GOVERNMENT CONTRACTING

New NASA Policy Opens Up Space Market

With NASA's plans to privatize the launch of manned flights, companies -- including SpaceX -- are starting their engines.
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SpaceX, PayPal founder Elon Musk's upstart aerospace company, last week began piecing together the first version of a new rocket that could someday launch American astronauts into the stratosphere.

This is spacecraft on a shoestring: To avoid costly, custom-made parts, the 900-person, eight-year-old company relies on refurbishments of those already on the shelf. Among them: An Apollo-era 125,000 gallon liquid oxygen tank (price tag: $86,000, the price of the scrap metal). As a result, the estimated cost of one of Musk's launches is a relatively affordable $100 million.

It's all part of Musk's plan to usher in the era of low-cost space travel – well-timed, because last week's NASA 2011 budget request included a $6 billion boost over five years to privatize human space flights. The budget also cancelled the beleaguered Constellation program to build new rockets aimed at returning astronauts to the moon by 2020. (NASA poured $9 billion into Constellation with only one semi-successful test launch and years of delay as a result.)

The launch of SpaceX's black-and-white 735,000-lb. Falcon 9 – tentatively scheduled for March 8 at Florida's Cape Canaveral – would pave the way for 12 supply flights carrying a minimum of 20 tons to and from the International Space Station, per the company's $1.6 billion NASA contract.

SpaceX's isn't the only ride NASA can pimp – the new space policy opens up healthy market competition. Dulles, Virginia's Orbital Sciences (an Inc. 500 alum) is building its own rockets under a separate NASA contract.

On Feb. 2, NASA also announced $50 million in awards to support the commercial spaceflight efforts of five other companies. Colorado's Sierra Nevada Corp was the big winner, picking up $20 million to develop its seven-person Dream Chaser craft. Amazon.com founder Jeff Bezos's Blue Origin won $3.7 million to develop a launch escape system and build a crew-carrying module, and Paragon Space Development Corp (No. 953 on Inc.'s 2009 5000) won $1.4 million to perfect its environmental control and life support air vitalization system. Other winners: Boeing, which picked up $18 million for its own seven-person space capsule, and the United Launch Alliance, a Boeing-Lockheed Martin joint project, which received $6.7 million to develop a way to monitor the health of unmanned rockets that could be recycled to launch manned spacecraft.

SpaceX's Falcon 9 launch is already at least two years behind schedule, thanks to development delays and mounting regulatory requirements. So the pressure is on for a successful launch – something that took the company four tries with its sleek Falcon 1 booster.

Musk – who has funnelled about $100 million of his own money into SpaceX – publicly insists the company financially can survive four Falcon 9 failures. (Whether the company can withstand them from a PR standpoint is another question.)

"There should be absolutely zero question that SpaceX will prevail in reaching orbit and demonstrating reliable space transport," Musk told employees after the third unsuccessful launch of Falcon 1 in 2008.  "For my part, I will never give up and I mean never."

Last updated: Feb 17, 2010

COURTNEY RUBIN

Inc. contributing editor Courtney Rubin was for five years a London-based staff writer for People magazine. Rubin, a former senior writer for Washingtonian magazine, has written for the New York Times magazine, Time, Marie Claire, and other publications. She is the author of The Weight-Loss Diaries.




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