Cost plus doesn’t make things go faster. The only thing that makes contracts go faster is an award for early delivery, and you can do that with any procurement vehicle. Cost-plus is for when you don’t know what you need. Fixed cost is for when you do. Fixed cost is going to kill you in change fees if you’re wrong, cost-plus will kill you in a bunch of other fees. All tools are useful.
antangil
joined 2 years ago
I think folks are focusing on the wrong thing. Both cost-plus and fixed-price contracts can succeed or fail. Cost-plus fails on budget. Both can fail on schedule (see both SLS and Starliner). If budget can’t move, though, fixed-price can fail on either technical (couldn’t deliver all features for the fixed price) or on risk (tried too many untested things to force the design into the cost box).
What SpaceX agreed to do was to take any cost hit against their own internal budget instead of NASA’s. That kind of power play is only available to very wealthy companies or to companies with bankruptcy lawyers on perpetual standby. It doesn’t build a sustainable space industry… it just allows a bunch of billionaires to enter the market by putting their fortunes up as collateral… which they could have done under a cost-plus model too.
The big upside for the private companies is that they don’t have to share the IP with the American people or with other companies. The result is that every significant difference in competing products (Starship vs Blue) will have to be hashed out in the marketplace in order to arrive at a standard… but with only two entrants, one customer, and a transaction every 18 months, the invisible hand of the market is going to take a VERY LONG TIME to find the most efficient solution.
All of the contract mechanisms suck for different reasons. SLS shows worst-case cost-plus… took forever and was stupid expensive but mostly worked. Starliner shows a worse-case for fixed-price… still taking forever, the company would be bankrupt fixing their problems if it wasn’t the size of Boeing, notably doesn’t work. The discriminating factor is what the American people get for the money. We own SLS, for all the good that’ll do us. For Starship, we paid into the pot, but not enough to get an ownership stake… so that money is just gone.
This was always the plan. Back during DAC 2 kickoff meetings for what became the HLS “government reference design”, folks were struggling to figure out how to get back by 2028.
The press conference where Pence said “2024” happened in the middle of those meetings. Shifting to the private model also shifted the inevitable failure to meet that 2024 date off of NASA (who was/is still wiping SLS egg off it’s face) and onto the “service provider”.
With Trump, there was a mandate to do a moon thing before the 2024 election. With Biden, that schedule pressure is gone… so my personal guess on a crewed lunar surface flight is back to 2028. This is a good thing; 2024 was not enough time.
Artemis 3 is good but Artemis IV needs block 1b and probably BOLE. Both have elements of new development.