CHAPTER 6

NASA PROGRAM CHANGES

On March 15, 1972, NASA issued a fact sheet that presented its position on the estimated costs of the space shuttle and its economic justification. As a part of our review, we obtained from NASA a breakdown of its figures in a format similar to that used by Mathematica. This is shown in the following table.

Costs for the new expendable launch system are not included in this table because NASA did not estimate the cost of this kind of space transportation system. NASA officials stated that the March 1972 estimates shown above included an explicit allowance for cost growth due to scope changes. These officials did not advise us of the amount of this allowance, and we did not verify that an allowance for cost growth had been included in the estimates.

Using procedures followed by NASA, we reviewed the economic justification for the representative configurations from Mathematica--the solid and liquid booster shuttles--in the context of the NASA March 1972 estimates. We did not examine into the economic justification of NASA's March 1972 estimates. These estimates differed from the respective shuttle estimates from Mathematica in the following respects.

1. A tug and space station initial operating capability of 1985 instead of 1979.

2. A flight mission model of 581 flights instead of
514.

3. The costs expressed in 1971 dollars instead of 1970 dollars.

As shown above, placing Mathematica's estimates in the context of NASA's estimate changes the estimated launch system life-cycle cost of the solid booster shuttle from $13.1 billion to $14.6 billion and of the liquid booster shuttle from $13 billion to $14.2 billion.

Figures 7 and 8 show the results of our review of the representative configurations in the NASA context. As shown in both these figures, the shuttles are economically justified, according to the investment criteria of chapter 3, if cost growth does not exceed about 20 percent. If either of the configurations--the solid or the liquid booster shuttle--experiences more than a 20-percent cost growth, it would not be economically justified.

LIFE

LIQUID BOOSTER SHUTTLE

Figure 8

$50

$48.3

CHAPTER 7

COST PER LAUNCH

Estimates of the average cost per launch are critical determinants of the shuttle's economic justification. This chapter reviews the effects of variations in the cost per launch on the shuttle's economic justification.

This critical area was selected for review because of (1) the cited importance of the reduced cost per launch to the shuttle's economic justification and (2) the uncertainty of current estimates. Uncertainty stems from the nature of problems faced by the shuttle designers and the as yet unproven approaches and techniques incorporated in the shuttle development plans. Problems faced by shuttle designers that could cause changes in the cost per launch include, but are not necessarily limited to, the requirement for (1) reusability of the orbiter's rocket engines, (2) reusability of the booster rocket engines, and (3) refurbishment of the orbiter.

The shuttle's actual average cost per launch will not be known until the system reaches operational status. Consequently these costs cannot be estimated with certainty. On the other hand the information available from Mathematica's economic studies can be used to calculate the level of growth in the cost per launch that can be tolerated without changing the shuttle to an economically unjustified status.

Figures 9 and 10 show that if either the solid booster shuttle or the liquid booster shuttle experiences a growth of more than 75 percent in the cost per launch, assuming no growth in other parts of the total space program cost for the shuttle system, it will no longer be economically justified.