SpaceX and Uncle Sam Shrug Off Billion-Dollar Blame Game

The federal government doesn't insure the satellites it shoots into space.


Space X Rocket

Did you know that the government doesn't insure the cargo it sends into space? That means that when a satellite carrying government cargo explodes during or after launch, taxpayers are left footing the entire bill. This issue has become topical with the recent loss of a Northrop Grumman satellite launched by Elon Musk's privately-owned company SpaceX earlier this month. Shooting a satellite into orbit is obviously inherently risky; however, that is all the more reason to protect taxpayers when the federal government contracts with private companies like Musk's.

We know little about the contract or the mission of the launch itself because that information is classified. What we do know for sure is that on Jan. 7, a top-secret satellite (code-named "Zuma") was launched on one of SpaceX's Falcon 9 rockets. Though the rocket didn't explode upon launch this time (something that has happened twice in recent years), the satellite—which is rumored to have cost upward of $3 billion—seemingly failed to maintain orbit and is believed to have ended up in the Indian Ocean.

About the only other thing we know is that taxpayers will eat the loss. In fact, because the mission was classified, we can only speculate as to which government agency was responsible for the mission, not to mention what went wrong.

When questioned by a Bloomberg News reporter, Pentagon spokeswoman Dana White responded, "I would have to refer you to SpaceX, who conducted the launch." When SpaceX officials were questioned, they announced that they were as pleased as punch with their performance. SpaceX President Gwynne Shotwell noted, "After review of all data to date, Falcon 9 did everything correctly on Sunday night." In other words, it's someone else's fault.

Shifting the blame onto others fits the pattern of SpaceX officials. In its previous failures, the company blamed explosions on faulty parts supplied by other contractors. Shotwell added, "If we or others find otherwise based on further review, we will report it immediately." But those words are not reassuring, given that the classified nature of the mission could help SpaceX obfuscate responsibility—especially if enabled by the federal agency responsible for the mission. Indeed, NASA refused to disclose to the public any of its findings after the 2015 explosion of a Falcon 9, which destroyed $118 million worth of taxpayer-financed cargo.

One might conclude that for whatever reason, the government agencies that contract with SpaceX are afraid of making the company look bad. According to a source of mine in the government's space launch universe, SpaceX is viewed as being able to "get away with murder." Perhaps Musk's extraordinary connections in Washington (his companies have received billions of dollars in subsidies and government contracts) have enabled more favorable terms. Or perhaps the bureaucrats who negotiated and signed the contract set taxpayers up for the fall because, hey, it isn't their money—and it isn't as if the government agency they work for will go out of business.

Nobody expects every attempt to expand our presence in space to be free of mistakes and complications. However, taxpayers are owed an account of what went wrong when these missions fail—even in cases in which the payload is of a classified nature.

Indeed, the need for oversight and accountability with government contracts will take on added importance because SpaceX is expected to carry astronauts to the International Space Station in the near future.

Sadly, the lack of transparency works to the favor of a Congress uninterested in putting America's fiscal house in order. After all, it's hard to shame the ruling political class into action when citizens have no idea what's actually being done with their money.


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  1. According to a source of mine in the government’s space launch universe, SpaceX is viewed as being able to “get away with murder”

    And no matter how many employees, Marines, female buzz-cuts and sequels they write off as expendable, the Interstellar Commerce Commission always lets them get away with it.

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  2. Expensive satellite.

    It does feel like SpaceX does have a decently large number of malfunctions. Not sure I would be to happy making a satellite for them, to trust it gets to space alright.

    1. Their failure rate is nothing abnormal and is above industry average. There is a reason why SpaceX has secured 60% of the private launch market for 2018. They offer lowest cost at above average reliability.

      That said in this case, it wasn’t even SpaceX’s fault. See my post below.

      1. I admittedly do not know much about success rates of launches, I probably just think this because of a few big news stores of SpaceX rockets blowing up with expensive payloads onboard.

