Minimize ISS: Pricing

ISS: Updated Commercial and Marketing Pricing Policy of NASA Services

References

NASA introduced a new pricing policy for Commercial and Marketing activities of ISS services as of March 2021, in addition, NASA is reviewing and assessing the pricing policy for Private Astronaut Missions. 1)

NASA has reserved a set amount of resources intended to serve Commercial and Marketing Activities, as shown in Figure 1. The ISS services are:

1) Available for purchase

2) Shall be provided only on a non-interference basis; and

3) Subject to change if crew safety (including Private Astronauts), vehicle safety, and/or mission objectives are at risk.

ISS-Pricing_Auto2

Figure 1: USOS (United States On-orbit Segment) Resources Allocated for Commercial Usage (not to scale), image credit: NASA

All Commercial and Marketing Activities that use space station resources shall require a Reimbursable Space Act Agreement (RSAA) or another arrangement with NASA to recover costs to NASA. U.S. Entities may not resell purchased resources under any circumstances.

NASA is restricted from competing with the U.S. private sector; therefore, if, at any point, a U.S. Entity is available to provide any of these resources, NASA shall, to the best of its ability, migrate the provision of such services to the non-U.S. government provider.

Since the release of the initial pricing policy in June 2019, there has been a growing demand for commercial and marketing activities from both traditional aerospace companies and from novel industries. The pricing policy from June 2019 did not reflect full reimbursement for the value of NASA resources; it was intended to stimulate the market and was planned to be adjusted. Based on discussions with stakeholders, the current market growth, and in anticipation of future commercial entities capable of providing similar services, NASA has updated the Commercial Use Activities pricing policy in Table 1 effective immediately.

The new pricing for Commercial Use Activities reflects full reimbursement for the value of NASA resources and applies to proposals submitted under NASA Research Announcement (NRA) NNJ13ZBG001N Focus Area 3 Purchase of Resources for Commercial Purposes. NASA is still accepting proposals submitted under NRA NNJ13ZBG001N Focus Area 3, and those proposals will be subject to the updated prices and evaluation criteria. NASA is in the process of reassessing the value and amount of available resources for Private Astronaut Missions and plans to update the pricing policy in Table B shortly. These prices are for the specific purposes noted in this policy. Requests for items outside of this policy will be assessed on a case by case basis and will have alternative pricing.

ISS-Pricing_Auto1

Table 1: Pricing Policy for Commercial Activities associated with NRA NNJ13ZBG001N Focus Area 3

Obviously, this decision of NASA has caused considerable consternation by all customers involved in commercial ISS activities.


Press echoes to the NASA decision

• March 4, 2021: NASA has sharply increased the prices it charges commercial users of the International Space Station for cargo and other resources, a move that has left some companies confused and frustrated. 2)

- NASA announced Feb. 25 that it was revising the commercial marketing pricing policy it first published in June 2019 as part of a new low Earth orbit commercialization strategy. That policy, which set aside a fraction of station resources for commercial applications beyond research and development, included a price list for resources such as cargo to and from the station and crew time to carry out work.

ISS-Pricing_Auto0

Figure 2: The change in NASA's pricing policy for commercial use of the ISS means that companies that used to pay $3,000 per kilogram to get cargo to the station now have to pay $20,000 per kilogram (image credit: NASA)

- In the statement, published with little fanfare on the agency’s website, NASA said it was updating that price list “to reflect full reimbursement for the value of NASA resources.” The decision to do so, NASA said, was based on “discussions with stakeholders, the current market growth, and in anticipation of future commercial entities capable of providing similar services.”

- By removing the subsidy, the prices of those services went up significantly. The cost to transport one kilogram of cargo up to the station, known as “upmass,” went from $3,000 to $20,000. The cost to bring that one kilogram back down from the station, “downmass,” went from $6,000 to $40,000. One hour of crew member time, previously $17,500, is now $130,000.

- The sudden change in prices, which took effect immediately, took some ISS users by surprise. An executive with one company, who spoke on background because that company is still evaluating the impacts of the pricing change, was not aware of NASA’s decision to raise prices until contacted by SpaceNews.

- “NASA has not done a good job communicating with the stakeholders,” said Jeffrey Manber, chief executive of Nanoracks. “We are in discussions with customers and suddenly we are being notified of a major increase.”

- That sudden increase in prices, he said, forced Nanoracks to suspend discussions with two potential customers, who he said were “priced out of their budget” by the increase.

- That sudden increase in prices, he said, forced Nanoracks to suspend discussions with two potential customers, who he said were “priced out of their budget” by the increase.

- Another executive, speaking on background, was not aware of any discussion by NASA about changing the pricing policy ahead of the announcement. The increase, the executive said, could lead some customers to seek alternatives.

- NASA didn’t elaborate in its original statement on its decision to go to what it calls “full value” pricing beyond its statement. Manber said such a change should have been first discussed by the NASA Advisory Council’s Regulatory and Policy Committee, on which he serves, but that the issue had not come up at its meetings.

- In a statement to SpaceNews March 5, NASA said it stated on the pricing policy page on its website Jan. 26 that prices were under review, and notified companies that had submitted “Commercial Use” proposals that prices would soon be adjusted. “Nearly two years have passed since NASA released the initial pricing policy,” the agency stated. “The pricing policy from June 2019 did not reflect full reimbursement for the value of NASA resources; it was intended to stimulate the market and was planned to be adjusted.”

