I love this article on Bob Bigelow of Bigelow Aerospace, who along with others is competing in the X Prize competition for $10 million to build a private space ship.

The space station will cost approximately $200 MILLION when it’s completed, versus the current International Space Station which has cost $50 BILLION – 250x more.

“The technology itself isn’t that complicated,” Bigelow says. “But we’ve had to reinvent the process. Instead of handing out fat contracts to all of the usual suspects, the big contractors, we’re doing this on our own, looking for the best deals we can find. The big contractors have been charging NASA 50 times what something costs. They did it because they could get away with it. Not us. We haven’t accepted a dime of government money.”

 To understand just how revolutionary Bigelow’s projected cost savings might be, consider the International Space Station. By 2010, this troubled project will have cost a total of $50 billion, will be 10 years behind schedule and will contain about half of the habitable work space that had been planned, around 550 cubic meters. Just two of Bigelow’s planned modules will exceed the entire work space of the ISS, but since the modules will cost around $100 million apiece, the savings become obvious. Two hundred million dollars vs. $50 billion is quite a difference, enough of a difference to entice other private companies into the new space race.

It discusses the standard pricing methods for the U.S. firms servicing NASA that sound a lot like the aprocryphal $10,000 USD toilet seats we have all heard about:

When Bigelow’s engineers told him they needed a high-tech valve that would serve as a key component of the life support system on board the inflatable modules, Bigelow went shopping. American aerospace giants were willing to sell him the valve at costs that ranged from $300,000 to $1 million. Bigelow found and purchased the same valve from a European company. The cost for the identical valve? A mere $5,000.

 “This is pretty typical of what’s wrong with the American aerospace industry and with American companies in general,” Bigelow says. “Whether it’s steel or automobiles or textiles, Americans have priced themselves out of the world market. Now our dominance in space technology has evaporated as well. We don’t have a space shuttle or a space plane, and our American launchers are simply not affordable for the delivery of any large systems.”

 Bigelow was able to purchase a life support system from a German company. The complete system cost only $1.3 million. If he had purchased the same system from American companies, it would have cost in the neighborhood of $100 million, he says. It isn’t hard to understand why European, Chinese and other space efforts are now eclipsing those of the United States, why commercialization of space has been stymied, and why NASA has called for a shakeup in how our nation conducts its space business.

It also demonstrates that the adventurer-capitalist ethic is alive and well down there in the Las Vegas desert:

Bigelow admits that many people thought he was a bit goofy to pour his money into a project that is, to put it mildy, a longshot. Bigelow himself figures he has only a 50-50 chance of ever getting his money back, let alone of making a profit. But of course, it is his money, and since his is not a publicly traded corporation, the only stockholder he needs to answer to is Mrs. Bigelow. So far, she’s on board.