      2. Did you mean below industry average?

  3. Is this article on purpose trying to be deceptive?

    “Based on the data available, our team did not identify any information that would change SpaceX’s Falcon 9 certification status,” Lt. Gen. John Thompson, commander of the Air Force’s Space and Missile Systems Center, told Bloomberg News in a statement. This assessment came after “a preliminary review of telemetry that was available to us from” the Zuma liftoff, Thompson told Bloomberg News

    This shouldn’t be shocking since SpaceX had a live video feed of their launch which showed no issues (we couldn’t see the separation though since that part was classified). When Zuma was tracked it entered the correct orbit and flew around the earth 1.5 times in its designated orbit

    This only left 3 possibilities:
    1 Zuma’s 2nd stage connector failed to separate. This launch did not use SpaceX’s connector but one made by Northrop Grumman
    2 Northrop Grumman’s Zuma failed to activate
    3 The spy satellite being “lost” is just a cover

    And under none of those scenarios is any of it SpaceX fault. Not sure why there is an initiative to specifically go after SpaceX. Is this article funded by the 10 million dollar Koch campaign against SpaceX? You didn’t even mention the POSSIBILITY of it being Northrop’s fault despite all facts pointing to it

    1. Oh and forgot to add, your idea to insure classified payload is silly. For you to do that, you need to get the insurance company clearance to the classified payload to fully inspect it. Even SpaceX despite launching it couldn’t touch the payload. The cost to insure such things while maintaining secrecy would be astronomical

      1. I certainly agree.
        As much as I have my reservations towards M. Musk and his various ventures this article reads like a hit piece, plain and simple.
        By all public account it would seem that the launch engine performed as expected and whatever happened did so at latter stage, which was most likely not under SpaceX control.
        In any case classified launches are pretty common and bitching about their lack of transparency is nothing short of silly.

      2. “Oh and forgot to add, your idea to insure classified payload is silly.”

        Eh, I don’t think so. If SpaceX or Northrup Grummann don’t want to reveal details of their plans in order for the insurance company to assess risk, then the insurance company is free to use the worst case scenario in writing their policy.

        “What’s in the satellite?”
        “That’s classified.”
        “Okay, we will assume if it crashes in a populated area, it will kill all the residents. Here’s your insurance policy to indemnify against that risk.”

        1. Which is why it is much cheaper to self insure whenever you can.

        2. That’s not even the main reason not to insure–the whole point of insurance is to have relatively deep pockets accept risk from someone with relatively shallow pockets. It only makes sense when the different sensitivity to risk is great enough to outweigh the moral hazard, verification and other costs of insurance.

          Since the Federal government has the deepest pockets of any organization in the history of the world (or at the very least, of any organization currently in existence), it really doesn’t make sense for the feds to ever take out insurance on anything.

          1. Since the Federal government has the deepest pockets of any organization in the history of the world (or at the very least, of any organization currently in existence), it really doesn’t make sense for the feds to ever take out insurance on anything.

            And they don’t. Every vehicle? Not ensured. My dad used to work for the feds in a supervisory position, and on more than one occasion had to go and bail out employees who were involved in an accident in a government vehicle and were arrested because they couldn’t show proof of insurance.

            1. That’s really interesting!! It’s nice to hear that the federal government has made a sound, economically justified decision about something 🙂

            2. To be technically correct, they are self-insured, not uninsured.

      3. There are any number of federal contractors that get security clearance. Is there a law prohibiting insurance company employees from getting it?

        1. That misses the point. The whole idea of security is to limit knowledge to need-to-know. The more people who know a thing, the more likely that one of them will make a mistake and the information will get out. You should have a good reason to add more people to the need-to-know list – and given the economics, underwriting an insurance policy is never going to be a good enough reason.

          Note: “given the economics” means acknowledging that in this situation, the cost of the insurance premiums will outweigh the risk-adjusted payouts in every possible scenario. There is no economic condition in which it is not better for the government to self-insure.

    2. “3 The spy satellite being “lost” is just a cover”

      Who would they be fooling though? China and Russia would still know the satellite is floating around unless this is some spy satellite that can evade satellite tracking facilities.

