A Look at Cost Overuns and Schedule Delays in Major Space Programs

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OSC's Cygnus freighter approaches the International Space Station. (Credit: OSC)

As part of Parabolic Arc’s ongoing Fun With Numbers Mega Tour 5000, we’re taking a look at cost overruns and schedule delays in NASA’s COTS and Orion programs and Virgin Galactic’s suborbital space tourism project. We’ll draw some conclusions about how progress in these programs bodes for the much larger commercial crew efforts.

The results may surprise you. Or not. But, they won’t be boring.

Ready to have some fun? OK. Allons-y!

NASA’s COTS Program (Public/Private)

Company/Agency System Original COTS Amount Revised COTS Amount Increase in COTS Amount Original Demo 1 Flight

Demo 1
Flight

Schedule Delay
SpaceX/NASA Falcon 9 Dragon $278 million $318 million $40 million September 2008 December 2010
(Actual)
2 Years, 3 Months
Orbital Sciences Corporation/NASA Taurus II Cygnus $170 million $310 million $140 million December 2010 December 2011 (Projected) 1 Year (Projected)

SpaceX and Orbital Sciences are both running behind schedule. To help move the programs forward, NASA has been adding payments for additional milestones this year, providing $40 million to each company to date. In addition, the space agency has agreed to pay for a $100 million “risk reduction” flight of the Taurus II in October without the Cygnus freighter.

In December, Orbital Sciences plans to launch Taurus II with Cygnus in the first Demo flight required to prove the system’s safety to deliver cargo to the International Space Station. SpaceX conducted its first Demo mission with Falcon 9 and Dragon last December. It has two additional Demo flights scheduled, the first to fly by the station and the second to be berthed with it. NASA is weighing a request from the company to combine the two flights into one on a mission set for launch later this year.

NASA’s Human Crew Vehicle (Public)

Agency/Company System Original Full Operational Capability
Projected Full Operational Capability
Schedule Delay
NASA/Lockheed Martin
Orion/Multi-Purpose Crew Vehicle (MPCV) 2009-2010 2016 6-7 Years

Under NASA’s original plan, the Orion vehicle was to be flying by the time the space shuttle was retired. However, with each passing year, the schedules for Orion and its Ares 1 carrier rocket slipped while the shuttle program suffered much shorter delays.This opened up a long gap in spaceflight that threatened to stretch five to six years. After receiving the Augustine Committee report detailing Constellation’s many problems, the Obama Administration decided to cut its losses by canceling both Orion and Ares 1 in favor of commercial alternatives.

Although Ares I has stayed dead (so far), the Orion moon ship has been resurrected under a new name (Multi-Purpose Crew Vehicle) with a similar mission (deep space exploration) by Congressional demand. Plans are to launch an unmanned version of Orion in 2013 aboard a Delta IV rocket, with human missions following in 2016. Although Orion seems to be coming along well, the key pacing item is once again….wait for it…the rocket. Congress wants NASA to use a HLV capable of lifting 130 tons to orbit; the space agency is not sure it can build it by the end of 2016, which is the deadline codified in law.

One thing to note: I didn’t include budget estimates in the above chart because exact costs are difficult to pin down given that Orion was part of the larger Constellation program and is now being retooled as MPCV. If anyone has a good source of accurate numbers, please let me know.

Virgin Galactic’s Suborbital Venture (Private)

Company System Estimated Cost Estimated Final Cost Increase From Original Cost
Original  Commercial Flight
Availability
Projected Commercial
Flight Availability
Schedule Delay
Virgin Galactic
WhiteKnightTwo /SpaceshipTwo $108 million $400 – $500 million $300 – $400 million 2007 2012-2013 5-6 Years

Virgin Galactic is essentially in NASA Constellation territory here in terms of cost overruns and delays, albeit on a much smaller budget. There are a number of reasons for why this has happened:

  • Overly optimistic initial estimates
  • Design changes and scope creep: WhiteKnightTwo/SpaceShipTwo is a much larger and more capable system than originally envisioned.
  • Technical setbacks: A fuel tank explosion in 2008 that killed three workers set back engine development significantly. Sierra Nevada Corporation was brought in to help Scaled Composites to develop the engine, a decision that couldn’t have been inexpensive.

Once a schedule starts to slip significantly, costs tend to rise sharply. One has to continue to pay a team of people  to build the vehicle for years longer than planned. Inflation raises the costs of materials. Meanwhile, you are not earning any revenues.

To help offset the costs increases, Virgin Galactic sold a 32-percent stake of itself to Aabar Investments, a group controlled by the Abu Dhabi government.

A Double Standard?

Despite the delays and cost increases in COTS and Virgin Galactic’s program, there has been little of the type of criticism that is directed at programs like Orion that fall seriously afoul of their original targets. Is a double standard at work here relating to commercial vs. government work? Sort of.

Virgin Galactic has largely escaped criticism due to its private nature, novelty factor, and strong PR campaign. If Richard Branson and some Arab shaikhs want to spend their fortunes to send themselves and Victoria Principal into space, more power to them. And if New Mexico wants to build Sir Richard a spaceport using their own tax dollars, hey, good luck with that. It doesn’t really bother anyone.

