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Commercialization

GAO Report On ICBM Motors For Commercial Launchers

By Keith Cowing
NASA Watch
August 16, 2017
Filed under ,
GAO Report On ICBM Motors For Commercial Launchers

GAO: Surplus Missile Motors: Sale Price Drives Potential Effects on DOD and Commercial Launch Providers, GAO
“The Department of Defense (DOD) could use several methods to set the sale prices of surplus intercontinental ballistic missile (ICBM) motors that could be converted and used in vehicles for commercial launch if current rules prohibiting such sales were changed. One method would be to determine a breakeven price. Below this price, DOD would not recuperate its costs, and, above this price, DOD would potentially save. GAO estimated that DOD could sell three Peacekeeper motors–the number required for one launch, or, a “motor set”–at a breakeven price of about $8.36 million and two Minuteman II motors for about $3.96 million, as shown below. Other methods for determining motor prices, such as fair market value as described in the Federal Accounting Standards Advisory Board Handbook, resulted in stakeholder estimates ranging from $1.3 million per motor set to $11.2 million for a first stage Peacekeeper motor. The prices at which surplus ICBM motors are sold is an important factor for determining the extent of potential benefits and challenges of allowing the motors to be used for commercial launch.”

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6 responses to “GAO Report On ICBM Motors For Commercial Launchers”

  1. numbers_guy101 says:
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    Worse idea ever. The GAO report does not yet draw conclusions, says further study is ongoing, and does dedicate discussion to the detrimental effect of this idea on private sector investment. But they miss the bigger picture entirely, probably from not wanting to call out this entire idea for what it’s really about. Only Orbital ATK will take an interest in these motors, and they’ll want them cheap, and then they’ll sell them HIGH to only one price insensitive customer, right back to DoD.

    Having purchased them saying the motors will save a satellite customer money, Orbital ATK will turn right around and force DoD to buy them back as launchers – at a ridiculous price. And some Congressmen will be involved in this money laundering, converting a motor into money to Orbital ATK.

    • passinglurker says:
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      One flaw. Orbital already sells these surplus motors back to the government as the minatour launch vehicle family. This is just about being able to sell minatours on the commercial market

      • numbers_guy101 says:
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        Which they won’t, as the price will be ridiculously high. They know this. Then they run back to DoD to force them to buy them as a launch service.

        • passinglurker says:
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          That doesn’t make sense they can already do that without being able to sell minatour commercially.

          They reason it’s so high is to cover fixed costs for a low launch rate. Minatour can easily drop to 25mil without the government mark up if they are after something then it’s india’s small sat market. Make domestic options and you can block more launch waivers being issued forcing those says to fly American.

  2. Daniel Woodard says:
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    The difficulty in my view is that such a sale would distort the market, making it difficult for new players (ironically Orbital was one not too long ago) and crowd out small liquid propellant launch vehicles which have a chance to become sustainable.

    • Michael Spencer says:
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      This issue has been discussed repeatedly here, and yours seems to be the consensus.

      Trying to sell those motors is about as near-sighted as a government can possibly get.