      In any event, you seem fairly knowledgeable about all of this. I do agree it seems silly to insure a government satellite, makes about as much sense as insuring a destroyer or tank.

      1. I further wonder if the government even could insure a satellite. Specifically, I’m having trouble imagining many insurance companies (yes, even the monsters like Lloyd’s) touching it. But I might be wrong, because I do know that insurance companies will cover an oil/gas floating platform which is one of the more expensive and complex creations of humankind.

        But to Theway’s point, the insurance company has representatives balls deep in every step of the (oil/gas platform) operation and deployment. So yeah, the company would have to be ‘in’ on whatever’s classified.

        1. Private commercial satellites are insured all the time.

          But yeah, insuring classified satellites would be a problem, for all the reasons stated.

        2. So what’s the problem with getting a few insurance guys cleared? Do they all volunteer for ISIS recruitment in their spare time or something?

          1. But what would be the point of getting insurance? The US government can self-insure for cheaper than any private company.

        3. I’m sure Lloyd’s could insure a 3 billion dollar product, but I can’t imagine that they would touch that at a price that would make any sense for the federal government, because the feds can suffer a 3 billion dollar loss more easily than Lloyd’s could. Lloyd’s made about 3 billion in profit last year, so a loss of that magnitude would wipe out a year. Cursory googling indicates than an oil rig can cost as much as 650 million, so we’re talking about 5 times that cost, and the risk of a satellite being completely destroyed is of course much higher than the risk to an oil rig.

          I actually wouldn’t be shocked if the classified nature of the satellite isn’t a huge problem, so long as the insurance was just for the launch, not for the successful operation of the satellite. I’m not sure how much the specific nature of a satellite matters for launch risk beyond it’s weight, shape and desired orbit.

          Most private commercial satellites are being launched by companies that have financial resources far below those available to insurance companies, so getting their satellites insured makes sense.

    3. 3 The spy satellite being “lost” is just a cover

      Pretending to lose it is a ploy that would last all of a day or two.

      It is nearly impossible to keep a satellite secret. You cannot hide its existence, only its mission and capabilities, and even then its orbit will give you clues on what its purpose is.

      The Chinese and Russians have radar tracking capabilities and would know if it crashed.

      Also, unless its really small and light absorbing, a satellite will be visible to the naked eye somewhere over the planet so even if other governments were to stay mum on the subject, amateur satellite hunters would within a few days or weeks be able to publish its location.

      1. Not necessarily true. There are masking technologies which, while not perfect, can make detection much difficult, and on top of that, it’s orbit isn’t public knowledge. Looking for a hard to see object when you don’t know where to look for it would be like looking for a needle in a haystack.

        1. “Looking for a hard to see object when you don’t know where to look for it would be like looking for a needle in a haystack.”
          With the current processing capacity, it’s not hard to find a broken part of the needle in that haystack.

        2. Assuming this guy knows what he is talking about (as far as I can tell he is well known in the realm of amateur spy satellite hunters) then they will have a pretty good idea where it should be if its still in orbit.

          I’m fairly certain that there has not yet been a successful secret satellite they haven’t eventually found.

    4. This seems like a total hit piece. I’ve seen similar pieces in publications like the Washington Post – owned by SpaceX competitor Jeff Bezos.

      Most of the commentary I’ve seen seems to suspect Northrup Grumman’s payload adapter.

      And calling out SpaceX for passing the buck on this? That’s all they are allowed to do. They cannot comment on the nature of a classified payload. Get mad a the government all you want for not disclosing anything about this. I’m certainly somewhat uncomfortable with the clandestine nature of it (we don’t even know what agency within the government the payload is for). But it seems like a big cheap shot to pick on SpaceX for following the rules. Speaking about the payload in any manner would likely risk them losing future contracts, along with any legal action.

    5. 3 The spy satellite being “lost” is just a cover

      I’m going with #3

      1. That’s what I think. All we have is a rumor that the satellite fell out of the sky – but nobody has been able to confirm that, and no one has contradicted SpaceX’s assertion that their rocket performed perfectly. My money says that satellite is right where it should be doing exactly what it’s supposed to be doing.

