditors wrote. (A SpaceX representative declined to comment on the report.)
Despite the cost increases, the report ultimately called the CRS contracts with private companies "positive steps" for NASA - especially since the agency could find discounts by launching cargo on used SpaceX Falcon 9 rocket boosters.
"NASA's continued commitment to the commercial space industry also helps spur innovations in the commercial launch vehicle market," the auditors said.
Why NASA pays companies billions for cargo and taxi services
When the government decided to retire NASA's space shuttles, the agency had to figure out a way to continue sending astronauts to the space station.
So NASA's administrators started funding independent aerospace research and development. Getting private companies to design, build, and launch new rockets and spaceships, the thinking went, would be faster and cheaper than any bureaucratic government program.
NASA set up its first competitions for contracts in 2006 - years before the shuttle program's retirement in 2011. The agency wanted companies to essentially build space taxis and trucks. Industry titans like Boeing and Lockheed Martin balked over the relatively small pool of money ($500 million over 5 years), giving SpaceX an opening to develop its Falcon 1 and Falcon 9 rockets, as well as its Dragon and Crew Dragon spaceships.
The millions of dollars in contract awards helped fuel the rise of Musk's company, which now increasingly out-competes familiar aerospace industry players on price, capacity, frequency, and capability.
SpaceX has rocketed 14 cargo missions since 2012. And in a related program, SpaceX and Boeing plan to launch astronauts within a year - potentially ending NASA's increasingly costly reliance on Russia for space taxi service.
So far, the average costs of launching cargo remain on par with the space shuttle at about $30,000 per lb. (The space shuttle cost about $1.5 billion per mission, including development, and could carry up to 50,000 lbs of cargo.)
The issues NASA auditors found
Business Insider/Julie Bort
NASA awarded CRS2 contracts to three companies in 2016: SpaceX, Orbital ATK, and Sierra Nevada Corp. Each had a minimum of six launches.
Together, the awards are worth up to $14 billion through 2024, depending on how many milestones each company hits and the missions they successfully launch.
To see if NASA was on the right track, auditors dug into the mistakes of CRS1 and the potential problems with CRS2.
The report found that CRS2 will cost $400 million more than CRS1, even though it'll deliver 13,200 lbs less cargo to space. Part of the reason for the price increase, auditors said, was NASA's decision to pick three contractors. Although the move protects NASA if any one system fails, the policy increases the overall cost of the program. (Fewer companies doing more missions would make launches more efficient and lower-cost.)
How the three NASA contractors stack up
The auditors noted that one company, Sierra Nevada, only has one of its Dream Chaser spaceplanes so far, and that it's not even a flight-proven spacecraft yet.
Orbital ATK, it said, has essentially cut its per-pound launch costs with Cygnus by about 15%, though primarily in response to launch-price competition from SpaceX.
The audit had the most to say about SpaceX.
The company's per-pound launch costs may rise by 50%, it said, primarily because NASA wanted more cargo space and capability from SpaceX's Dragon spacecraft.
Though more pricey, SpaceX's new-and-improved Dragon 2 cargo spaceship has 30% more volume for cargo, can pull off much longer missions in space, and will help scientists get their experiments back to Earth and into a lab for analysis more quickly.
SpaceX is currently the only company able to bring things back from space - Orbital ATK's Cygnus spacecraft burns up on reentry to Earth, and the Dream Chaser has yet to prove it can safely fly to and from space. But the auditors didn't consider that added value in their analysis.
They did, however, recommend that NASA look into booking launches with SpaceX's reusable Falcon 9 boosters, which could earn the government a discount of millions of dollars.
The next NASA-funded mission to resupply the space station is a SpaceX launch that's currently scheduled for June 28. It's the company's 17th Dragon launch and its 15th resupply mission, and is expected to deliver 7,310 lbs of cargo to astronauts.