Energy & Resources

NASA To Fork Out More For Cargo Deliveries In The Space

NASA’s 2020 program for delivery of commercial cargo to its International Space Station will include three players instead of the earlier two involved in the first round of delivery contracts. But, the cost will reflect a 14% increase on a per kg basis as compared to the last delivery in 2012.

The increased cost of cargo delivery for its CRS-2 contracts can be attributed to three factors, the first being a sharp increase in prices from SpaceX, the major provider. The second reason is the addition of a new player in the field. Besides SpaceX and Orbital ATK, Sierra Nevada Corp has also been awarded contracts in the competitive bidding which took place in 2016. This will lead to incurring of extra cost by NASA for integrating the additional docking and berthing costs of the third aircraft. The costs have jumped from $63,200 per kg to $71,800 per kg for deliveries between 2020 and 2024.

Higher prices quoted by SpaceX seem quite surprising in view of the lesser costs incurred by them in the mission’s first phase of delivery as compared to NASA’s other provider Orbital ATK. View is held that the reason could either be under-bidding by SpaceX in the earlier phase of supply contracts or it could not achieve its cost saving goals. The rationale given by SpaceX is the 30% increased cargo volume holding capacity from its Dragon-2 Spacecraft. Additionally, missions can be prolonged to longer durations and faster re-use of Dragon 2 spacecraft on its return back to Earth with science samples will be possible.

The price hike will be ushering some advantages to NASA. The addition of more pressurized cargo capacity gained by NASA will necessitate lesser flights for completing the deliveries consequently reducing the capture, loading and unloading cargo time of the astronauts from resupply spacecraft. The inclusion of a third player will offer NASA greater flexibility in planning for the cargo deliveries.

The report published by Inspector General, Paul Martin of NASA had indicated a hike of $400 million in the second phase of cargo delivery. However, all is not lost for NASA, notwithstanding the increased costs!

Arpit Mehta

Arpit is a well ripened fruit in the field of finance and markets. When it comes to numbers, nobody can catch this guy’s hand. Needless to say that he does not require a calculator, he himself is the calculator for the Market Global News’ team. In his free time, you will find him grabbing a cup of coffee with his friends.

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