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Date: 11 Jun 91 13:54:24 GMT
From: ssc-vax!bcsaic!hsvaic!  (Dani Eder)
Subject: Re: Freedom Cost

In article <30959@hydra.gatech.EDU> ccoprmd@prism.gatech.EDU (Matthew
DeLuca) writes:

>Remember, Freedom was a <$10G program, too, when it started.  If EOS
>turns out to be more than that, does that mean you are a liar?  After all, 
>you accused the NASA leadership of lying about Freedom costs back when 
>they were calling it an $8G program.
>Alternately, can we consider the possibility that they made an honest
>mistake when they thought it was $8G?  Allen Sherzer just stated that 
>EOS is a $30G program, so if he's right you'll need to make up your mind
>pretty quick.

Having been on the Space Station Program from a month after Boeing
was awarded the Work Package 1 contract, and having been the person
responsible for the life cycle cost numbers at the time (I am no longer
with the Space Station program), perhaps I can shed some light on
this discussion.

The wide range of numbers quoted for the Space Station may all be
correct, because they refer to different costs.  Here are the
different types of cost:

Life Cycle Cost: The total cost of a program, including everything.
It is defined as Development Cost+Production Cost+Operations Cost.

Development Cost: All costs which are non-recurring, through the
first flight-ready unit.

Production Cost: Costs which recur on the 2nd through nth units.
Depending on the part of the space station, this varies in extent,
for example there will be about 200 equipment rack frames built,
so this item has lots of production cost, but the life sciences
glove box is a unique item, so it is all developmental, with no

Operations Cost: Everything that happens after Development and
Production, i.e. launch, assembly in orbit, and use.  Most of
the life cycle is incurred here.

The above costs include everything associated with the program.
Now we come to costs which are defined by NASA accounting methodology
(i.e. which have no necessary connection with physical reality)

Program Funding: Those costs which appear as line items in the
NASA budget under the heading "Space Station".  This item excludes
NASA personnel salaries and costs of running the basic centers
(office realted costs).  Those costs appear under "Research and Program
Management".  This item also excludes the cost of launches, which
is under the "Space Shuttle" budget line.

Contracted Cost: This is the smallest number, it is the dollar value
of contracts let to prime contractors and support contractors
specifically for Space Station harware and services.  Contracted cost
is a subset of Program Funding, the difference being an internal
'tax' the NASA centers assess each program to cover the cost of
general purpose research and development equipment.  Examples of
such are: neutral buoyancy tanks, vacuum chambers, and test stands.
These items are used by multiple projects, so they are each assessed
a share in the cost of operating them.

Now for some examples:

Initial development cost quoted to Congress in 1984: $8 billion
Budgeted development cost in 1988, in 1984$:	$10 billion
Budgeted development cost in 1988, in
	then-year dollars (dollars spent
	in future years adjusted for expected
	inflation)				$16.5 billion
Program Funding over life of program
	(includes 30 years of operations)
	Development	$16.5B
	Production	1-2B
	Operations	$50B
	Total					$68 billion
Life Cycle Cost
	Program Funding	$68B
	Launch costs (160 shuttle launches
		@ $340M each=$54.4B
	NASA personnel costs @ 20% of above
		= $25B
	Total					$147.4 billion

Percentage of total NASA budget attributable to Space
Station: $147.4/40years=3.685billion/year = about 25% of total
NASA budget (at present levels).

Dani Eder
Advanced Civil Space Systems

Date: 17 Jun 91 18:19:05 GMT
From: ssc-vax!bcsaic!hsvaic!  (Dani Eder)
Organization: Boeing AI Center, Huntsville, AL
Subject: Re: Freedom Cost

In article <> (Brian Yamauchi) writes:
>>Operations Cost: Everything that happens after Development and
>>Production, i.e. launch, assembly in orbit, and use.  Most of
>>the life cycle is incurred here.
>But if the the shuttle launches are a separate ($54.4B) item here, and
>so are personnel costs ($25B), what does the $50B under Operations
>Cost pay for?
>Does this figure include additional modules?  (It seems that expanding
>the station would probably fall under either Development or
>Production.)  Or do they just expect it to cost 1.25B/year for
>maintenance, supplies, and repairs?

