Commercial Crew Market Study Generates Small Firestorm, Space News

"NASA spokesman Michael Braukus said the Aerospace Corp. analysis, paid for by the agency's Independent Program and Cost Evaluation office, led by Michael Hawes, is one of many commissioned to assess the business case for private space taxis. "The Aerospace Corporation used their own assumptions for many of the inputs to the analysis; they did not use proprietary data inputs from companies developing commercial crew systems or from NASA, which makes their analysis of limited use," Braukus said in a April 5 email, one day after a set of Aerospace Corp. briefing charts on the study surfaced on NASA Watch. The Commercial Spaceflight Federation (CSF), an advocacy group here, blasted the report's assumptions as not based in reality, and said many of its findings are flawed."

Aerospace Corp Study Dumps on Commercial Crew Prospects, earlier post

Aerospace Corp Background and Messages: Commercial Crew Financial Feasibility/Reliability White Paper

"Q. So the results are to determine what?

A. We produced a modeling tool that could be applied to a variety of data sets to produce conclusions about the costs associated with scenarios for a commercial crew transportation system. The results shown to NASA and Congress recently were not intended to represent any specific real world scenario. We modeled a scenario utilizing data from as long as 10 months ago in order to demonstrate the tool's viability, not the viability of any specific commercial crew transportation system."

Keith's note: Hmm ... if they did not use actual company data - or NASA data - then why do this in the first place - and why brief it to the Administrator, Deputy Administrator, and Associate Administrator of NASA? Shouldn't Bolden/Garver/Scolese be focusing on the "real world" - not Aerospace Corp's parallel universe?

According to the overview from actual 1 Feb 2011 report: [continued after the link] :

"In late 2009, The Aerospace Corporation (Aerospace) undertook an internally funded research project to assess the viability, from a business perspective, of a commercial crew transportation system provider. That work was subsequently expanded and refined through NASA Headquarters Independent Program & Cost Evaluation (IPCE) funded activities. The initial research was driven by the Aerospace's mission of understanding trends in space development, and was based on staff experience associated with modeling private enterprises engaged in the exploitation of space.

The research and subsequent analyses were conducted using preliminary models to provide ballpark results for what it would take to make a stand alone private enterprise business case close. The following is an overview of the primary findings:

- Using parametric analyses, aggressively low cost estimates, and an assumption of no flight failures, Aerospace determined that the price per seat (PPS) for a 4 person capsule could be well in excess of $100M (FYI0).

- Sensitivities derived from parametric inputs to the model, moving away from the aggressive cost assumptions, showed how costs could approach and go well beyond $200M per seat.

- Aerospace introduced private pay passengers into the analysis to develop a first order effect on how that would impact the ability to close the business cases. There appears to be a significant difference in the PPS the government would have to pay under sustainable commercial business cases and the amount the public might be willing to pay for identical services. Under these scenarios, the more private passengers there are, the more the government would have to pay to offset the one to two orders of magnitude reduced prices that the public would be willing to pay.

- NASA questions about acquisition options, our prior work on initial assessments of human-rating expendables, and our own assumption about "no failures" in the business case led us to examine options for developing a commercial crew transportation system that would have a goal of demonstrated reliability better than Shuttle. With overall reliability as a surrogate for safety, Aerospace's assessment showed the magnitude of the values necessary in the capsule, launch abort, and launch systems necessary to achieve such a goal. This analysis indicates that the capsule and launch abort system may have to be built to the most stringent of human rating options so that the launch system's estimated reliability would be consistent with a commercial approach to human rating. Aerospace's assessment also suggests that even with that combination, an order of magnitude or any improvement in total system reliability over Shuttle will be difficult to achieve or validate. Even with 14 to 17 successful flights in a row of an identical system, demonstrated reliability will be well below that of the Shuttle and most expendable systems.

Searching for business cases that closed, Aerospace did find that, under the assumption of no flight failures and for the lowest levels of government investment and commercial unit costs that we evaluated, a 7 seat capsule flying 2 NASA missions a year plus 70 private pay passengers over 10 years, did yield a 25% IRR to the service provider (thereby closing the business case). However the company's cash flow did not go positive for 12 years indicating a remarkable (unbelievable) series of no failures."