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NASA Figures Show That Commercial Rocket Costs Less Than Half as Much as Government-Run Effort Would


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SpaceX's Falcon 9 rocket launching

Falcon 9 lifts off on a 2010 test flight. Credit: Chris Thompson/SpaceX

SpaceX has been the darling in the past few years of the so-called NewSpace movement—private companies aspiring to do the spacefaring work that was once limited to the space programs of the world’s superpowers.

The California-based company, headed by Paypal co-founder Elon Musk, has already completed successful demonstrations of its Falcon 9 rocket and its Dragon crew capsule to much fanfare. If further unmanned tests go smoothly, SpaceX might use those vehicles in coming years to carry U.S. astronauts to orbit. NASA, for its part, has struggled with cancellations and shifts of direction (some internal, and some imposed by lawmakers) for its own planned rockets and crew capsule.

Now a column by Florida Today‘s John Kelly points out that the much-trumpeted efficiencies of private enterprise do indeed work for SpaceX. A NASA study (pdf), Kelly notes, found that the Falcon 9 would have cost much more had it been developed within the confines and culture of NASA.

Initial estimates using the NASA/Air Force Cost Model, or NAFCOM, found that NASA would have needed $4 billion to build the Falcon 9, more than twice as much as a NAFCOM-derived estimate for SpaceX. But then NASA personnel visited SpaceX to learn more about the company’s rockets and found that more hardware was either off-the-shelf or derived from the smaller Falcon 1 rocket than had been assumed in the study. So, an updated estimate based on those factors and others made cost savings through commercialization even more dramatic. As Kelly notes:

Follow-up research and a revised estimate—based on SpaceX’s early success with the Falcon 1 rocket and other factors—led to lower cost figures but the same giant disparity between the privatized model ($443 million) and the NASA way of doing things ($1.4 billion).

That estimate, which includes two test flights, roughly jibes with the company’s own figures. Musk wrote in a May blog post that SpaceX needed four and a half years and just over $300 million to develop Falcon 9 “from a blank sheet to first launch.”

So the smaller, nimbler SpaceX has the demonstrated ability, both on paper and in practice, to produce rockets more quickly and cheaply than NASA does. That is no great surprise—NASA is hardly a model of entrepreneurial efficiency. The next question for SpaceX and for other NewSpace upstarts, which has not yet been answered, is whether they can match or better NASA’s safety record while also turning a profit.

About the Author: John Matson is an associate editor at Scientific American focusing on space, physics and mathematics. Follow on Twitter @jmtsn.

The views expressed are those of the author and are not necessarily those of Scientific American.





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  1. 1. Bonzo666 6:09 pm 09/28/2011

    How much did that we already knew news cost us?

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  2. 2. BryanTimes 7:41 pm 09/28/2011

    The simple fact of the matter, is that NASA has become an entrenched beuracracy, like any other. It has old men who did great things, being paid now for the great things that they once did. I bet spaceX, or whatever, has engineers on it’s payroll earning less than $50-60,000 a year doing the job that Engineers over at NASA are getting paid four-times that amount. In Thirty years, Space X will be the same. Overhead is overhead, GM, Ford, Nasa… the more successful the organization, the more money you end up paying the has-beens instead of the up-and-comers.

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  3. 3. Postulator 4:27 am 09/29/2011

    Yep, NASA has a very large overhead. The private sector will end up with that same overhead eventually.

    It’d be interesting to see the cost comparison break-down. My money would be on NASA spending a lot more on planning.

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  4. 4. BV 7:48 am 09/29/2011

    NASA is just too much at the political whims of Washington and the Defense lobby that works the back rooms of Washington. For them to be competitive they would have to be given a stable long term goal, a stable budget without strings, the opportunity to hire directly as opposed to using expensive defense contractors, and immunity from the political wind in Washington.

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  5. 5. ErnestPayne 8:03 am 09/29/2011

    Just another attempt to produce a bloated free enterprise military industrial business. Look at how efficient and inexpensive Blackwater and Haliburton have been.

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  6. 6. newman 9:54 am 09/29/2011

    I think the biggest problem is the economic crisis.
    The politics cut the money and the appropriation is small.
    Nasa have many costs to find the news of universe, buy new techonolgy and the people that work there

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  7. 7. toeppermr 10:01 am 09/29/2011

    It is very perplexing to see a presentation brief (pdf link) referred to as a study, especially from NASA. Both investigations into the losses of the space shuttles highlighted that presentations are poor substitutes for technical reports for decision-makers. Given this background, I am disappointed to see the article link to a “study”, which was actually a presentation brief.

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  8. 8. Marley 10:22 am 09/29/2011

    Wait, so NASA has done several decades of research and SpaceX is implementing that research, and NASA costs more? I’m shocked, shocked I say.

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  9. 9. jstaf 10:38 am 09/29/2011

    NASA has provided over 50 years of research to these companies, it is humorous that anyone would choose this perfect example of how government and business should work together as an example of free market superiority.

    There was no private company that was going to make the investments we made as a nation, and because we did come together as a nation and fund five decades of research, but because we did industries were born, as most macro economist know, nations create industries.

