SLS and Orion costs – the third rail of cost estimating

The usual conference room is crowded, with shiny surfaces and glass saying formal and stuffy, as I break in to ask my question about the numbers that seem way too low. What about “support”? Or re-phrasing, away from the specific and toward a broad sense, “The budgets have been much higher, so why is this so much less?”

“That’s not included,” is the reply. This classic answer is followed by silence.

The awkward pause comes as no one says those costs will be covered later to complete the picture or addressed anytime soon. Caution. No one wants to touch the third rail of cost estimating. Accompanying the cost estimate for the project will be a vague and barely noticeable disclaimer. This is the cost estimate if we exclude most of the costs. Those are the endless guidelines, assumptions, and obscure caveats for the project’s numbers, translated here from NASA-speak.

If you are inclined to continue down the rabbit hole of what NASA projects cost, talking shop after the meeting leads to a confession. The estimator admits NASA’s numbers do not follow – how do we say – “generally accepted accounting principles.” Predictably, projects exclude as many costs as possible to look good. Later, to look even better, the project divides the initial cost estimate by pi for a list of reasons documented on one obscure chart in tiny print from three years earlier, slide fifty-seven, in the backup.

“We can’t include all these costs, as they are capabilities NASA maintains regardless of projects.” This is the end-state of these conversations in which I participated, often. I learned enough to be dangerous. Naturally, you jump to technology to improve a space system. To add context, you seek an understanding of the system the technology might go into. From there come justifications, improvements in performance, or costs.

This back-and-forth on NASA cost estimates is where inquisitiveness goes to die.

Talking about support, capability, or the infamous “infrastructure” in NASA cost estimating leads to surreal moments. “That’s not included” – is the response, over and over. You might be led to believe that new technology does not reduce costs, and neither do new ways of doing business. But what’s not included in a cost when accounting for dollars does wonders. One trick is to get a project going as long as possible without officially starting. Many years of costs will later be excluded from the racking and stacking of funds spent. “That was pre-formulation. It’s excluded.” But it was the same contract, and it began the work? Again, an answer referring the questioner to another obscure chart with a diagram, arrows going in circles, and “guidelines” for the estimate.

Fair enough. If the cost is not here, it must be over somewhere. So long as we know the amounts, who cares about the labels? So, how much is it? “We can’t show that, or it puts a target out there.” A target? “A target when someone goes looking for money due to a budget shortfall.”

This back-and-forth on NASA cost estimates is where inquisitiveness goes to die. It is a line of questioning that does not endear the inquirer to the presenter or project management. Conflicts of interest abound, as next time the analyst that did cover all the costs finds out management is getting another answer – from a different analyst.

These conversations are not the most surreal I have experienced in the years I spent estimating program, project, and technology costs. These are the relatively tame stories from the land of the costs. They are telling but only touch the surface of more significant challenges. For a Dali-level of surreal, melting clocks and all, you must jump to a word salad that should draw respect in the annals of word saladry. In 2017, replying to more impertinent questions about costs, an answer came back. Even for me, this one was new. It sounds so reasonable in a world of quaint blurbs about a bias for action. We hear this project is organized for results, not to make life easy for bean counters. If you want, “costs must be derived.” Then, we discover the project’s position is they are not required to derive those costs. (Laugh track in the background.)

…a picture of the cost of NASA’s major projects can be – derived.

Yet, because there are NASA budgets and public websites that track NASA contract data, and curiosity and perseverance aren’t only rovers on Mars, a picture of the cost of NASA’s major projects can be – derived. For the NASA SLS rocket, the Orion spacecraft, and ground systems, these numbers are consistent with other’s totals. (Also with the NASA IG and GAO.) The new magic trick is figuring out the pieces one level (and more) below the totals. Once you have the pieces, “I just stick’em together.”

“I farm bits and pieces out to the guys who are much more brilliant than I am. I say, “Build me a laser” this. “Design me a molecular analyzer” that. They do, and I just stick ’em together.”

Jeff Goldblum (Seth Brundle) in “The Fly”

In short, following the rule that Congress assigns funds to SLS, Orion, and ground systems, the “derived” parts and pieces come from knowing if it’s not here, it must be over somewhere. Prime contracts get inordinate attention and cause confusion, even in reports by experts that assume readers know these are not all costs. (This context is usually overlooked.) Parse these all, and the remainder reveals the vast labor elsewhere at the different NASA centers with the parts and pieces. Prime. Ground. Civil servants. Capability and support. All gobbledygook, of course. But it’s not a bad start at understanding costs, where, who, and for what.

In inflation-adjusted dollars, things get interesting. Adjusted for inflation to 2024, SLS/Orion costs to date are higher, about 85 billion dollars. This exceeds the development costs of the Space Shuttle, about 78 billion dollars, also inflation adjusted to 2024. Except the SLS, Orion and ground systems have a way to go to being declared operational. There are endless “puts and takes” analysts might reasonably debate here. Which years should be included under a project, vs. not as “pre-formulation” or ongoing work towards operational missions years away. These nuances will not change the broad strokes of SLS, Orion, or the Shuttle’s development costs. Shifts in definitions will usually lower or raise both costs in lockstep. And for any debate, it’s always worth remembering we can move on, toss some cost out of the development dollars, and put them over in operations. These are easier debates than they appear, if only for that reason – if it’s not a cost to get something done (development), it must be a future cost after it’s working (operational.) Trivially, if it’s not here, it must be somewhere else.

The truly valuable debate occurs over value – cost by the mile traveled in space? Or to where? Learning how much? By the scientific value returned? Or in light of other options, in comparison by the pound, person-year in space, or the science per dollar. Time will tell.

There was another routine item in NASA cost estimating circles, a theme about anything Shuttle derived – “reduced costs through use of existing hardware and facilities.” Perhaps, if the savings is not here, we can find it somewhere else.