A word on newspace vs. old


Rocketdyne's F-1 engine, five of these powered the first stage of the Saturn V that carried Apollo 11 to the moon


The SpaceX-Dragon launch drew the nation’s eyes’ the newspace vs traditional aerospace over the weekend. That’s mostly good news in my view, but I saw some misconceptions being bandied around by talking heads and bloggers. Some people are skeptical of corporations, which is not only understandable in my view but essential to reality in ths day and age. It kinda broke down into two groups, more or less, one that prefers the traditional government approach and one that prefers privatization. The problem with that, they’re arguing over fictional assumptions. NASA already pays out most of its money to private contractors, the big change in the air is how those contractors are going to be paid, cost-plus developmental programs versus flat fee for product or service. There’s one further twist on it, but that’s about it.

Since the beginning of NASA, we the people have employed private corporations to develop spacecraft, rockets, and ground and vehicle systems of all kinds. The more novel stuff, especially the things that hadn’t been built yet even in prototype, were often awarded on a cost-plus contract arrangement. Without that guaranteed margin, aerospace companies like Lockheed Martin or Boeing can’t even begin to make the financial sketch leading from point A to point B.

It had to be that way. We’re talking in some cases about really amazing engineering, completely new hypersonic vehicles, often operating in vacuum under constant temperature swings of hundreds of degrees, pumps and valves that can empty a backyard swimming pool full of highly corrosive liquid oxygen at 300 degrees below zero into a combustion chamber running hot near plasma hot in seconds, chips and micro circuitry that can like wise work to high sigma safeties under incredibly harsh conditions. Trucks and pumping facilities to store fuel, gantry operators to put the space in place, safety drills, abort regimens, maintaining and securing the towering launch pads. It’s not that NASA is the small core government group, what we the people think of as NASA is actually that larger NASA, the whole big picture, an enormous undertaking. That NASA is a conglomerate that can’t run a day, much less put anything in space, without the combined services of dozens upon dozens of commercial venders at almost every developmental and operational level working hand in hand with the best scientific talent in the US government. THAT’S what NASA is and that’s what it’s been since the days of the Mercury Seven.

Government agencies can get bloated, senior civil servants sometimes burrow in and make a nice lucrative home inside — some of us call them red-tape worms. But taxpayers can be proud of how NASA has spent the public’s money. Their list of accomplishments is like no other bio on or off the planet. But what most people don’t know is that roughly three-quarters of every NASA dollar goes to private companies and always has. SpaceX does not work cost-plus. They’re flat fee. That’s the only big difference in new space vs traditional aerospace. There is another debate going on inside and outside of NASA, the twist I mentioned in the lead graf above: because new space companies are incredibly close to being able to deliver services in space at huge discounts, and because we literally have no ground to orbit manned capacity now, and because traditional projects in the past enjoyed huge development benefits not faced by the flat fee model, there is a fight over a billion or so dollars out of NASA’s budget which could be invested into those companies in an effort to speed up their dev schedules instead of being invested in traditional cost-plus projects.

That’s the big fight. It’s between the political patrons of traditional aerospace fighting to keep the lucrative cost-plus model going for as long as possible against the new upstarts who claim they can now deliver on a flat fee bases. That fight will go on no matter how the pieces are shaped. Right now, one of the pieces representing that fight is the heavy booster being developed by NASA. We could get into the weeds as to why it’s a ten-year money pit, but the bottom line reason is the usual bottom line reason: money. Congress has simply never funded any viable return to the moon or manned mission to Mars, or even a shuttle replacement program, at the levels required for the time needed. The less money NASA has the longer it will take them and their traditional aerospace contractors to build and test the heavy booster. At current funding rates, that means it will not fly a mission or at least ten years and it will costs as much as 20 billion or more. Which of course is just dandy with traditional aerospace contractors. Capiche?

For those who think NASA should get out of the business and let private companies run the whole show, you are deluded. There is no profit in space exploration right now, the moon could be three feet deep in pure gold nuggets and it would cost ten to one or more to bring them back using current technology. NASA is a primary customer for space and systems along with the EU and a few others. There is no viable business model for SpaceX or most any other newspace firm without government supported research and space exploration, any more than there is a business model for Rocketdyne’s F-1 engine that lofted Apollo 11 to the moon. In fact without a strong, government civilian driven space program dedicated to peaceful exploration, the only other game in town for cutting edge aerospace new or old companies would be military applications.

The fact is there is no such thing in the US as a pure government space program, the program would not exist in anything like its current form if we relied solely on commercial ventures to develop space. It’s a partnership between commercial ventures and government scientists and engineers, and it always has been in America. The only change in the works is how the private components are paid and a little seed money to speed up their development. Anyone who thinks it’s exclusively government vs private simply does not understand how our space program has succeeded, or how it well continue to succeed in the foreseeable future.


  1. jamessweet says

    Pretty good post. I was getting ready to make the point you made in your last paragraph (but then you got to it) — that maybe part of where the pushback against private contracting is coming from is a confusion between this model vs. crazy Newt-onian plans to just throw it all in the laps of industry and assume some underpants gnomes will find a way to make space exploration profitable. (Even Planetary Resources ambitious plan depends crucially on there being space programs other than them to whom they can sell space water)

    The only reservation I have is that it seems the old model is the only way to get the really ambitious unprecedented stuff done. OTOH, you make a good point that the old model is good for that only if you are willing to throw sustained boatloads of money at it… if you use the old model, but try to fund it at levels more appropriate for the new model, you just spin your wheels a lot.

  2. says

    The cost plus definitely works for completely new vehicles, novel electronics, stuff that has to be invented and can spiral out of control. It’s just that industry being industry, some contractors end up milking the shit out of it and hire lobbysists to help them milk it for ever … see Iraq and Halliburton for examples. That’s what scares progressives I think, they’re confusing newspace with cost plus the worst kind of corrupt privatization. The funny thing is the right is attacking it basically because Obama is for it. When you poll poeple with politicla cross tabs, the right overwhelmingly approves of newspace.

  3. Trebuchet says

    One other thing about the old model: Nearly all that stuff that now provides the foundation for SpaceX et al was developed not for NASA, but for the military. For the single purpose of dropping nukes on Russia. The Saturn I was basically the first non-military rocket NASA ever used.

  4. nanceconfer says

    In the “old days,” though, I had the feeling that I owned some of this. Now it feels like Halliburton will end up owning everything. Wrong on both counts?

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