4 ms·

SpaceX is a massive vindication of NASA's approach the last 2 decades to do public-private partnerships and commercial-oriented contracting (i.e. where contract

SpaceX is a massive vindication of NASA's approach the last 2 decades to do public-private partnerships and commercial-oriented contracting (i.e. where contractors are allowed more latitude in how they accomplish a mission, are actively encouraged to find other customers, and bid on a fixed-price basis instead of cost-plus). SpaceX is a huge vindication of careful government spending being used to help stimulate commercial activity while also accomplishing government goals more efficiently.

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matthewdgreen 5y ago
If you exclude SpaceX as an outlier, how well does this approach work? (Actual question, I'm curious.)
- trothamel 5y ago
  While it's still early days, it's reasonably to say it's seemingly working okay. The first Starliner mission was, basically, a failure - but it's a failure that Boeing, rather than NASA, is having to pay for, including the reflight of the Orbital Flight Test. Despite setbacks, the Commercial Cargo program seems to be going well. One note is that Orbital (now Northrup Grumman) had to purchase flights from a competitor to fulfill their contracts, which they did. The Lunar Gateway appears to be moving/have moved to this model, and so far so good. I'd say one of the big things to do is to compare this against what NASA has been able to accomplish with traditional contracts, recently. Since 2005, the Ares program launched one model rocket in 2009. (The first stage of Ares 1X wasn't the one intended for Ares I, and the second stage was boilerplate.) SLS will likely have it's first flight later this year or early next year, and then a second flight in 2023, and will probably have cost ~$25B by then. I think it's probably fair to say the commercial programs have accomplished more, especially for the money.
  - ethbr0 5y ago
    The only issue is where the risk pools, and the drive towards competitors merging to obtain scale capable of surviving failure. Or in other words, the US effectively produced the modern primes by pushing more risk onto them. No company wants to go out of business. And if that would be the result of a single project failure when your primary customer is asking you to do something that's never been done before? SpaceX having success is great. But had they failed, it would have bankrupted the company. And then we'd be back to Orbital, Boeing, et al.
    - Robotbeat 5y ago
      Bankrupted companies is not necessarily bad for society overall. Besides SpaceX, there was also Kistler in the running for COTS commercial cargo. They failed and were replaced by Orbital. Also, you seem to be implying that cost plus contracts will allow much smaller companies since they won’t have to absorb as much risk, but in reality, it’s the big boys who win cost plus contracts. SpaceX was tiny when they won COTS/CRS (Elon wasn’t a billionaire and Tesla was looking more like a dead end novelty than the most valuable car company in the world). Also, Iridium and Orbcomm and OneWeb all went bankrupt but all are still operating today. Bankruptcy doesn’t always mean the business disappears off the face of the planet, and even when it does, often their assets end up being used productively by others (that’s how SpaceX got their McGregor test site).
  - thinkcontext 5y ago
    > Despite setbacks, the Commercial Cargo program seems to be going well. One note is that Orbital (now Northrup Grumman) had to purchase flights from a competitor to fulfill their contracts, which they did. Also on Commercial Cargo, for phase 2 the competition forced Orbital to have to significantly cut their price. On the flip side, SpaceX raised theirs since they so underbid in the first round. Additionally, Dream Chaser is supposed to come online soon.
- HWR_14 5y ago
  As far as I can tell, this approach works very well. Better than the standard procurement process and better than the processes many private companies use.
- bpodgursky 5y ago
  I don't think it's reasonable to exclude outliers when you are de-facto angel investing. The expectation is that most companies, especially those pushing technological limits, fail. One or two wild successes is the "expected" outcome in a power-law, winner-take-most distribution, and SpaceX is one of them.
- mensetmanusman 5y ago
  In the US it has worked ridiculously well if you consider the total effect on gdp growth and the fractional percent of R&D bets that have been home runs.

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matthewdgreen 5y ago

If you exclude SpaceX as an outlier, how well does this approach work? (Actual question, I'm curious.)

trothamel 5y ago
While it's still early days, it's reasonably to say it's seemingly working okay. The first Starliner mission was, basically, a failure - but it's a failure that Boeing, rather than NASA, is having to pay for, including the reflight of the Orbital Flight Test. Despite setbacks, the Commercial Cargo program seems to be going well. One note is that Orbital (now Northrup Grumman) had to purchase flights from a competitor to fulfill their contracts, which they did. The Lunar Gateway appears to be moving/have moved to this model, and so far so good. I'd say one of the big things to do is to compare this against what NASA has been able to accomplish with traditional contracts, recently. Since 2005, the Ares program launched one model rocket in 2009. (The first stage of Ares 1X wasn't the one intended for Ares I, and the second stage was boilerplate.) SLS will likely have it's first flight later this year or early next year, and then a second flight in 2023, and will probably have cost ~$25B by then. I think it's probably fair to say the commercial programs have accomplished more, especially for the money.
- ethbr0 5y ago
  The only issue is where the risk pools, and the drive towards competitors merging to obtain scale capable of surviving failure. Or in other words, the US effectively produced the modern primes by pushing more risk onto them. No company wants to go out of business. And if that would be the result of a single project failure when your primary customer is asking you to do something that's never been done before? SpaceX having success is great. But had they failed, it would have bankrupted the company. And then we'd be back to Orbital, Boeing, et al.
  - Robotbeat 5y ago
    Bankrupted companies is not necessarily bad for society overall. Besides SpaceX, there was also Kistler in the running for COTS commercial cargo. They failed and were replaced by Orbital. Also, you seem to be implying that cost plus contracts will allow much smaller companies since they won’t have to absorb as much risk, but in reality, it’s the big boys who win cost plus contracts. SpaceX was tiny when they won COTS/CRS (Elon wasn’t a billionaire and Tesla was looking more like a dead end novelty than the most valuable car company in the world). Also, Iridium and Orbcomm and OneWeb all went bankrupt but all are still operating today. Bankruptcy doesn’t always mean the business disappears off the face of the planet, and even when it does, often their assets end up being used productively by others (that’s how SpaceX got their McGregor test site).
- thinkcontext 5y ago
  > Despite setbacks, the Commercial Cargo program seems to be going well. One note is that Orbital (now Northrup Grumman) had to purchase flights from a competitor to fulfill their contracts, which they did. Also on Commercial Cargo, for phase 2 the competition forced Orbital to have to significantly cut their price. On the flip side, SpaceX raised theirs since they so underbid in the first round. Additionally, Dream Chaser is supposed to come online soon.
HWR_14 5y ago
As far as I can tell, this approach works very well. Better than the standard procurement process and better than the processes many private companies use.
bpodgursky 5y ago
I don't think it's reasonable to exclude outliers when you are de-facto angel investing. The expectation is that most companies, especially those pushing technological limits, fail. One or two wild successes is the "expected" outcome in a power-law, winner-take-most distribution, and SpaceX is one of them.
mensetmanusman 5y ago
In the US it has worked ridiculously well if you consider the total effect on gdp growth and the fractional percent of R&D bets that have been home runs.