Counting the Costs of EELV

Delta IV Heavy Credit  :

Delta IV Heavy
Credit :

The GAO has released its annual Defense Acquisitions Assessment of Selected Weapons Programs report(PDF), and as usual, it portrays a defense establishment which seems to confirm President Dwight D. Eisenhower’s  worst predictions.  Among the gems where defense space programs are concerned, here are the winners, with the growth in current estimated total acquisition cost versus the original program estimates.

Space Based Infrared System High Component  (SBIR) : 298.8%

Wideband Global Satcom: 235%

Advanced Extremely High Frequency Satellite: 104.9%

Other programs such as GPS III  (4.5%)  are fairing much better.

And then there is the Evolved Expendable Launch Vehicle Program, which has experienced 235% cost growth since the original estimates in 1998.  The unit costs have increased from the original estimate of  $98.7 million, to $381 million as of March, 2012.  But it doesn’t stop there :

From the report :

Following re-designation as a major defense acquisition program in March 2012, the EELV program reported two critical Nunn-McCurdy unit cost breaches, which resulted in a reassessment of the program. The estimate of the acquisition costs for the restructured EELV program is $69.6 billion based on the need for 150 launches through 2030. This estimate is $34.6 billion more than the current cost estimate reported in the Selected Acquisition Report of March 2012 which estimated costs up to the year 2020. The program identified several causes for this cost growth including extension of the program life-cycle from 2020 to 2030, procurement of additional launch vehicles—from 91 to 150, the inherently unstable nature of the demand for launch services, and industrial base instability.”

Notably, the unit cost increased again, this time to $464 million.

That number will presumably come down somewhat later this year, when a new acquisition strategy, a modified block buy requested by and granted to, United Launch Alliance is introduced, but how much remains to be seen.  While the unit cost of the Air Force EELV program does not directly correspond to the price of the Atlas V and Delta IV launch vehicles offered to NASA as part of the National Launch Services (NLS)  II program,  or to other parties, there is still a strong correlation,  and that is why the saga of the EELV program and its unconstrained and poorly justified cost growth are very relevant to the overall space community, particularly in the light of what SpaceX has achieved with the EELV class Falcon 9.

Apologists for the EELV program, and for ULA have on occasion suggested that any comparison drawn between the prices offered by SpaceX and those attributed to ULA’s products are both invalid due to the limited launch history of the former, and  worse, indicative of a desire to bypass the Air Force’s  New Entrant  Certification process and immediately  assign upcoming launches of very expensive national security assets to SpaceX on the basis of price without regard for the risk involved.

On the contrary, the critical point is revealing just how far out of reason the costs of the EELV program have climbed,  and the extent to which the policy of both subsidizing ULA in the form of the Launch Capabilities Contract, and protecting it from competition, has failed.  And while it should be noted that there is a certain self-serving irony in defense contractors regularly blowing budgets, resulting in even more expensive space hardware, and then justifying holding on to the launch business on the basis that hardware is so expensive, assigning launch contracts to new entrants without a sound history would in fact be a mistake. The relevant question is what constitutes a “proven” history.

As for the one area where the EELV program has achieved undeniable successes, launch reliability, here is a question tied to the ongoing justification that reliability comes at a price.

Are the systems 235% more reliable now than when they first launched in 2002?  Better yet, did reliability increase again by 22% along with program unit costs in the last year alone?

Probably not considering the fact that the Delta IV has been grounded since October while the Air Force investigates the upper stage engine anomaly which easily could have resulted in a flight failure had it been carrying a heavier payload.

Part of the issue with EELV is that unlike other cutting edge space acquisition programs highlighted in the current GAO report,  it is comparatively not very cutting edge, but more importantly, also not just a defense program.  And that’s where it really comes up short. In steadily raising the costs of  space launch, the EELV program and its two primary products, the Atlas V and Delta IV have had a well documented and deleterious  effect on NASA’s overall launch capacity (witness the withdrawal from Exo-Mars) for space science, but also something more.

NASA is set to release its FY2014  budget request tomorrow, and by all accounts SLS (and Orion) will continue to receive vigorous funding, while,  Commercial Crew will once again be cut almost in half.  For all those who bemoan the disastrous effect the SLS/Orion program is having throughout the NASA budget, and particularly in the Science Mission Directorate,  there is this to consider;  by exploding in costs when it did,  the EELV program made it all too easy for supporters of SLS to readily dismiss alternative architectures based on fuel depots or other missions based on enhanced use of the Delta Heavy.

Going beyond immediate effects and debates over alternate space exploration architectures which are not likely to see the light of day, there is one more aspect to counting the true costs of the EELV program. Viewed from the perspective of the civilian space launch industry on which it was partially justified, the continual  upward trajectory of EELV costs over the last decade signifies a major failure of the notion that things should be getting better, that the cost of access to space, while fluctuating on an annual basis, should be gradually coming  down as technology improves and experience builds. Instead it is just the opposite,  and as the costs of launch increase, and budgets remain flat or declining, the future (absent SpaceX) looks progressively  dimmer, and that is EELV’s greatest sin.

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  1. Coastal Ron says:

    Your summary at the end is very depressing… and very true.

    Having worked for large government contractors, it is in their nature to maximize the profit they can get from their customers, which are usually various programs within the U.S. Government. A nickel here, a $Million there – it does add up.

    The only way to hold down costs is to ensure there is competition, but that is not going to happen when the incumbents know this, and they have more money to spend in the halls of Congress than the companies that want to inject competition into routine government services.

    Until that changes – until real competition is the norm in transportation to space – we’re not going anywhere in space.

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