Rocket development costs - a case study


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This should prove illustrative as to how much of a cost difference there is between private and government development projects.

The final figures are in for the development of SpaceX's Falcon 9 launcher. These costs include the development of the Merlin 1 engine series, including the MVAC vacuum version, the Draco thrusters, the Falcon 1 testbed, 2 launch pads including infrastructure (Marshall Islands & KSC), 2 launch control facilities, Falcon 9 itself, test launches etc. The works.

There are 3 figures;

NASA: what it would cost using NASA culture & methods

NAFCOM: NASA-Air Force COst Model - used for Atlas V & Delta IV

SpaceX: their actual costs as calculated by the auditors

Here's what they came up with -

NASA: $3.977 billion

NAFCOM: $1.695 billion

SpaceX: $0.453 billion

Kinda says it all.

As for their vertical integration, making most things themselves, SpaceX estimates that for every $1 spent rolling their own hardware it would cost from $3 to $5 to outsource it.

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Yes but Government anything has to go through so many hands for every step that it makes everything cost so much more for anything to get done, not to mention they overpay for a lot of things just because they are the government.

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That's precisely the point. This project used a different model - a way for NASA to reduce its outlays in return for SpaceX having greater autonomy. Instead of micromanaging every step NASA just set milestones and defined an end capability then turned SpaceX loose.

They did the same for Orbital Sciences smaller & not man-rated Taurus 2, but its figures aren't in yet as it hasn't flown.

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