        1. See above. Ha and ha.

    6. Correct. The leaks from congressional staffers suggested that the satellite failed to separate from the 2nd stage. If this is the case, then the fault almost certainly lies with Northrop Grumman. As you said, they provided the payload adapter (the “connector”) for this mission.

      Without further information, it seems unreasonable to blame SpaceX if a spacecraft provided by Northrop Grumman failed to separate from an adapter provided by Northrop Grumman.

    7. Sure looks to me like they’re deliberately smearing SpaceX. All the evidence is that the failure wasn’t on their end of things.

  4. I do not agree that the government should buy launch insurance, or any insurance at all. Insurance is meant to smooth out unaffordable catastrophes. The price paid is that because there’s a middleman making profit, the averaged0out cost of premiums will be more than paying for the losses directly. I can’t afford to pay for a house fire or totaled car, so I buy insurance. The government can certainly afford to pay for anything broken, thus it makes no sense for government to buy insurance of any kind.

    1. Agreed. Insurance can be a very useful product to have, but it’s designed for those who cannot afford the loss. Leaving aside the fact that the country is actually in debt, the way the government operates is different. It can certainly absorb the loss (much to my chagrin). And, as stated above, you can’t realistically insure a classified payload. It would require letting the insurance company in on what it is. Even SpaceX was not allowed to see the payload itself.

      1. Why insure something if it’s not your money at risk?

        1. “Why insure something if it’s not your money at risk?”

          Why don’t you respond to the argument instead of changing the subject?

    2. Agreed.

      The insurance company doesn’t print money. The insurance company will cover the loss by raising the rates of other satellite launchers, which is pretty much going to be the government.

      The only difference between having insurance and not having insurance in this case are the payments that will be made to the lawyers who litigate the liability and the insurance company that has to make some profit to stay in business.

      Satellite launches aren’t insurable without a much bigger and diverse market.

      1. No matter whether or not they’re insurable (and yes, singular items are, in fact, insurable, and insured all the time), it makes no sense to insure relatively tiny purchases like this that will almost certainly cost you more to insure than the insurance would pay out.

        It is absolutely incredible that a PhD economist does not understand this

        1. for example, Quicken Loans had a billion dollar contest for March Madness 4 years ago (a reward for a perfect bracket). Berkshire Hathaway insured them,

          1. That’s a good example, and it’s something I hadn’t considered when writing my comment. Thank you!

            1. Closer to home, the X Prize was started by a guy who couldn’t afford the actual prize, but could afford to buy an insurance policy against someone winning the challenge.

    3. Right. This piece was based on severe economic illiteracy.

    4. The usually adept de Rugy has missed the point entirely here. If the insurance people are reasonably competent, they will charge a rate that *on average* pays for their losses, plus a bit more for profit. So, the government -being a frequent launcher – pays for the losses EITHER WAY. They pay in a lump sum after a disaster like this one or they pay an average on every launch. It’s wrong to criticize them for cutting out the middle man.

  5. “That means that when a satellite carrying government cargo explodes during or after launch”

    The satellite does not carry government payloads. It is the payload.

  6. Other commenters have beaten me to “satellite carrying government cargo”, the inanity of a suggestion to buy negative-expected-utility (as opposed to merely negative-expected-value) insurance, and the omission of facts and independent review.

    Let’s see what’s left for me [edit – broken up into sub-1500-character comments, because apparently we’re dumbing down Reason on multiple fronts, and “try to be more like Twitter” is one of them]:

    “According to a source of mine in the government’s space launch universe, SpaceX is viewed as being able to “get away with murder.”” is hopelessly naive. The government’s space launch universe right now falls into three categories: “NewSpace” companies (such as SpaceX), “OldSpace” private contractors (such as ULA, who charges 2x-4x more than SpaceX to launch), and public programs (such as SLS, which has sucked up $10 billion with the promise of a launch someday). Who do you think your source is a fan of, and why do you trust them?

