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NASA Approves Partial Privatization of the Space Program

NASA's critics have long asked: Why does the space agency need to design and build its own rockets and spacecraft?

When the Justice Department or the Centers for Disease Control want to send employees somewhere, they don't specify the aircraft types, let alone design the airframes, engines and avionics. They just buy plane tickets.

Even the military finds it cheaper to use civilian aircraft for certain missions. So why should space transportation be any different?

NASA's beginning to agree. For the first time, after nearly a half century of building its own rockets and orbiters, it has approved the outsourcing of some of the equipment that enables its manned space missions to private contractors.

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Last week, acting NASA Administrator Chris Scolese told a congressional subcommittee that the agency plans to give $150 million in stimulus-package money to private companies that design, build and service their own rockets and crew capsules — spacecraft that could put astronauts in orbit while NASA finishes building the space shuttle's replacements.

On Thursday, the White House ordered a top-to-bottom review of the entire manned space program, one that will be led by former Lockheed Martin CEO Norman Augustine, long considered a friend of private space ventures.

Both developments show that the once-reluctant space agency and the Obama administration are ready to support commercial human spaceflight.

It's a dramatic change, one that could reduce America's dependency on Russia for the next half-decade after the space shuttle program ends, and one that could kick-start a space program that some see as having stalled for 40 years.

"Our government space program has become over-burdened with too many objectives, and not enough cash," says William Watson, executive director of the Space Frontier Foundation, a Houston-based group promoting commercial space activities. Watson said that allowing private companies to handle routine orbital duties could free up NASA to focus on returning to the moon and going to Mars.

Scolese said that $80 million of the stimulus money will be awarded to the company that demonstrates the best "crewed launch demo" — a prototype, based on existing cargo-capsule designs, modified for humans. The agency was careful to note that the competition will be an open one.

Two well-positioned spaceflight companies, SpaceX and Orbital Sciences, are seen as the leading contenders. Each already has a full line of rockets and cargo capsules ready to go, and each company's capsules can be converted to transport astronauts.

Both firms were tight-lipped about their suddenly increased opportunities. Orbital Sciences didn't respond to queries; SpaceX said only that it was "encouraged by NASA's commercial crewed services initiative."

But NASA's savings in cost and time could be significant.

The two leading contractors are building their launch vehicles from scratch. Their designs emphasize very efficient business models and low manufacturing costs. And they operate with at most a few dozen employees at their launch sites, as opposed to the space shuttle program's standing army of almost 15,000 workers.

NASA's hostility toward other American space ventures goes back at least to the early 1990s, when Lockheed Martin developed the DC-X suborbital experimental rocket, financed by the Pentagon's Strategic Defense Initiative Organization (SDIO).

The goal was to get payloads into orbit with a reusable craft that was not the space shuttle, which the Defense Department saw as unreliable and costly.

NASA was hardly enthusiastic about this approach. It believed that it would be many years before such Reusable Launch Vehicles (RLVs) would be ready to fly, and some inside the agency saw it as a threat to its monopoly on human space flight.

In 2000, NASA even objected to the cash-strapped Russian space agency's $20 million deal to send up the first "space tourist," American billionaire Dennis Tito.

But three things happened.

-- The February 2003 Columbia space-shuttle disaster, in which seven astronauts died, forced NASA to rethink its way of doing business. The Columbia Accident Investigation Board's final report "found a NASA blinded by a 'Can Do' attitude, a cultural artifact of the Apollo era that was inappropriate in a Space Shuttle program so strapped by schedule pressures and shortages that space parts had to be cannibalized from one vehicle to launch another."

NASA's tight relationship with a small number of major contractors and its persistent problems integrating political and legal demands with the need to maintain engineering excellence had stressed the agency to the breaking point, the report said.

-- In January 2004, President George W. Bush decided to "reboot" the space program, announcing his "Vision for Space Exploration" to go back to the moon and to eventually send humans to Mars.

-- And in October 2004, engineer Burt Rutan's SpaceShipOne won the $10 million Ansari X Prize. The rocket was the first privately built flying machine ever to reach space.

There was a catch to the Bush plan: As part of the ambitious new program, the 30-year-old space-shuttle program will end next year, saving NASA $3 billion a year to spend on new spacecraft, the first of which is scheduled to fly in late 2015.

But that has created a gap in America's ability to launch astronauts and cargo to the International Space Station (ISS). For at least five years, NASA will depend primarily on Russia to get Americans into space, which doesn't sit well with many space experts and politicians.

As a result, NASA quickly became much friendlier to commercial ventures. In late 2005, then-agency Administrator Michael Griffin announced that NASA was considering buying crew and cargo transportation services to the ISS from private industry.

"We believe," he said, "that when we engage the engine of competition, these services will be provided in a more cost-effective fashion than when the government has to do it," Griffin said.

In 2006, the first round of the Commercial Orbital Transportation Services (COTS) contracts was won by SpaceX corporation of Hawthorne, Calif., which received a contract worth $278 million, and by Rocketplane Kistler of Oklahoma City, which was supposed to get $207 million.

Space Exploration Technologies Corporation, or SpaceX for short, founded by PayPal entrepreneur Elon Musk, was already hard at work on its Falcon series of rockets.

It also had done preliminary design work on a multipurpose capsule called the Dragon, which could be adapted to carry either crew or cargo to the ISS on a Falcon 9.

SpaceX was funded mostly by Musk's personal fortune, but also had a small number of contracts to launch satellites for the Defense Department and from overseas.

Rocketplane Kistler, on the other hand, was an innovative but underfunded enterprise. It promised to build on an earlier RLV program that had failed to get off the ground after a promising start in the late 1990s.

In October 2007, Rocketplane Kistler's NASA contact was terminated due to its failure to meet the agreed-upon financial milestones.

The remaining $170 million from the Rocketplane Kistler disbursement was awarded to Orbital Sciences Corporation of Dulles, Va., for its Taurus 2 launcher and Cygnus capsule combination.

Orbital, one of the few entrepreneurial space firms that have successfully gone from start-up to billion-dollar status, not only builds the Pegasus and Taurus launchers, but also has established a decent reputation building small-to-medium-sized commercial and scientific satellites and space probes.

Most importantly, both SpaceX and Orbital Sciences are well-funded and commercially viable, a crucial factor to NASA.

If a private company shows it's ready to invest its own funds, that's a lot better than people who want to "help spend NASA's money," as Griffin once put it in a different context.

But not everyone in NASA's old guard is pleased with this approach.

"In order to preserve U.S. leadership in space, it would be better to invest in a lifting body lander, a spaceplane that would land on a runway like the Shuttle does now," Apollo 11 astronaut Buzz Aldrin, the second man to walk on the moon, told FoxNews.com. "There is a [NASA] design called the HL-20 that could be launched on an existing reliable rocket and could be ready for a demonstration flight in 2013."

But to the Space Frontier Foundation's Watson, the sky's the limit.

"Let's have an American competition in space — to create good jobs, fuel innovation and close the [spaceflight] gap more quickly," he said. "With private funds matching government investment, we can dramatically leverage taxpayer dollars to produce breakthroughs in a new American industry — commercial orbital human spaceflight."