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Commercialization

Lockheed Martin Eliminated From Cargo Competition For Cost

By Keith Cowing
NASA Watch
October 1, 2015
Filed under ,
Lockheed Martin Eliminated From Cargo Competition For Cost

Lockheed Martin Eliminated From NASA’s Cargo Competition, Wall Street Journal
“NASA has quietly eliminated Lockheed Martin Corp. from a pending multibillion-dollar competition to ship cargo to the international space station starting in roughly three years, according to people familiar with the details.”
Lockheed Martin Solution For NASA’s Commercial Resupply Services Designed For Reliable Space Cargo Delivery, Lockheed Martin
“The Lockheed Martin CRS-2 solution brings many affordability benefits with it. Not only does it employ a reusable spacecraft and create the option to host commercial payloads, it’s also designed to support future exploration missions in deep space.”
Keith’s note: This certainly has to factor into Lockheed Martin’s thoughts about whether they want to try and sell their interest in ULA.

NASA Watch founder, Explorers Club Fellow, ex-NASA, Away Teams, Journalist, Space & Astrobiology, Lapsed climber.

24 responses to “Lockheed Martin Eliminated From Cargo Competition For Cost”

  1. buzzlighting says:
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    Lockheed Martin Jupiter spacecraft way too expensive and complex for NASA to handler. Also take unknown number of year to develop its capabilities and deployment to ISS. NASA does not have the time as a luxury when ISS stop 2024.

  2. lookingup says:
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    What is the tie?

    Keith’s note: This certainly has to factor into Lockheed Martin’s thoughts about whether they want to try and sell their interest in ULA.

    • RockyMtnSpace says:
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      Keith is clueless. CRS-2 has zero impact on any Lockheed decision relative to ULA.

      • kcowing says:
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        Right, Anonymous people always know more than I do. I’ll go with my sources here in DC on this one. Have a nice day.

        • lookingup says:
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          I assume by “people” you include me; however, you drop a bomb without explanation. Seems my simple non-bombastic question deserves a bit more of a courteous response.

          • kcowing says:
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            Huh? What “bomb” ? Do you mean the Wall Street Journal article? I did not write that article – so what bomb am I dropping?

        • RockyMtnSpace says:
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          Try sources in Colorado instead of DC. You are clueless on this subject. And thank you, I will have a nice day.

      • numbers_guy101 says:
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        I’d say this event should affect Lockmarts thinking on more investments toward ULA vs. selling. If it does not it’s because such talk would be verboten inside Lockmart.

        One government agency, NASA, has transferred a good chunk of space transportation money away from the world of cost-plus. Picking who gets blocks of service contracts gets rather easy, based on a relatively predictable match of yearly budget and cargo delivery needs with at least 2 capable partners at the two lowest bids. Even if thinking one player may be more reliable, the money is not there to go with a partner that’s just too expensive. You go ahead and hope you mature the two with the best balance of capability at the two prices that work with the set budget. There is no more money and the cargo delivery requirement is really hard set.

        The two players now, mouse 1 that’s very affordable, and mouse 2 that’s a bit more, are both much less than any other mice trying to get a piece of cake. This is a world where the kind of proposal that says give me lots more money than the current best two players so I can give you lots more stuff just won’t sell.

        Where is Air force being pushed and prodded towards? The same kind of acquisition thinking.

        That launches should cost LESS over time, not more. With less government up-front investment to boot – having industry take on risks there, aligning incentives to get the operational prices down.

        So yes, if I were a Lockmart person turning some ROI numbers I’d wonder what the road looks like for ULA five or so years down the road as the larger of these changes may take effect. I’d also wonder short term about profit, as even a launch next year by any new entrant vs. ULA, or two the year after, and so on, quickly cuts out most profit as they are currently structured.

  3. Daniel Woodard says:
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    I believe in this design a small reusable tug remains in space and retrieves the cargo module as it approaches the ISS. An interesting approach but apparently they could not get the cost low enough.

    • numbers_guy101 says:
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      The technical solutions as good and as new as they may be won’t be decisive cost drivers at all until all the industry players have wrung out the real driving costs from non-technical areas, primarily indirect costs. In the world of cost-plus, an anti-competitive business environment, and a culture of relatively price-insensitive buyers and sellers (many offices in DoD and NASA, as well as in industry catering to these), technical, design or conceptual factors will not be the real drivers of costs, for either development, manufacture or operations.

      Once there are abundant players down at the low end of what things “should cost” in a rational, competitive, healthy space sector for all (buyers as well as sellers), then and perhaps only then, will these type of technical variations start to be important in the cost of concept A vs. B. Take a zero off the cost of acquiring space systems today, up-front or recurring, and then the next step will be to have all the players start to differentiate on technical and design for productivity.

