The principle behind the additional cost contract is simple. Sometimes the United States government needs something extraordinarily difficult, complex, and unprecedented to build. In those cases, with almost certain technical challenges, the government pays a contractor the full value of development costs, a fee, often 10 percent.
It is a useful tool to get the best contractors in the country to focus their efforts on larger programs that value the government. But this is not a good way to encourage a company to quickly move to a program, especially when companies seek to maximize profits. The reason for this is that the longer a contract is, the more money is spent and the more fees are generated.
An alternative to this is a fixed price contract, in which the government pays the seller a flat fee for a product. If the company distributes a product for less, it makes a profit. If the product ends up costing more, the company eats the difference. Most of the time a company does not receive money until it delivers a product.
Rockets were sometimes considered an exceptionally difficult and complex technology, and they are still very difficult to obtain. However, commercial space companies are now making rockets independent of the United States government. US Air Force USA They have recognized this and gone from the higher cost of competitive fixed price awards for single source contracts and national security launches.
More production cost?
Nine years ago, NASA began the process of building the space launch system rocket, choosing Boeing as the prime contractor for the vehicle’s center stage. Although most propellers used mature technology, including major space shuttle engines, conventional rocket fuel, and side-mounted propellers derived from the shuttle, NASA awarded additional cost contracts for rocket development. Building the central platform and assembling all the rocket technology was difficult, complex and unprecedented, the agency said.
Rocket has said what critics have said about cost contracts in terms of urgency. The rocket is already three years behind schedule for its first launch and is unlikely to fly at least in mid to early 2021.
However, SLS builders say the rocket is now in production, as Boeing is almost complete with the central first stage, and work on a second vehicle is just beginning. “The SLS is the only rocket powerful enough to send Orion, the astronauts, and the supply to the moon in a single mission, and no other rocket in production is as deep as the rocket launch system today. You can’t send too much cargo. ”Program manager John SLS SLS Honeycutt said this week.
On Wednesday, NASA announced that it was negotiating a contract with Boeing to buy 10 core stages of SLS. The press release doesn’t mention costs: NASA and Boeing have never been transparent about costs, but, of course, the cost of production and operation for a single SLS launch would exceed $ 1 billion. Nor does it refer to the contractual mechanism.
Agency spokeswoman Catherine Hambleton told Ars that the terms of the contract have not yet been finalized. “NASA estimates that the contract will be a hybrid of cost plus incentive rate and cost plus reward rate, which can go at a constant constant price,” he said. “Cost incentives are designed to reduce costs during initial production to allow for the lowest possible unit prices for later scheduled price missions.”
It does seem remarkable that a government contractor gets a more expensive contract to build a rocket that has almost a decade to build, and one that has moved into production, and based on legacy technology. Yes, it is. However, in their negotiations with NASA, companies like Boeing (and Lockheed Martin, who had recently signed a similar agreement for the Orion spacecraft) know they have strong political support.
In the case of SLS Rocket, the Alabama delegation, which includes a senator who effectively writes the agency’s budget, has clarified that financing the SLS rocket is its priority. So in this case, while NASA did not want to award Boeing an additional cost contract for the SLS rocket for the next 15 years, it may have few options.
What is most remarkable about Programmisa’s Artemis Moon is that, as agency leaders have reiterated, the most complex technical component of the program is not the rocket. Rather, it is the human landing system that will carry astronauts from lunar orbit to the surface and vice versa. However, the Artemis program lacks strong support from Congress. As a result, companies competing to build lunar landers will compete for fixed-price contracts.