Hold On A Minute! SNC Files New Motion for Dream Chaser

Still Holding On:  Image Credit Sierra Nevada Corporation.

The Wall Street Journal (yes, Andy Pasztor) reports that Sierra Nevada has taken its protest of NASA’s Commercial Crew award to a new level. According to the story, SNC has filed a motion with the U.S. Court of Federal Claims in Washington, D.C. seeking to prevent NASA from making payments to SpaceX and Boeing while the award is still under the protest process with GAO.

NASA originally issued a stop work order to both SpaceX and Boeing following the September 26 protest, but on October 9 rescinded the order after determining that doing so was within its statutory authority.

What is of particular note in the WSJ story, which is again based on source selection documents which seem to have been selectively leaked, is that SNC is claiming NASA did not follow its own guidelines in properly weighing cost factors at 50%.

From the story:

“The court filing, according to one person familiar with the specifics, alleges that NASA in the end failed to give enough weight to the price difference and instead relied too much on other factors, including likelihood of meeting schedules, which Sierra Nevada contends weren’t part of the criteria in the request for bids. Price was supposed to account for half the score assigned to the bidders.”

However,  “The decision memo, signed by William Gerstenmaier, head of NASA’s manned programs, indicated that Sierra Nevada’s price advantage had to be considered in light of what he described as “the lowest level of maturity” for the company’s design. The Dream Chaser, according to the memo reviewed by The Wall Street Journal, faced “significantly more technical work and critical design decisions” than its rivals, and also entailed more schedule uncertainty.”

The WSJ also sheds some more light on the cost differential between the bids, stating:

“Meanwhile, an analysis of the base bids submitted by Boeing and Sierra Nevada indicates the price difference for the last three missions could amount to nearly $50 million per flight, according to one person familiar with details of the bidding process. Boeing’s price potentially could reach $300 million for one of those roundtrips to the orbiting laboratory, this person said.”

Prior to the bids, Innerspace predicted the Boeing bid would come it at $257 million per flight. If the individual referenced in the WSJ piece is accurate, then post development, the Boeing bid may actually be more than twice as expensive as that tendered by SpaceX, which has repeatedly stated its price would be $140 million per flight. Even those numbers would not be strictly accurate in terms of cost to the taxpayer however, as the Boeing and well as the SNC entries are also receiving an entirely separate benefit which comes to the ULA Atlas V through Air Force EELV program’s Launch Capability Contract, which pays the company just under $1 billion per year, irrespective of the number of launches it actually performs. ULA bristles at the term “subsidy” but to many, that is precisely what it appears to be.

On a related note, in the process of trumpeting highly questionable cost “savings” as part of the 36 core block buy, (which is the subject of an entirely separate lawsuit currently under mediation) ULA stated that as a result of streamlining and bulk purchasing, the cost for a bare bones Atlas V would drop to just under $100 million. The argument could be made that by successfully pursuing and winning the block buy, ULA has managed to achieve an entirely different sort of pricing advantage which also is not available to SpaceX in the Commercial Crew competition. Absent that, as well as the launch “subsidy,” the pricing differential would be greater still.

One place where the WS piece appears to be in error however, regards an assumption that NASA plans on spending $6.8 billion on Commercial Crew through the end of the decade, a number which seems to come from simply adding the $4.2 billion maximum potential award to Boeing to the $2.6 billion same to SpaceX and calling it a day.

It is not that simple. The awards are for product development, a test flight, and up to six operational flights, as well as very small amount for additional requested testing. Quite simply both teams are not going to win six flights through the 2020 time frame, as NASA only projects two Commercial Crew flights per year through 2020, and an ISS extension through at least 2024 has only been proposed, not approved.

To wit, here is the Commercial Crew budget taken from NASA’s FY 2015 Request. (Out years are notional)

comcrewbudget

That is why Innerspace has contended that the ultimate winner will not be who gets the higher amount in a “potential” award, but who actually is awarded the most flights. Again if the per flight projections of up $300 million a mission for CST-100 are indeed correct, and SpaceX is on time, Boeing is going to be in a world of hurt. Presumably, Boeing then priced this risk into the development portion of its proposal, driving its overall price even higher, and providing a piece of the explanation for why the arguably more primitive capsule assembled from “proven” components is so much more expensive than its Dragon competitor. Tying the two stories together, this may have a great deal to do with what appears to be an effort on the part of some Republicans in Congress to shove SpaceX out the door.

The WSJ may be right one critical point however. Based on the numbers projected, and with Congress highly likely to cut them further, it is difficult to see a path towards fully funding two entrants, even if one is Sierra Nevada and the Dream Chaser.

 

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1 Comment on "Hold On A Minute! SNC Files New Motion for Dream Chaser"

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  1. Totally agree with everything here, and my comment some weeks ago on the original SNC lawsuit still holds: if the stated criterion were used, SNC has a makable case.

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