In 2011 NASA made a predicted cost estimate of the Falcon 9 launch vehicle using the NASA-Air Force Cost Model (NAFCOM). NAFCOM is the primary cost estimating tool NASA uses to predict the costs for launch vehicles, crewed vehicles, planetary landers, rovers, and other flight hardware elements prior to the development of these systems.
NAFCOM is a parametric cost estimating tool with a historical database of over 130 NASA and Air Force space flight hardware projects. NAFCOM uses a number of technical inputs in the estimating process. These include mass of components, manufacturing methods, engineering management, test approach, integration complexity, and pre-development studies.
Another variable considered by NAFCOM is the relationship between the Government and the contractor during development. At one end, NAFCOM can model an approach that incorporates a heavy involvement on the part of the Government, which is a more traditional approach for unique development efforts with advanced technology. At the other end, more commercial-like practices can be assumed for the cost estimate where the contractor has more responsibility during the development effort.
For the Falcon 9 analysis, NASA used NAFCOM to predict the development cost for the Falcon 9 launch vehicle using two methodologies:
- Cost to develop Falcon 9 using traditional NASA approach, and
- Cost using a more commercial development approach.
Under methodology #1, the cost model predicted that the Falcon 9 would cost $4 billion based on a traditional approach. Under methodology #2 NAFCOM predicted $1.7 billion when the inputs were adjusted to a more commercial development approach. Thus, the predicted the cost to develop the Falcon 9 if done by NASA would have been between $1.7 billion and $4.0 billion in fiscal year 2010 current dollars ($2.1 billion and $5 billion fiscal year 2021).
SpaceX has publicly indicated that the development cost for Falcon 9 launch vehicle was approximately $300 million. Additionally, approximately $90 million was spent developing the Falcon 1 launch vehicle which did contribute to some extent to the Falcon 9. for a total of $390 million. NASA verified these costs but did not perform a detailed analysis to explain the significant differences between the cost estimates and SpaceX actual costs. However, SpaceX attributed their cost efficiencies to three primary factors: lean workforce, vertically integrated organization, and minimal infrastructure.
Additional information for the curious