    One Falcon 9 (CRS-7) exploded upon launch, not 2; the other (AMOS-6) exploded during fueling for a static fire test. Just a technicality, but if we don’t nip these games of telephone in the bud they just get worse and worse.

  7. CRS-7 did fail due to a supplier’s part; that’s not the “blame game”, just the truth. AMOS-6 failed due to SpaceX procedure, and their Falcon 1 failures were due to SpaceX mistakes (a bad bolt lost an Air Force cadets’ satellite on their first launch, LOX tank sloshing lost a demo satellite on their second, and an impact during stage separation lost three nanosats on their third). And on every one of those, SpaceX blamed themselves. For the Falcon 1 failures, Elon Musk literally blamed his own inadequacy as then-chief-engineer, which spot he had because at that time “I couldn’t hire anyone. Nobody good would join”.

    Trying to characterize this as the “blame game” is either unbelievably ignorant or deliberately deceptive. If the latter, I would suggest quitting clickbait journalism and finding a less morally corrupting line of work. If the former, I would suggest publishing a correction with visibility equal to the original failure.

  8. “Indeed, NASA refused to disclose to the public any of its findings after the 2015 explosion of a Falcon 9, which destroyed $118 million worth of taxpayer-financed cargo.”

    You can read the NASA Office of the Inspector General audit report here:

    The SpaceX investigation and the Launch Service Program investigation aren’t public reports, probably because ULA and Kim Jong-Un are both part of the public, and any detailed report would risk incorporating both trade secrets and ITAR-restricted information, but the investigation wasn’t *completely* shrouded in secrecy.

    “However, taxpayers are owed an account of what went wrong when these missions fail?even in cases in which the payload is of a classified nature.”

    When payloads are classified, part of the secrecy is that taxpayers aren’t even necessarily told the truth about whether the mission failed or not, much less about why!…..aked-fall/

    Is this a good thing? I’m also inclined to worry that it’s not. (Say, remember the Hubble, the headline-grabbing best space telescope ever available to astronomers? Did you know that espionage agencies had SIXTEEN OF THEM built, starting around a decade earlier, to point at Earth instead of space?) But whining that we got limited information about a classified launch is just the tip of that iceberg.

  9. As regards the performance history of SpaceX:

    A quick google search shows that the Falcon 9 is right around a 93-94% success rate. This is right around the industry average (seems to be 95%).

    Add to that the fact that SpaceX is pushing the boundaries of performance (their rockets can lift a lot more than similarly sized rockets from competitors), and that they do it A LOT cheaper (largely because they have learned how to land and reuse their rockets), and it seems to me they are a pretty darn good deal. The market seems to agree, as they had close to 50% of the global launch market share last year, and project to blow by that figure this year.

    1. Agreed. SpaceX has saved the US gov. and it’s private customers much more than the cost of it’s few failures to date. Those savings are likely to continue for the foreseeable future. I don’t understand all to hate towards Musk.

      1. The hate from the left is perfectly understandable, their hatred for individual success on terms other than their own. The hatred from supposed libertarians is another matter, and is probably along the lines of the “heretic is detested more than the unbeliever” etc…

        1. I’m not seeing any hate from the left towards Musk, he’s Noah building the electric Arc that will save civilization and the Jesus who will save our souls wrapped into one perfect being.

        2. “Hate from the left?” The left mostly love Musk for his environmental leanings. This shows willingness to shoot off bogus “hate from the left” blurbs regardless of any evidence. There is plenty of hate from the left. Portray it accurately.

        3. The libertarian hatred comes from the snake oil salesman funding his car and battery company on false promises, tax incentives not offered to other companies, and $8,000 rebates on $90,0000 cars. I’ve not seen much criticism of Space X.