- Manber said that NASA may be reacting to language in a report accompanying the final fiscal year 2021 appropriations bill, which provided NASA with just $17 million for LEO commercialization efforts, compared to its request of $150 million. The report instructed NASA to provide Congress data on projects selected through its LEO commercialization effort on the station, the total costs incurred by NASA for the delivery and execution of them, and how much NASA will be reimbursed.

- The report also prohibited NASA from using funding “to subsidize the cost of any project that is primarily intended for marketing, advertising, or entertainment purposes.” That appeared in reaction to criticism the agency faced for some commercial ISS initiatives, like flying Estée Lauder cosmetics to the station for a photo shoot or the possibility of filming a movie starring actor Tom Cruise on the station.

- Manber argued that NASA should “fine tune” the pricing policy, charging full price for those marketing and entertainment activities but continuing to subsidize resources for other commercial work, such as those activities that also have an education angle. “I believe there are commercial projects, along with education efforts and partners, that bring value to the International Space Station. They show American leadership,” he said. “There’s a nuanced discussion that needs to be made with Congress and NASA.”

- In its statement, NASA noted that “there has been a solid demand for commercial and marketing activities from both traditional aerospace companies and from novel industries.” However, it said that while it considered an “interim” pricing update that still offered some subsidization of prices, the report language “is clear that no appropriated funds could be used to subsidize certain commercial use activities. Thus, less than full reimbursement was determined to be inconsistent with the report language.”

- NASA added that the pricing policy applies only to commercial activities on the station. “Other activities that are educational in nature, or scientific or research and development, can and should fly via the International Space Station U.S. National Laboratory. There is no change to process or costs for these activities.”

- The LEO commercialization policy also enabled private astronaut missions to the ISS, and provided a price list for resources such missions would need. That included $22,500 per person per day for crew supplies and $11,250 per person per day for life support.

- The revised list no longer includes any prices for services for private astronaut missions. “NASA is in the process of reassessing the value and amount of available resources for private astronaut missions and plans to update that pricing policy in the near future,” the agency stated.

- Axiom Space, which is flying a four-person private astronaut mission to the station in early 2022, is not concerned about any potential changes in prices. “Axiom was never relying on NASA to provide all the services they had listed, so this development would not affect us,” company spokesperson Beau Holder said. “It is Axiom’s intent to take care of itself and its crews on orbit.”

- Manber said he hopes that the revised policy is not the final word from NASA on the issues. “I’m hopeful that this is the beginning of a dialog on more mature support for commercialization.”

• March 5, 2021: NASA is laying the foundation for America to maintain a human presence in low-Earth orbit in which one day NASA will become one of many customers in a robust commercial marketplace. To realize that goal, NASA has opened the International Space Station (ISS) for business to enable commercial and marketing opportunities on the microgravity laboratory. 3)

- Since making these opportunities available, there has been a growing demand for commercial and marketing activities from both traditional aerospace companies and from novel industries, demonstrating the benefits of the space station to help catalyze and expand space exploration markets and the low-Earth orbit economy. As a result, NASA has updated its pricing policy for commercial activities conducted on the station to reflect full reimbursement for the value of NASA resources.

- In June 2019, NASA first released its commercial marketing pricing policy to establish subsidized pricing to stimulate and enable the use of resources on the space station. NASA anticipated revisiting the pricing policy periodically and adjusting prices as market forces dictated in response to interest, market growth, and competition (reference NID 8600.121). 4)

- The pricing policy from June 2019 did not reflect full reimbursement for the value of NASA resources; it was intended to stimulate the market and was planned to be adjusted. Based on discussions with stakeholders, the current market growth, and in anticipation of future commercial entities capable of providing similar services, the agency has updated the Commercial Use Activities pricing policy effective immediately.

- The new pricing applies to proposals submitted under NASA Research Announcement (NRA) NNJ13ZBG001N Focus Area 3 Purchase of Resources for Commercial Purposes. NASA is in the process of reassessing the value and amount of available resources for private astronaut missions and plans to update that pricing policy in the near future.

- For more than 20 years, NASA has supported a continuous U.S. human presence in low-Earth orbit. The agency is working to continue the development and growth of the low-Earth orbit economy. Low-Earth orbit provides a relatively cost-effective environment for crew training, fundamental and applied research, advanced systems development, Earth observation, space technology maturation and testing, as well as advancing testing of human health countermeasures in preparation for deep space missions, and, the newest focus area, commercial and marketing activities.



1) Michael Johnson, ”Commercial and Marketing Pricing Policy,” NASA, 25 February 2021, URL: https://www.nasa.gov/leo-economy/commercial-use/pricing-policy

2) Jeff Foust, ”NASA hikes prices for commercial ISS users,” SpaceNews, 4 March 2021, URL: https://spacenews.com/nasa-hikes-prices-for-commercial-iss-users/

3) ”NASA updates ISS pricing to "Full Value" for Commercial Activities,” Space Daily, 5 March 2021, URL: https://www.spacedaily.com/reports/
Updates_Pricing_Policy_to_Full_Value_for_Commercial_Activities_on_Space_Station_999.html

4) William H. Gerstenmaier, ”Human Exploration and Operations Mission Directorate,” NASA HQ, NID 8600.121, 6 June 2019, URL: https://www.nasa.gov/sites/default/files/atoms/files/nid_8600_121_tagged.pdf


The information compiled and edited in this article was provided by Herbert J. Kramer from his documentation of: ”Observation of the Earth and Its Environment: Survey of Missions and Sensors” (Springer Verlag) as well as many other sources after the publication of the 4th edition in 2002. - Comments and corrections to this article are always welcome for further updates (herb.kramer@gmx.net).

References    Back to top