Re: Delta 4 Costs

This comes out to an annual subsidy of fixed costs of about 540 million for
Boeing Delta 4 and 410 million for Lockheed Atlas 5.
Since Boeing Delta 4 depends entirely on the air force contracts (at the
moment), I read this as Boeing has managed to extract $540 million a year
from the air force by threatening to leave the launch business, while
Lockheed picks up a reduced subsidy because it doesn't have a heavy lift
facility on the west coast, or a heavy lift vehicle. Thus Lockheed will get
2 billion over the next five years, and forgoes the pleasure of suing
Boeing, which would benefit mostly the lawyers.
The air force gets two launch vehicle families for assured access. The U.S.
taxpayers get the shaft, but it's small change by DOD standards.

Murray Anderson

"Ed Kyle" <edkyle99@xxxxxxxxxxx> wrote in message
news:1163966555.583738.288550@xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
Boeing was awarded an EELV "Launch Capability Contract" on November 17,
2006.


"http://today.reuters.com/news/articleinvesting.aspx?view=CN&storyID=2006-11
-18T000342Z_01_N17180075_RTRIDST_0_ARMS-BOEING-UPDATE-1.XML&rpc=66&type=qcna
"

The $674 million award reportedly covers the period 6-1-06 to 9-30-07,
during
which time Boeing is expected to fly only four Delta IV launchers.
That is an
average of $168.5 million per launch. The award only covers fixed
costs, so
the marginal launch costs will be added to this figure. In other
words, Boeing
is being paid $674 million only to provide and support the
infrastructure needed
to build and launch Delta 4s.

This information is entirely consistent with the GAO prediction that an
average
EELV launch would cost $234 million.

Atlas V appears to be costing substantially less than Delta IV.
Lockheed
is being paid $815 million for a similar Launch Capability Contract
that runs
from 10-1-05 to 9-30-07, during which time it is expected to fly 6-8
Atlas V
rockets - an average of $101.9 to $135.8 million per launch (again, for

fixed costs only), 20-40% less than Delta IV.

Altogether, the two EELV programs are costing an average of $913
million
per year just for the fixed costs, which are being funded to be able to

support a grand total of only eight launches per year. To date,
however,
no more than five EELVs have flown in a given year.

- Ed Kyle



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