Suborbital spaceflight is a novelty that is as exciting to imagine as it is — at $200,000 per seat — irrelevant to the lives almost everyone on Earth. It will be really cool when they actually happen, but until then nobody really much cares. And until the flights come down significantly in price, they’ll be continue to be a fascinating curiosity to most people. Most of the media coverage has reflected this line.

Branson — the entrepreneur and impresario that he is — understands all this. He also knows that a video of WK2/SS2 flying over the New Mexican desert or the Golden Gate is worth a million dollars in publicity for him and his business empire. Delays allow the Virgin Group to cross-sell their other properties and services to the hundreds of wealthy individuals who have put down funds for trips into space. While you’re waiting, why not spend a week on Necker Island with Sir Richard? It’s only $15,000.

On the other side of the scale, COTS is about as dull as SpaceShipTwo is exciting. It involves cargo delivery. If you lose a Dragon or Taurus in flight, it’s just cargo. No astronauts involved. Nothing to get real upset about.

The COTS program also is not that costly, even with the additional funds that NASA is adding to the budget. Supporters of commercial space also point to the fact that these projects are coming in at costs well below the more traditional NASA-directed, contractor-built cost-plus approach used to building rockets and spacecraft.

The delays have not caused any problems with International Space Station operations — at least not yet.  The station’s supply needs are being met by a fleet that includes the space shuttle and a fleet of Russian, European and Japanese freighters.

NASA has added an additional shuttle mission to deliver parts and supplies, a flight that is very costly but politically popular because it keeps thousands of shuttle workers employed for a few months longer. The space agency has avoided the political problems associated with paying the Russians high fees to haul cargo into orbit. NASA will face a similar problem once the shuttle retires and Soyuz becomes the only way to get crews to ISS.

No More Free Rides?

Although NASA and their commercial partners have avoided major criticism for delays and program cost increases in COTS, it will have a much tougher challenge with the CCDev program in which private companies are competing to send crews into orbit. This involves astronauts, which means it’s a much more complex and high-profile venture.

The Constellation program was canceled on the premise that private contractors could deliver the same services in a faster, better and cheaper manner without any degradation in safety. Any significant cost overruns and delays in these efforts will bring a ton of criticism crashing down on NASA and the companies involved. A serious accident or loss of life resulting would cause a major re-evaluation of the program.

Any significant delays will increase the amount of time the ISS program is dependent upon a single system for crew access. Although the Russian Soyuz is remarkably reliable, good fortune doesn’t last forever. An accident that grounds the vehicle for any length of time prior to the restart of America’s human spaceflight could cause a major crisis for the 15-nation ISS program. And it would certainly raise questions about the wisdom of NASA’s experiment with commercial crew.

To avoid getting tied down to specific deadlines, and given the uncertainty involved in future COTS funding, NASA and most company officials are giving a vague “middle of the decade” estimates for the first human flights of their vehicles. SpaceX, which has received more than $300 million under COTS to develop its system, is giving a firm estimate of 2014 for the first crewed Dragon flight (contingent upon future CCDev funding). Given the delays the company experienced under COTS, that schedule could always slip.

Whatever happens, commercial space has move from the periphery to center stage through the CCDev program. NASA and the companies involved will be under a bright spotlight now. It will be interesting to see how well they can deliver.

  • michaelturner

    “On the other side of the scale, COTS is about as exciting as SpaceShipTwo is exciting….”

    I think you meant “COTS is about as UNexciting….”

    I’m not too surprised at the conclusion: taking the pork out of space vehicle development costs doesn’t really save all that much money or calendar time.

  • http://variousconsequences.com jstults

    I’m not too surprised at the conclusion: taking the pork out of space vehicle development costs doesn’t really save all that much money or calendar time.

    Whaaaa? Maybe I’ve been blinded by all the awesome spacex propaganda vids, but just compare the cost of a single Ares I-X test flight to the entire Falcon 9 development program (yes, yes, Ares I is designed for more capability, but it hasn’t flown yet has it?). Look at the impact on operations due to NASA’s standing army:

    In testimony to the House Appropriations Commerce-Justice-Science subcommittee on Tuesday, NASA Administrator Bolden said that the Ares I would cost $4-4.5 billion a year, and $1.6 billion per flight.
    How much would Ares I cost?

    There’s no way SpaceX could operate profitably like that. That is unless they continue to focus on COTS to the detriment of their real commercial customers. Then they get ‘captured’ into NASA’s orbit and become BoLockMarTK Jr.

  • http://variousconsequences.com jstults

    Ooops, link for costs was supposed to be to this post.

  • http://www.nickolai.me nickolaibelakovski

    Where do you get the information that IOC for Orion was 2010? My understanding was that under Sean O’Keefe the IOC was 2014. With Griffin’s entry he tried to bump things up to 2012, but quickly moved that back to 2014 and then even further.

    Also, what leads you to the conclusion that issues with Soyuz would lead to questions “about the wisdom of NASA’s experiment with commercial crew.” ? Since Orion wasn’t going to be available any earlier than any commercial crew options, it seems like a moot point.

  • http://www.nickolai.me nickolaibelakovski

    Otherwise a great article, I enjoyed reading it!