Annual GAO Report Highlights Exploding Costs of EELV

“Over the past year, the 80 programs of the 2013 portfolio have grown by a total of $12.6 billion, a net cost increase nearly all attributable to the significant procurement cost associated with one program—the Evolved Expendable Launch Vehicle.”

And that’s just from the front page.

In what is becoming a repeated annual refrain, the newest GAO Defense Acquisitions: Assessments of Selected Weapons Programs report highlights the staggering cost of the Evolved Expendable Launch Vehicle Program courtesy of United Launch Alliance. After debuting at a unit cost of approximately $101 million per launch in 1998, the average cost of an EELV launch as of 8/2013 works out to $420 million.

As can readily be seen from the chart, the procurement costs have increased dramatically, more than $45 billion over the original baseline, even though the number of launch cores procured has declined by 29.

These figures come in spite of the ULA promoted block buy which was supposed to lead to a reduction in costs.  While the company and some supporters in Congress have sought to portray the block buy as actually resulting in savings, further analysis has shown that the reported “savings” come from reductions in an artificially elevated baseline.

From the report:

“The estimated costs for the program are about $70 billion based on the need for 151 launches through the year 2030. This estimate is around $35.7 billion more than the previous estimate reported in March 2012. The program identified several causes for this cost growth including extension of the program life-cycle
from 2020 to 2030, procurement of 60 additional launch vehicles, the inherently unstable nature of
the demand for launch services, and industrial base instability.”

Note the circular reasoning behind the cost increase.  ULA’s demand for launch services is unstable because it has priced itself out of the commercial market. Any instability in the industrial base is due to that fact.

There is another aspect of the report which is also interesting.  Because the EELV program has continued to support a two booster strategy, with each booster being offered in multiple versions, there have actually not been enough flights of many of the versions to qualify under the 3/7 reliability rule which the Aerospace Corporation uses as a guidepost to determining a system’s overall maturity.

According to the convention, a vehicle which has completed three successive flights without a failure can be considered as a having a mature design, whereas one which has flown seven consecutive times can be considered as having a mature manufacturing process. In following its “dial a rocket” strategy of different payload fairings and different booster configurations with varying numbers of solid rocket boosters to help get off the ground, the EELV program has created 14 possible combinations of which only three have completed at least seven launches.

To paraphrase a popular dog shaming picture; “this is the reason why we can’t have nice things.”


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