Boeing bopped

Dear readers,

Welcome to Quartz’s newsletter on the economic possibilities of the extra-terrestrial sphere. Please forward widely, and let me know what you think. This week: the Boeing bombshell, impeachment from space, Blue Origin wins a battle.

🌘 🌘 🌘

A bombshell report rattled what is arguably NASA’s most critical program, the effort to build new, privately operated spacecraft to ferry US astronauts to the International Space Station.

The report on the commercial crew program from NASA’s independent Inspector General  is worth reading yourself (pdf), but here’s the short version: The IG found NASA paid an unnecessary $187 million to Boeing when delays appeared to put future missions in jeopardy, without giving the other participant, SpaceX, a similar opportunity to solve the problem. The report also says that senior NASA officials perceived that the aerospace giant was threatening to quit unless their original, fixed-price contract was increased.

Boeing and NASA have disputed elements of the report, with NASA arguing that the IG is second-guessing defensible business decisions, while Boeing issued a broadside of talking points, including a denial that it ever considered leaving the program.

Boeing was upset with the IG for saying its Starliner would cost NASA $90 million per astronaut—more than the $85 million it costs NASA to put an astronaut on Russia’s Soyuz, the vehicle the agency is seeking to replace. SpaceX’s Dragon crew vehicle is forecast to cost just $55 million per seat. Boeing disputed the accounting, noting that Starliner can fly more than the four astronauts the calculation is based on, as well as a small amount of cargo. But this is also true of the Dragon.

A brief interlude on cost: Last week, I suggested pricing transparency might be a good way to judge if the space industry is heading in a new direction. I got some reasonable pushback, including from Mike French, who works on space issues at the Aerospace Industries Association, a trade group. He noted that the satellite communications industry, the most successful and remunerative space business, is still driven by back-room deals on spacecraft manufacturing, launch costs and the prices of their services. A simple dichotomy between “old” and “new” doesn’t reflect a complex sector that sells everything from physical hardware to services to data. Fair enough!

Now, to rant about cost. In Boeing’s response to the IG report, it noted that its bid was “based on creating a safe and reliable orbital crewed space vehicle from scratch, while positioning our pricing to be sustainable long-term…[b]y contrast, our competitor offered a crewed vessel based on a cargo vehicle designed for human rating, whose development had been funded for several years by NASA on a predecessor contract.”

Funding, though, is not really an excuse. For one thing, Boeing received $76 million in crew development funding that SpaceX did not. For another, even if NASA had paid Boeing the $396 million it invested in SpaceX’s development of the Falcon 9 rocket and cargo Dragon between 2006 and 2012, Boeing’s commercial crew offering would still cost $1.4 billion more than that of SpaceX.

As it stands, NASA will pay Boeing $1.8 billion more than SpaceX for more or less the same capabilities, and per the IG, SpaceX is about a month ahead on certification. There’s quibbling to be done about the differences between the two spacecraft, neither of which has flown any astronauts yet, but the cost gap strikes me as pretty important. Perhaps Starliner will prove to be a better spacecraft, flying more efficiently and reliably, but that’s not obvious now.

(As a side note, both companies are supposedly investing in their commercial crew spacecraft as well, but neither has said how much of their own capital has been spent. If you know, holler at me.)

The debate over cost is, for the IG, a proxy for critical concerns about safety. With delays dragging on, the inspector worries that the pressure to say “OK” to unnecessary risk might grow. NASA has typically responded to risk by spending more money and time, but those are resources are in short supply right now. The space agency has been adamant, however, that neither Dragon nor Starliner will launch until they are as safe as possible. But if neither can bring crew to the ISS by April 2020, NASA will only be able to keep one astronaut onboard, which means losing valuable research time—and looking pretty inept on the international stage.

🛸 🛸 🛸

SPACE POWER RANKINGS WILL RETURN. Remember this Tory Bruno-endorsed hallucinatory vision? Please share your nominations, honorable mentions and views on who wields power in spaceworld. Will there be prizes? Absolutely.

🛸 🛸 🛸

Imagery Interlude

The last time the United States began impeachment proceedings, in June 1973, NASA was finishing a mission to its first real space station, Skylab. This picture was snapped by US astronauts during a farewell inspection of the habitat, built inside a portion of a Saturn V rocket.

Skylab helped NASA understand how to live and work in space for long periods of time, was home to the first space labor dispute, and eventually burnt up in the atmosphere in 1979.

🚀 🚀 🚀

SPACE DEBRIS

Habitat dreams may never die. 

Nanoracks founder Jeffrey Manber lead a group that bought the Russian space station Mir at the end of its lifespan, before it too met a fiery demise. Now, Nanoracks is working on plans for its own private space station built out of the used upper stage of a rocket, which are typically abandoned in orbit. Towards that end, Nanoracks and partner Maxar announced that they will fly a robot on a 2020 SpaceX mission to demonstrate the ability to cut into a metal structure while in space—the kind of thing that you’d need to do if you want to build a private orbital habitat from a discarded rocket body.

Blue Origin wins round one. 

Jeff Bezo’s space firm prevailed, at least a little, in its legal challenge to the US Air Force’s plans to buy new rockets. Blue alleged that parts of the Air Force approach “unduly restrict competition, are ambiguous, or are inconsistent with customary commercial practice.” The Government Accountability Office (GAO) upheld its objection to how the Air Force will select two rocket-makers from its pool of four, which the GAO said did not provide “a reasonable, common basis” for competition and evaluation. Publicly, Blue Origin has said it wants the Air Force to pick three providers, but this decision is still sealed and it’s not clear what the Air Force can and will do to fix the problem. Watch this space!

More robots for the moon.

Or at least more companies to build them. NASA has added additional providers to its year-old program hiring private companies to fly scientific instruments to the lunar surface. The five new players—SpaceX, Blue Origin, Sierra Nevada Corporation, Tyvak Nano-Satellite Systems and Ceres Robotics—are all fairly experienced spaceflight firms compared to the initial round, which leaned toward smaller firms outside of Lockheed Martin. Part of the recruitment of the more experienced contractors is that NASA has larger cargo, like a new rover called VIPER, to put on the moon. But at least some participants are worried that 14 companies competing for just a few contracts a year might be a problem for the nascent market, so prepare for potential consolidation.

Red Alert.

It’s worth noting that the US-China Economic and Security Review Commission (one of our favorites) spent an entire chapter (pdf) of its annual report thinking about China’s space program for the first time since 2015. One observation of interest: “If plans hold to launch [China’s] first long-term space station module in 2020, it will have matched the United States’ nearly 40-year progression from first human spaceflight to first space station module in less than 20 years.” The report emphasizes the risks faced by the United States if it does not take China’s focus on space technology seriously. Architects of NASA’s 2024 Artemis lunar return may also be struck by this line: “The historical U.S. ‘flags and footprints’ model characterized by exploration without building capacity for a long-term presence may no longer suffice.”

Your pal,

Tim

This was issue 24 of our newsletter. Hope your week is out of this world! Please send inside information about commercial crew, imaginative visions of future space labor strife, tips and informed opinions to tim@qz.com. If you enjoy this newsletter, take 50% off becoming a Quartz member.