Dragon Development Will Be Expensive

After several days of reading and thinking about SpaceX winning a NASA space station resupply/recrewing demonstration contract, I have come back to Alan Boyle's thorough article that he wrote for MSNBC right after the award.  Buried near the back of the article is the fact that Musk expects to invest $200 million on Falcon 9/Dragon development in addition to the $278 million to be provided by NASA, or a total of $478 million.  Even though I probably shouldn't be, I'm a little shocked at the development price tag and the scale that it implies.

Will SpaceX be a 400 employee max operation -- a small, lean company, with low operating costs?  Or will it be something on a different scale, with the bureaucratic trappings of a large company?  To burn through a half a billion dollars cash in 4 years would seem to require a larger organization, even considering the partners that SpaceX brought on board.  So far, SpaceX has burned through about $100 million so far and might have 200 or 250 employees.  How much should you budget for rocket personnel nowadays?

One thing is for sure:  I have confidence that SpaceX will resist the temptation to spend too much money on launch infrastructure.  Two years ago, I wondered at the extreme infrastructure that I assumed would be required for manned launch capability (things have changed in the last two years so that now it's funny to read what I wrote at that time).  But Musk recently stated that not much more infrastructure is required on Omelek island for Falcon 9.  If SpaceX decides to launch out of Cape Canaveral Air Force Station, we will see whether the infrastructure requirements are more extensive.  Also, perhaps SpaceX will take the opportunity to purchase more manufacturing and test facilities.

In the half billion dollar figure, perhaps Musk is including development already completed  -- i.e., the total investment for Falcon 1/9/Dragon will be nearer $500 million instead of $600 million.  Another possibility is that he is including some development work on the Merlin 2/3 engines or the high energy upper stage engines.  It doesn't seem likely that Musk will idle his engine design team, now that he has assembled it.  Or maybe he is including some facilities and tooling that would be required for the BFR.  This is fun speculation.

Props go out to Jon Goff for beating the drum about NASA's bloated "Stick" launcher program (or Shaft, as Jon puts it).  But are the above numbers making it clear that alt.space also is going to be spending money on a scale not previously envisioned?

Comments

[Neil H.]

> Buried near the back of the article is the fact that Musk expects to invest $200 million on Falcon 9/Dragon development in addition to the $278 million to be provided by NASA, or a total of $478 million. Even though I probably shouldn't be, I'm a little shocked at the development price tag and the scale that it implies.

I'm not sure how the COTS contracts are worded, but the implication I got was that as long as you met the milestones, the money didn't have to necessarily to go towards a particular project, but could go towards other projects or even be pocketed as profit. It's possible that SpaceX just took a gamble and wrote a very large profit margin into their contract, and still managed to have a contract more appealing that their competitors.

[Jonathan Goff]

Dan,
That is interesting. At SpaceX's burn rate (which looking at the numbers appears to be about $200k/person/year), that would imply something like 600 people on board. That's a lot of people.

OTOH, as you start building and flying more hardware, it's possible that the raw materials, and purchased parts cost relative to headcount could go up substantially. For instance, since they're planning on mass producing engines, the amount of money per head will go a lot higher. I'm not completely sure, but it seems plausible. 30 engines is quite a decent production run. At MSS we're also doing regen cooled pintle engines, but on a much, much smaller scale. We had at one point been contemplating a production run of as many as 20 engines, and that would've been a chore to get through, even though our engines are something like....150x smaller than theirs.

Of course, between them and all of their teaming partners, it wouldn't be too ridiculous to get that high of a head count...maybe.

That's just a mind bogglingly large amount of money anyway you slice it. And the ATK Shaft is going to take 10x as much and not even deliver a capsule with it? With no engine-out capabilites, probably costing something like 2-4x as much per pounds?

Cryin shame.

~Jon

PS Now all I need to do is get a vehicle flying well enough that we can convince Elon to pay us to trick-out the Dragon with powered landing mods....

[Daniel Schmelzer]

Neil: As far as I know, you are correct, although I thought you had to provide a business plan with a good bit of detail about additional investments. Don't know how much wiggle room NASA gave.

Jon: I agree that the $200k/employee @ 600 employee figure is plausible, but while writing the post I imagined a $175k/employee @ 800 employee figure, which would put the company about twice as large as I originally imagined.

[bad_astra]

They will have to contract out with other companies for a lot of the hardware for Dragon and Falcon 9. There is where the cost increases appear.