Operations cost is by definition money that goes to contractors,
since internal NASA costs (personnel, building maintenance,etc.)
are funded out of the "Research and Program Management" item.

Part of the $1.5 billion per year is the internal NASA tax to pay
for continued operation of Neutral Buoyancy tanks, vacuum chambers,
etc. that are used by more than one program.  Each program is assessed
a share of the cost of these facilities, and the actual money ends
up with contractors who do the maintenance and operation of the

Another big chunk goes for payload integration.  Teledyne-Brown
Engineering and Lockheed are major subcontractors to Boeing for
US lab equipment and experiment racks.  They have to take a piece
of equipment that an experimenter has built, mount it into a rack,
hook up all the utilities, test it, write software for the space
station computers to run the experiment, or alternatively write
procedures for the crew to run the equipment, train the crew,
put the rack in with all the other racks for that mission set
into the ground simulator (essentially a hangar queen US lab
module made from the prototype #1 unit off the production line,
the #2 unit goes into space), see if the experiments make
trouble for each other (EMI, etc.).  And all of this takes place
in class 100,000 high bays with certain areas at class 10,000
(they are building a clean room about the size of a football field
to build the SSF modules in).

Oh yeah, then there is packing the logistics modules for each flight,
i.e. loading the food and clean clothes, unpacking the waste
(concentrated urine brine, dried fecal matter, dirty laudry and
trash), spare parts maufacturing and warehousing, contractor
personnel at the ground control center, etc.


>Where does the oft-quoted $30B figure come from?  Is this development
>costs + shuttle launches for the initial configuration?

That is probably the cumulative cost through assembly complete,
which can be found by simply taking $5B spent so far plus $2.5B
per year through the 90's (this is what NASA wanted to spend,
not what they'll get)

>Finally, does this mean that NASA is only 25% over their original
>proposed cost ($10B vs. $8B)?  And was Congress aware in 1984 of the
>difference in expense between the proposed cost and the life-cycle

Yes, accounting for inflation, the cost is not that much over the
original estimate.  After all, from 1984 to today there has been
35% inflation, and projecting to the mid 90's ( the midpoint of
development), then the total inflation will be about 58%, so the 
$16B development cost translates back to $10B in 1984, or about
25% over the original number.

As an institution, I doubt Congress is aware of anything in the sense
of a sentient being.  But seriously, the life cycle number did not
exist in 1984.  It was first calculated by me for Boeing in 1988, and
as far as I was able to determine, a number was not developed at
any higher level (Program office in reston, VA, or NASA HQ) for official
use.  Anyone familiar with the program requirements document and the
annual expenses for the shuttle program could worked out the LCC,
but it was not done on an official basis.

The reason I developed the number for Boeing was I was the lead
engineer for trade studies, and I needed cost tradeoff numbers
for other people to use.  Our objective was to make choices that
lowered the overall life cycle cost of the program.  This is what
led us to closed water and air loops in life support.  Subsequently,
closure of the air loop was deferred a few years to lower the annual
expenses in the early years (i.e. now), even though the total LCC
went up because now you have to develop an oxygen supply system
working off of tanks for a few years in addition to developing
the closed system that recycles CO2.  

This is one way messing with the annual budget drives up the total
cost of the program.

Dani Eder

From: (Dani Eder)
Subject: Re: LaGrange colonies: are they needed?
Date: Jun 27 1996
Newsgroups: (Leonard Erickson) writes:

> (James Nicoll) writes:

>> 	It seems a little cheap, given that the US space station (Alpha,
>> I  think. Used to be Freedom) has sucked up, what, 10 billion dollars with-
>> out putting bolt one into orbit.

And for comparison, the 777 program sucked up about the same amount of
money ($10 billion) before the first airplane was delivered.  And the
Space Station and the 777 both have roughly the same amount of pounds
of hardware in them (300,000 lb for 777 and US portion of the Station).

Now that we have the design and the factory set up, we could crank out
about 2 station modules per year for no more than $400 million per
year (because that's what we are doing now), and keep that up forever.
Assuming normal cost reduction curves for higher production rates,
If you built 1000 station modules, you would expect the unit cost to
fall to $50 million.  Each module can supply life support for 4 people,
so that's 4000 people for $50 billion.

Dani Eder

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