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Comment Re:Its not a commercial craft (Score 4, Informative) 217

Commercial versus non-commercial is about a company building a standard product which the government utilizes through firm fixed price contracts. SpaceX has a published price for a launch, and that's exactly what they charge. In contrast the traditional NASA approach has been to award cost plus contracts to major contractors and an army of subcontractors and NASA is more of a partner than a customer, building a one-off custom design. In this type of system cost overruns often get billed to the customer (NASA), but with firm fixed price the work is expected to be completed for the agreed upon price and SpaceX has stated that any cost overruns on their NASA programs above the fixed price launch costs will be covered by SpaceX, not NASA.

Contract vehicles notwithstanding, it also appears that even in NASA's opinion SpaceX is simply more efficient at getting things done than the usual NASA & defense contractor method probably due to reduced management and organizational overhead: http://www.nasa.gov/pdf/586023main_8-3-11_NAFCOM.pdf

A big part of SpaceX's efficiency is that they are vertically integrated, doing most of the work themselves. With the non-commercial cost-plus model Congress had the ability to split up subcontracts for the shuttle development and manufacturing across the entire nation, with drastic hits to efficiency.

Although it may not seem like a totally commercial enterprise with NASA as the major source of SpaceX's revenue (for now), but there are important changes taking place in how NASA is acquiring launch capacity which seem like they have the capability to reduce costs over the past model

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"The fundamental principle of science, the definition almost, is this: the sole test of the validity of any idea is experiment." -- Richard P. Feynman

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