NASA’s dilemma: governments don’t do innovation

by John Hollaway
Monday, July 16, 2018

Two books have dominated my professional life as a manager and entrepreneur. One, a novel, is about leadership and its failures. This is The Caine Mutiny, written by Herman Wouk and published in 1951. The other, an autobiography, is about management and its failures. This is Slide Rule, written by Nevil Shute and published in 1953. If you haven’t already, read them, particularly if you are young and newly entered into the world of aerospace. Then, freshly aware of the follies of humankind and its institutions, contemplate the fate of NASA’s Space Launch System (SLS) project, where both reputation and funding are at risk.

According to a report released by NASA’s Office of Inspector General in April 2017, the agency will spend roughly $23 billion on the SLS, which should be launched in 2020 with a somewhat heavier payload capacity than its closest commercial counterpart, SpaceX’s Falcon Heavy (77 tons vs 63 tons to low Earth orbit). However, SpaceX has demonstrated the reusability of its boosters, while those of the SLS remain expendable. Two, SpaceX, started launching Falcon 9 rockets at about the same time as the SLS was inaugurated, and by now its Falcon 9 rocket has had more than 50 launches (including a couple of failures) and put a total of 550 tons into space.

SpaceX charges about $62 million for a Falcon 9 capable of placing up to about 22,000 kilograms into low Earth orbit. The company has not disclosed its development cost but a NASA report several years ago estimated its development cost $440 million. Quite remarkable.

By contrast, the SLS rocket, together with the Orion crew vehicle, represent all that is wrong with—well, perhaps it is unfair to say “that organization.” Rather, better to say “the way that organisation has evolved.”

The problem with NASA is vividly demonstrated by the figures that NASA itself came up with when it investigated the development costs of the Falcon 9. For the investigators gave chapter and verse to show that if NASA had created this vehicle, the cost would have been about three times greater. So far, the SLS project has had a cost approaching $20 billion and has yet to have a single launch. Contrast this with NASA’s own estimate given above of $440 million for the development of the (admittedly much smaller) Falcon 9.

It should be noted, in fairness to NASA, that it provided several hundred million dollars to fund the development of the Falcon 9 through the Commercial Orbital Transportation Services program and that the reasons for this dramatic difference in costs boil down to the political pressures that NASA is under. For it must subcontract as widely as possible on a cost-plus basis to keep congressmen happy, it is obliged to follow up on expensive technical developments that might benefit the industry in the long term, it has a massive, dispersed infrastructure to support, a commitment to keep the taxpaying public informed, and much of its management time is spent dealing with a host of oversight committees.

By contrast, SpaceX just concentrates on the business of building rockets, doing it mostly in its own factory. The key to its lightness of foot is that it innovates as it goes, nothing is fixed. Indeed, one of its executives has said that no two of its rockets were exactly the same. The real advantage SpaceX has is that, because manufacture is almost all in-house, there is no need to renegotiate a contract to incorporate an improvement; all it needs a shop floor agreement between the designer and the accountant.

And the relevance of The Caine Mutiny and Slide Rule? Well, NASA might be compared to the flawed Captain Queeg, clinging glassy-eyed and greenish-faced to the engine room telegraph on the bridge of the U.S.S. Caine, a big minesweeper being tossed like a coracle amidst the furies of a typhoon. Queeg is adamant in obeying fleet orders, but the course set would put her broadside to a gale that would drive the ship over. Hence the decision of the Exec, Tom Maryk, to take command—mutiny!

A dramatic mutiny against the expensive course set for the SLS may never occur. Instead, as it becomes quietly accepted that the SpaceX (and Blue Origin) innovations have removed the underlying logic from SLS, its funding will shrink until nothing very much is happening. Then, perhaps, a more modest version of the Orion crew module will take man back into space atop the Falcon Heavy or SpaceX’s planned BFR vehicle.

And Slide Rule? The novelist author, Nevil Shute, was fortunate not to be killed in the First World War, and when peace came studied engineering at Oxford. He worked as an intern, as we would call it now, in the embryonic de Havilland aircraft company and ended up, about five years later, working on an airship—the R100. The British government had decided, on the strength of the success of the German Zeppelins, that they should get into this business as well, and not one but two airships were to be built. The key difference was that R100 was to be constructed by the private sector (in this case the defense company, Vickers) and the R101 by the government, specifically the Royal Airship Works at Cardington.

The R100 was completed on time and in budget, although many details were changed and many innovations made. The R101 was over budget and late in completion because the original design had features that, it turned out, could only be incorporated at great cost and delay and with doubtful value. But incorporated they were.

The R100 completed its trials and undertook a successful maiden flight to Canada. However, the R101 was to take the Air Minister to a conference in India, and to meet this deadline the final work was rushed and the trials were omitted. It crashed in Northern France, killing the minister and 47 others.

Nevil Shute set out the reasons for this disaster. They were, he wrote in 1951, “fundamental to the incursion of a government department into industry and are the same today, whether the product be airships or guided missiles.”

Specifically, governments impart a rigidity into what should be a fluid situation. Once a decision has been made it cannot be easily altered; public money has been committed and must not be thrown away, even if the reason for spending it has vanished. To give an example, in the case of the British airships the original plan was to use diesel engines, more efficient and with a less flammable fuel. But such engines were still little developed and turned out to be much heavier than expected, requiring the belated insertion of extra gasbags in R101. The R100, not being publicly committed, decided to stick with petrol engines and the original envelope design. The R101 could not say “we were wrong” without diminishing its political masters as well as itself, and so it flew away dangerously underpowered.

The SLS is not a R101, but its builder, NASA, is no doubt conscious that it has a unique place in the eyes of Americans (and elsewhere) as a source of wisdom in all matters concerning space. It is this sentiment that has enabled it to continue to spend over a billion dollars annually on the SLS. But now, with the likes of SpaceX and Blue Origin, the space launch business has at last evolved from being a crusade into an industry. This is as it should be, but it has left the original crusader in acute danger of losing its money or its reputation. Or both.

John Hollaway is a retired mining consultant and developer of the Swala reusable launch vehicle concept.

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