    As for the comments on NASA salaries, I worked there in the 1970′s during Skylab and ATS-6 (a government project that created much of the foundation for Sat TV) and LASER Ranging (a government project that led to GPS systems and the advancement of LASERS into communications).

    We were paid less than industry rates ( I could have made more working out windings for my home town and now defunct Westinghouse), but it was where the action was, mini-computers in use instead of mainframes, networks that extended around the world three decades before the private world caught on, etc.

    Only idiots miss the benefits of the collaboration as they are blinded by ideologies delivered from space by people like Rush who miss the irony that the government they rail against provided them the means to get get rich by disparaging government. Funny world filled with dumb people.

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  10. 10. Scienceangela 10:38 am 09/29/2011

    I guess the big question for SpaceX and other NewSpace upstarts, which needs to be answered, is whether they can match or better NASA’s safety record while also turning a profit.

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  11. 11. Marley 11:07 am 09/29/2011

    jstaf, thanks for the argument I was too annoyed to make.

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  12. 12. Unbeliever 11:52 am 09/29/2011

    Ha – Sciam unquestioningly parroting the superior cost-effectiveness of private industry compared to the government, as stated by NASA.
    How predictable of Sciam.
    Sciam has no problem with the US’s capitulation to the Chinese regarding man in space.
    When it comes to cost effectiveness regarding the power industry, Sciam believes in government subsidization of cost Ineffective pie-in-the-sky rainbows and unicorn solar and wind based power.
    Sciam is an illegitimate source when it comes to natioanl policy, as Sciam was coopted long ago by Leftists.

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  13. 13. Ucther 12:24 pm 09/29/2011

    jstaf and Marley

    It seems to me that either you or I have missed the point of the article.

    The report says that for NASA to accomplish the exact-same-thing that SpaceX accomplished, (same resources from the legacy of NASA and other space agencies around the world), that NASA would spend nearly three time as much money.

    I do not see anywhere in the article that SpaceX claims to have done all they have done using none of the knowledge that NASA has painstakingly learned.

    For the very reason the fleet of cars and trucks that NASA personnel drive around the NASA space centers are not designed and made by NASA, they should not be in the cheap rocket business.

    I have never been a part of NASA but I have been watching them closely for the last 45 years and there is nobody better than NASA at doing things that nobody else can do. Let them do what they are best at and let others do what they are best at, and everyone will be much better off with the results.

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  14. 14. dphuntsman 9:58 pm 09/29/2011

    Folks, the huge differences in NASA vs. an efficient private company’s development costs – when no new advanced tech is required – are very real; but let’s realize where the real problem is.

    Our problem in NASA (I’ve been in the agency 37 years, 9 as a Senior Executive) is that we often continue to do the wrong things, and the things we do do are done in the wrong way. The real issue is that NASA should NOT be designing, owning, and operating government-only launch vehicles, especially to low-earth orbit. Can you imagine if NACA, NASA’s predecessor, and NASA itself, continued to insist, decade after decade, of NASA itself building, owning, and operating airliners? If we had done so, aviation would not have advanced even as far as it has.

    NASA’s job needs to NOT be to build its own rockets using current technology; but instead, like NACA did to advance aviation, to serve as the government catalyst for ever-improving technology and capability for an ever-expanding, multi-competitor American industry. But we screw up royally when we in NASA insist, year after year, on designing, owning, and operating all of our own rocket vehicles, or airplanes, or even cars. That’s not where we are needed; and when we diverge from where we are needed, we screw up royally- spending close to ten times to build a (relatively) low-tech rocket than a SpacEx might.

    Some people with famous names literally don’t realize this; this includes my old professor, Neil Armstrong, and some other famous former astronauts. The “NACA Model’ applied to space, is NASA’s proper role: focusing on jump-starting whole new competitive space industries for the things that should be routine by now – like LEO transportation – and tech development, while NASA only builds/owns/operates those things that are unique, cutting edge, and related to true exploration. One perfect example of thing would be the Nautilus-X concept for a deep space human exploration vehicle that starts, not from the ground, but from LEO. Such true cutting-edge human exploration will be impossible – literally impossible – if we blindly continue to design/build/own/operate un-needed government-own big boosters from the ground. It’s one or the other, folks.

    Dave Huntsman
    dave.huntsman@yahoo.com

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  15. 15. hybrid 5:58 pm 10/5/2011

    NASA certainly did a lot of things wrong, like when they added too much fuel to a low orbit vehicle that accidentally went to the moon instead because of the part time golfer that had infiltrated the astronauts. Then when they employed too many expensive engineering experts who burdened us by having to continue paying the wages of the expensive employees they saved when trapped in a faltering space capsule. National prayer or loyalty to investors and fiduciary obligations should have invoked cost effectiveness programs and put the rescue program up for international bids. Lets stop all these ridiculous regulations that keep used car salesmen out of the programs who will work on commission without insurance or health benefits. Hi hoh, hi hoh its off to space we go, lets dance with the stars without government bars, NASA that is.

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