          1. Oh, it’s there. Probably spillover from hatred of Musk’s other ventures.

            1. thanks for that link. i think we now know who the ‘source’ that de rugy quotes is. her article appears to heavily borrow from this nutty article.

              spacex is already among the most reliable launch providers, despite losing two payloads. this nut seems to think that they are still at the falcon 1 stage, trying to get a rocket into orbit.

              if you don’t understand just how close to a flat-earth nut this guy is, here’s an example;

              Also of note is that SpaceX’s Falcon 9, the rocket used for this mission, has massive past failures under its belt.

              as evidence of massive past failures he links to a washington post article titled ‘Elon Musk’s SpaceX suffers a rocket-engine failure during testing’. the problem? this is not true. they did not suffer a rocket engine failure during testing. they had a fire and explosion on the test stand due to a problem with the test stand. it had nothing at all to do with the rocket or engine, and certainly does not in any way qualify as a massive failure. this article was widely discussed and derided in the days after it was published, so quoting it in this context months later is inexcusable.

    2. If the launch of the Big Falcon is a success SpaceX could end up the dominating the space transportation commercial sector. Astonishing for a company that’s not even 20 years old, started from nothing and was told by the best space engineers in the business that what he was proposing to do was not possible with current technology. Christ, Musk is an amazing individual and the very definition of a disruptor.

      This article is deceptive, misleading and poorly argued. Nothing at all on how ULA had a no external bid contract with the US government and has been soaking US taxpayers for years and that Musk had to sue to be allowed to bid on future contracts.

      1. Musk is a crony capitalist of the highest order. He doesn’t deserve our accolades when he risks nothing by making his gambles with public tax dollars. A crooked visionary, just like Trumps father.

        1. musk has scooped up his share of subsidies and then some.

          but this comment is plainly stupid.

          spacex managed to win contracts to develop launch services for nasa under the cots program. until that moment it was all private money. and the cots program saved the government money – so a win-win.

          subsidies for tesla and solar city are different matters.

          but claiming he risks nothing is just willfully ignorant. musk very famously was days away from bankruptcy when the cots contract was awarded – precisely because he was risking everything in building the company.

  10. Insurance is a bad idea in a long term (multiple run) exercise. If the insurance company does its math right, the institution insuring something should pay 20% (or so) more on the insurance than simply accepting the losses. Insurance makes sense if you don’t have the money to cover the losses.

    So, as much as it pains me to say this, it’s good long term thinking to not insure these things.

    1. Exactly.
      The article never examines any cost/benifit ratio, it simply assumes it’s cheaper to buy insurance.
      Logic fail.

      1. It’s disappointing cause de Rugy is usually very thorough and logical in her articles.

  11. So the Zuma mission was classified making it difficult to know exactly what happened. My take is SpaceX did everything they were paid to do without issue and the fault for the mission’s failure lies elsewhere, probably with Northrop Grumman and their homebrew adapter (would have loved to have been a fly on the wall in the de-briefing conference meeting post launch). Someone also mentioned the Zuma mission patch has been pulled from the SpaceX gift shop and is no longer available.

    If SpaceX pulls off a successful test flight with the Big Falcon in the coming weeks I’m thinking ULA executives will know the writing is on the wall since this will put SpaceX so far ahead of everyone else in the space transport services business. Supposedly Boeing and Lockheed are looking to sell off ULA with Bezos as a potential purchaser if the price is right.

    1. this is exactly why everyone is so nervous. until blue origin’s new glen comes online, spacex is primed to own the commercial launch market. nobody is really in a position to compete head to head once the falcon heavy and block 5 are available.

      new glen could change all of that, being fully reusable, but it is still a way off.

  12. “the satellite?which is rumored to have cost upward of $3 billion?seemingly failed to maintain orbit and is believed to have ended up in the Indian Ocean.”

    the satellite is separate from the launch vehicle which was Spacex’s part of the project so I’d say Spacx is off the hook on this one unless the launch vehicle did not get the satellite into high enough orbit but that is not stated in the article

  13. Unless it’s in a time of war there shouldn’t be veils of secrecy that our government is allowed to keep, It just makes them unnaccountable and irresponsible. If that means that we can’t have spies and weapons development programs then we shluldn’t have spies and weapons development programs.

    1. Our government has been in a perpetual state of war for the last, I dunno, eighty or so years. Cold War, War on Poverty, War on Drugs, War on Sex Trafficking, War on Terror, and so on and so forth. War is the health of the state, and the state is quite healthy.

