The latest presentation to the Future In-Space Operations (FISO) study group is now posted in the FISO Working Group Presentations Archive. Both slides (pdf) and audio (mp3) are available for the talk, Skylab II, Making a Deep Space Habitat from a Space Launch System Propellant Tank – Brand Griffin, Gray Research – Mar.27.2013

Rushing headlong hand in hand with NASA into the past, Mr. Griffin wants to use NASA’s revived Saturn V to build a revised Skylab space station (though, in this case, for deep space rather than for LEO):

Note that Mr. Griffin compares the cost of a Delta IV to the fairy tale $500M cost for the SLS. This number comes from NASA’s absurd use of fantasy marginal cost estimates when asked for the cost of its launch vehicle missions.

Say the SLS program averages one to two flights per year. If the cost is $3B per in the years with one launch and $3.5B in the years with two launches then NASA will claim that a SLS flight costs $500M (i.e. the marginal cost, which is the cost to produce one more unit output). This is obviously ridiculous. The meaningful cost is $6.5B/3 = $2.17B per flight.  For low production numbers, it is only the average cost that is significant, not marginal cost.  (Usually NASA just guesses how much one more flight would cost but I used this year to year comparison to make the marginal cost more explicit.)

Of course, unlike normal enterprises, the development cost of the SLS, which will be around $20B for the initial  70mT  version, should also be spread over the launches but NASA ignores development costs just like it ignores annual  infrastructure/fixed costs.