  4. Terry Stetler says:
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    Charles Lurio tweeted this last May. With Exoliner/Jupiter’s operational complexity that costs ended up being its demise isn’t really a surprise. KISS/KICS.

  5. numbers_guy101 says:
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    This was to be expected. Wonderful, brilliant engineers who can’t do math when it comes down to numbers with the dollar $ sign attached.

    The prices being charged by Orbital and SpaceX are well known. The budget the ISS transportation office / commercial cargo office has is in the NASA budget documents. The product/service description is known, down to the kilograms to be gotten to the ISS.

    So suppose getting down to SpaceX prices was not possible, at least Lockheed could have said let’s meet the Orbital price and knock them out – otherwise why would NASA switch horses at all? For the features or capability – but at the same price remember, as there is no more money than what is out there and going to be out there, firm fixed price.

    This is the same observation to be made about ULA and Vulcan – floating concepts out there all about how this or that is more cost effective or affordable, but then talking as well about multi-billion dollar development costs (a no-starter poor sign right at the git-go), as well as recurring prices still twice the competition (Proton’s or Falcon’s). It just makes no sense, and will lead to the same result as with this news here.

    Work backwards from the NASA prices teams! Take the risk – and place that bet – bidding at the price you know IS the ANSWER the teacher wants. Orbital and SpaceX have done it. C’mon, you can do it too!

    • DTARS says:
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      I don’t think they are interested in competitive profit margins.

      • numbers_guy101 says:
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        Do you mean OSC and SpaceX? I suppose Boeing is not interested in competitive profit margins to have taken on the commercial crew program?

        The real thing is larger, older companies have had a good run with good negotiating positions on most of these sort of projects. This is changing. The interest over time had become preserving large work-forces, with even civil service batting for industry favorites, a throw-back perhaps to when sustainable political support was very much linked to job creation, not improved productivity and ever improving results.

        That thinking is not the future, and cracks in such thinking, with a program like commercial cargo going firm fixed price, with true partnering for attracting commercial non-government customers, are starting to spread.

        • Paul451 says:
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          I suppose Boeing is not interested in competitive profit margins to have taken on the commercial crew program?

          No. Not even a little bit.

          Where do you think the constant pressure from Congress to down-select to one contractor comes from? It ain’t from SpaceX.

          • DTARS says:
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            It amazes me how greed and corruption of the primes have stopped progress, Paul.
            Thanks for pointing that out.

          • DTARS says:
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            Isn’t it Boeing’s and Lockheeds goal to crush the whole cots model Anyway?
            I’m glad NASAs not letting these guys compete.

            Has my grand father would say

            Throw the bums out!

  6. buzzlighting says:
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    Engineer in Houston all I know extend ISS till 2024 wait and see what happens in 2024 then we know for sure if it has extended future.

  7. Todd Martin says:
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    Here’s a perfect example where NASA just can’t leverage synergy between separate programs within the agency. NASA would save a lot of money in BEO (Beyond Earth Orbit) exploration if a re-usable tug was available, but CRS-2 evaluation has no formal way to capture that value. Heck, I don’t think the Lockheed people could even work with the ISS team to allow the tug to stay attached to the station between rendezvous.
    As long as separate programs and field centers within NASA compete for funding, this sort of sub-optimum decision making will continue. NASA leadership should coordinate programs to collaborate better.
    I’m sad to see the Lockheed proposal dropped. It provided a path forward beyond simple cargo delivery.

    • Michael Spencer says:
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      Could you explain how a space tug would be used BEO to save money?

      • Todd Martin says:
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        I can see a number of ways:
        1) Manned missions to mars needs a lot of separate elements to work. Things like an EDS (Earth Departure Stage), a MDS (Mars Departure Stage), MTV (Mars Transit Vehicle), MAV (Mars landing and ascent vehicle), and an Earth return vehicle (Orion). A tug with an arm can assemble components together, staging them in L1 or L2. This eliminates the need for all of these components to be designed with all of the avionics, etc to do precision docking with one another.
        2) These components could be raised from LEO to L1 o L2 with the tug. That would allow smaller launch vehicles to be used to loft these components.
        3) The launch vehicles lofting components would not need so much precision in placing the payloads into orbit. This would allow relatively dumb 2nd stages to be used or eliminate the need for extra burns.
        4) A lot of concepts for a Manned mission to Mars includes a “Gateway station” to be built at L1 or L2 to serve as a departure and arrival point. The Gateway station could be built in part with ISS components if a tug were available to move the modules.
        All of this is besides other LEO purposes for a tug, like de-orbiting spent spacecraft, servicing satellites, saving Hubble, etc.