9 ms·

You are being upvoted, but I think that when looking at your proposal seriously, it has flaws. Let's try with an example. Until now: government pays $100 to b

You are being upvoted, but I think that when looking at your proposal seriously, it has flaws. Let's try with an example. Until now: government pays $100 to build a rocket to go to the Moon, say $50 now and $50 at launch. Rocket explodes? No problem, you still get your $50. Your proposal: government pays $100 to build a rocket to go to the Moon. $50 now, $50 if it lands. Ops. No one shows up. Err... Let's try $60 now, $40 if it lands? Nope... Still nobody around to get this contract... Why? Because a company would charge you (simplifying a bit) $150, of which $100 now, and $50 if the rocket lands. Congratulations. You have contributed to ballooning the Space budget. Taxpayers are thankful.

dmurray 4y ago
Spacex seem to be quite successful with a business model of undercutting the cost-plus incumbents. Why wouldn't other companies do this if government incentives were tweaked to favour them a bit more?
- hef19898 4y ago
  We have no financials of SpaceX, except some partial leaks that are now almost a decade old. On the other hanf we have fully audited budgets of NASA. Hard to conpare those two.
  - panick21_ 4y ago
    If SpaceX overspent on fixed-cost programs by billions and billions they wouldn't exist anymore.
wumpus 4y ago
There are several examples of recent competitions that undercut your thought experiment: HLS, Gateway Resupply, Commercial Crew, Commercial Cargo, ...
mabbo 4y ago
But that isn't how it works now. How it works now is "You build a rocket to go to the moon. Try to keep the price down, but we'll pay whatever it costs. Plus a profit margin when you're finished." The bidder say "I can do it for $100". Fantastic! Then they go 'over budget' (as planned) and spend $1000, and the government pays it anyway because the contract says they must. Plus $20 profit. Meanwhile the Commercial Resupply Services missions have been a poster-child for cost-savings. The taxpayers truly thank you for 'saving them money'.

dmurray 4y ago

Spacex seem to be quite successful with a business model of undercutting the cost-plus incumbents. Why wouldn't other companies do this if government incentives were tweaked to favour them a bit more?

hef19898 4y ago
We have no financials of SpaceX, except some partial leaks that are now almost a decade old. On the other hanf we have fully audited budgets of NASA. Hard to conpare those two.
- panick21_ 4y ago
  If SpaceX overspent on fixed-cost programs by billions and billions they wouldn't exist anymore.

wumpus 4y ago

There are several examples of recent competitions that undercut your thought experiment: HLS, Gateway Resupply, Commercial Crew, Commercial Cargo, ...

mabbo 4y ago

But that isn't how it works now. How it works now is "You build a rocket to go to the moon. Try to keep the price down, but we'll pay whatever it costs. Plus a profit margin when you're finished." The bidder say "I can do it for $100". Fantastic! Then they go 'over budget' (as planned) and spend $1000, and the government pays it anyway because the contract says they must. Plus $20 profit. Meanwhile the Commercial Resupply Services missions have been a poster-child for cost-savings. The taxpayers truly thank you for 'saving them money'.