  14. we can only speculate as to which government agency was responsible for the mission


  15. Funny to see a Reason writer not understand insurance. When you insure a payload, you have to pay a premium on it. DoD and NASA has decided it is not worth it to pay the premiums for 18-20 launches a year and accept the occasional failure of a payload. BTW, DoD has excellent reason for being protective of SpaceX. SpaceX is charging $50-60 million for launches that ULA charges $120-150 million. As for the Zuma mission, USAF tracked the payload for 1.5 orbits before reentry. This strongly indicates the payload failed to separate. The separation mechanism was NorGru’s responsibility. Hence, loss cannot be blamed on SpaceX.

  16. What an absurd article. I can’t stand the SpaceX hatred, especially from a place like SpaceX launches are significantly less expensive and about as reliable as solutions that are both more expensive and with a lot more history. SpaceX is a private company funded only by investors and money from providing actual services.

    Based on both SpaceX and government comments, SpaceX did not have a failure here. Northrop Grumman built the 2nd stage connector *and* the satellite. Based on all that we know, it seems likely the failure was theirs.

    As far as I understand it, the only other “private” launch option in the US is the United Launch Alliance which receives almost $1 billion per year in taxpayer funds whether or not they launch anything to space:…..-payment/. And on top of that, their launches are more expensive than SpaceX.

    SpaceX is the best thing that has happened to space travel in a long time, and all without government funding. We should be celebrating their success, not bashing them in the news.

    1. First, I’m no fan of Musk; if it weren’t for subsidies, Tesla would have died a deserved death many years ago.
      “SpaceX is the best thing that has happened to space travel in a long time, and all without government funding.”
      Who do you think pays the SpaceX invoices?

      1. Paying for products is not funding a business. In business vernacular funding a business is providing capital to get the business up and running (i.e. ready to sell products/services). Getting customers to buy the products is how the capital providers (funders) get a return on their money.

      2. we know exactly who pays the spacex invoices. most of the spacex manifest today is commercial satellite companies. in 2017 they had 4 nasa launches, 3 other government launches and 10 commercial launches.

        nasa contracts for the development of a cargo service to the space station paid for a significant chunk of the falcon 9 development.

        but they are way, way, way, way cheaper than the way things were done before. the ula bid more than twice as much as spacex for the development of a commercial crew vehicle… and the government awarded both companies contracts. they are both moving forward at a similar pace. so unless you think saving a couple of billion on a government contract is a bad thing, i don’t get the objection.

        as stated above, ula gets a ‘readiness’ subsidy every year that amounts to more than spacex gets paid for actual launches – and it doesn’t pay for a single launch. spacex is also able to launch at a faster cadence despite the lack of a readiness subsidy. so at this point we are paying ula for absolutely no reason.

        1. ULA is being overpaid just to be there as a second option in case something goes haywire with SpaceX.

  17. I’m no actuary, but I’m pretty sure launching satellites into orbit is an uninsurable activity.

  18. The federal government is a “self insurer” as a general policy, the argument being that the taxpayers are stuck with lower costs by the savings in premium payments than they would be recovering claims. I don’t know if any study has ever been made to challenge that policy, but it strikes me that space missions still bear a sufficiently high failure rate that the insurance would cost a fortune even if the lost materials weren’t classified. As for SpaceX, sure, there could be some cronyism in play (when, after all, isn’t there?), but again it strikes me that the inherent risks involved, not entirely unlike general aviation risks, make it unlikely that any company would underwrite the gargantuan losses possible. *shrug*

  19. This satellite cost half of what’s indicated. Government contractors build in $ for cost overruns and failures. That’s how the Federal Government does business. Don’t be fooled and don’t blame SpaceX for yet another Federal Government failure to protect taxpayers from a failure in a highly dangerous business.

  20. I think we’re all missing the important question here, which is– Why is the US government naming secret satellites after the president of South Africa?

    Surely someone here can some up with a good loony conspiracy theory for this.

  21. Reason dumping on SpaceX again, what a surprise. Why are cosmotarians so ridiculous? SpaceX deserves mad props for both it’s business service and it’s success rate as a nascent launch provider. Musk can be criticized for taking subsidies, in his other ventures. I guess if one wanted to be really conspiratorial, they could argue all subsidies Musk takes for any enterprise are stealth SpaceX subsidies, because SpaceX is the flagship company and it’s enormously lofty mission (Mars) requires Musk to acquire wealth like a Vanderbilt if he’s going to accomplish it before his death.

    It seems like an obvious case of letting the perfect be the enemy of the good.

  22. Increase transparency, oversight and accountability of launches and launch contractors? Absolutely.

    Insurance for launches? Not so much. In fact, not at all. It’s just math. You don’t get that insurance policy for free. The premiums will more than eat up the “recovery” you’d get when a launch does fail.

    1. why on earth would you increase oversight and accountability of launch contractors? that’s turning the entire point of the commercial space movement on its head. intense oversight is exactly how space used to work. that’s how you end up with cost-plus contracts that have massive cost overruns.

      the new space economy is supposed to work on a simple fee for service model. you buy a ride for ten thousand kilograms of cargo to the international space station. not a rocket. not a launch system. none of that. just a delivery for a fee. the same will be true for delivering astronauts.

      you don’t buy an airplane and supervise the construction of the plane if you want to fly to paris. you buy a ticket from an airline. that’s what spacex aims to be.

  23. others covered this above, but i’m going to add my voice so maybe it gets heard more clearly.

    everything about this article is basically wrong.

    .. spacex is probably the most transparent aerospace company, not known for passing the buck or playing the blame game.

    …zuma is so secret that even the agency that bought it is a secret. Northrop-Grumman is the contractor and they supplied the satellite and payload adapter, and they packaged the satellite into the fairing. it is not ‘blame shifting’ to say that the launch vehicle performed as expected if in fact the launch vehicle performed as expected.

    … the handwaving speculation that spacex is using the secrecy of a classified launch to hide their failure is just implausible, given what we know. space enthusiasts track every launch and satellite. those same amateur satellite trackers have said that they tracked the second stage to a normal orbit and it deorbited itself according to a standard mission profile, neither of which would be compatible with a spacex failure. spacex has no control or influence over these amateurs, so a coverup is a silly thing to speculate about.

    1. … they have had 2 losses of payload on the falcon 9,
      …….one was due to a faulty strut failing during flight – they detailed exactly what procedure they used to determine the problem, exactly how they found out that the contractor was not supplying parts that complied with their specification and exactly how they were remedying the situation.
      ……..the other was due to a problem with a spacex part – the copv helium tank – which was due to a new densified fuel procedure which caused lox to crystallize inside the carbon fibers of the tank, causing a fire and explosion

      ….spacex commercial customers have publicly stated that they viewed the data from the zuma launch and are satisfied that the rocket is fine and are going forward with their launches

      i’d say that your source has his own biases. anyone claiming that spacex gets away with murder in an industry where pre-spacex contracts were all cost-plus instead of fee for service and progress and foibles wererarely shared publicly has an ax to grind. love them or hate them, they are far and away the most transparent company in the industry. they live stream all of their launches and provide some telemetry as well. you can fault them for overly optimistic timelines, but not about ‘getting away with murder’.

      this article is just plain indefensible.

  24. just to put a bow on it, there are so many errors in this article that an honest editor would issue a retraction and withdraw the article.

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  26. Indeed, the need for oversight and accountability with government contracts will take on added importance . . .

    No apparent need since the republic started. Why now?

  27. I never heard of “reinsurance” until I moved to Manhattan and a neighbor ran a Pine St reinsurance business which lost big on the shuttle disaster in the ’80s .

    I know an insurance guy who gets to the Space Conference in Colorado Springs each year because that’s his market .

  28. Start working at home with Google! It’s by-far the best job I’ve had. Last Wednesday I got a brand new BMW since getting a check for $6474 this – 4 weeks past. I began this 8-months ago and immediately was bringing home at least $77 per hour. I work through this link, go to tech tab for work detail.


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