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National Aeronautics and Space Administration

Commercial Orbital Transportation Services

A New Era in

NASA/SP-2014-617

Commercial Orbital Transportation Services

A New Era in Spaceflight On the cover:

Background photo: The terminator—the line separating the sunlit side of Earth from the side in darkness—marks the changeover between day and night on the ground. By establishing -industry partnerships, the Commercial Orbital Transportation Services (COTS) program marked a change from the traditional way NASA had worked.

Inset photos, right: The COTS program supported two U.S. companies in their efforts to design and build transportation systems to carry cargo to low-Earth .

(Top photo—Credit: SpaceX) SpaceX launched its on May 22, 2012, from Cape Canaveral, Florida. (Second photo) Three days later, the company successfully completed the mission that sent its Dragon to the Station. (Third photo—Credit: NASA/Bill Ingalls) Orbital Sciences Corp. sent its rocket on its test flight on April 21, 2013, from a new launchpad on Virginia’s eastern shore. Later that year, the second Antares lifted off with Orbital’s cargo capsule, (Fourth photo) the , that berthed with the ISS on September 29, 2013. Both companies successfully proved the capability to deliver cargo to the International by U.S. commercial companies and began a new era of spaceflight.

ISS photo, center left: Benefiting from the success of the partnerships is the International Space Station, pictured as seen by the last crew that visited the orbiting laboratory (July 19, 2011). More photos of the ISS are featured on the first pages of each chapter.

ii Preface

This document provides a history of the NASA Commercial Orbital Transportation Services (COTS) program executed by the Commercial Crew & Cargo Program Office from 2006 to 2013 at the , , Texas. The story was superbly written by Rebecca Hackler in coordination with Rebecca Wright of the JSC History Office. They spent countless hours interviewing dozens of key leaders and participants who shaped the direction and outcome of the program. Their work is greatly appreciated as well as all those who dedicated many years of service to the success of COTS. It was certainly an honor and privilege for me to have the to lead this effort and work with such extraordinary and inspirational people. I am hopeful history will show our work over these few short years had long-lasting, transformational effects on the future of commercial spaceflight in America.

Alan Lindenmoyer, Program Manager

February 2014

For more information on NASA Commercial Crew & Cargo Program, visit www..gov/cots

iii Contents

Preface ...... iii Chapter 5: Commercial Partners . . .49 Technologies Corp...... 50 Introduction ...... v ...... 59 Chapter 1: Laying the Foundation . . . 1 Orbital Sciences Corp...... 64 NASA and Industry ...... 2 Chapter 6: Collaboration ...... 77 Key Concepts ...... 11 International Space Station ...... 78 Chapter 2: Concept to Reality . . . . .15 Federal Aviation Administration ...... 85 Leadership and Coalescence ...... 16 Chapter 7: First Steps Toward Legal Team and Space Act Agreements ...... 19 Commercial Crew ...... 87 Thinking Like an Investor ...... 20 Commercial Crew Development ...... 88 International Space Station ...... 23 ...... 90 Foundation Ready ...... 24 Chapter 8: Legacy ...... 91 Chapter 3: ...... 25 From Contingency to Dependency ...... 92 Round 1 ...... 26 The COTS Model: A New Way ...... 95 Round 2 ...... 31 Conclusion ...... 99 Unfunded Space Act Agreements ...... 33 Appendix ...... 101 Chapter 4: Program ...... 35 Acknowledgments ...... 102 Funding ...... 36 COTS Model for NASA Public-Private Partnerships . . . .103 Organization ...... 39 Chronology ...... 110 Operations ...... 45 COTS Oral History Interviews ...... 114 Bibliography ...... 115 Endnotes ...... 118

iv Introduction

In May 2012, the SpaceX Dragon made headlines as it If successful, this program promised to support President became the first commercial spacecraft to deliver cargo to George W. Bush’s 2004 Vision for Space Exploration by the International Space Station (ISS). In September 2013, filling a gap in resupply services to ISS. New commercial NASA saw a second commercial partner, Orbital Sciences vehicles could take over the task of ferrying cargo to and Corp., follow with its own resupply mission to the ISS. from low-Earth orbit after the planned 2010 retirement of These successful missions represented the fruition of the Space Shuttle, allowing NASA’s new spacecraft, the six years of intensive work executed under partnership capsule and Ares rocket, to explore space beyond agreements between NASA and the commercial space the and eventually on to . community—partnerships that both resulted in the In addition to allowing NASA to focus on extending availability of cost-effective cargo transportation services humanity’s presence in space, COTS would stimulate for the Agency, and the advancement of the U.S. efforts within the private sector to develop and operate safe, commercial . reliable, and cost-effective commercial space transportation NASA’s support was critical to the companies’ success. systems. Besides supporting ISS, these commercial Said Gwynne E. Shotwell, President of the Space capabilities could ultimately benefit the U.S. economy Exploration Technologies Corp. (SpaceX), “We would not by making domestic launch vehicles more competitive in be the company that we are today without the support global markets. In turn, lower launch costs could bolster of NASA,” continuing, “We’d probably be limping along, opportunities for other space markets to grow. trying to change the world, but limping instead of running.”1 One of the first of NASA’s commercial partners selected Orbital President and CEO David W. Thompson echoed in August 2006, SpaceX, represented the unequivocal the sentiment as he described how NASA was “very helpful success of the COTS model. Shortly after its successful in helping us work through various kinds of problems that ISS demonstration mission in May 2012, the company came up,” concluding that “it’s been a great relationship.”2 quickly provided two critical resupply service missions to These partnerships had their origin in 2005, when NASA the orbiting laboratory under NASA’s follow-on Commercial Administrator Michael D. Griffin was appointed and, with Resupply Services (CRS) contract. the support of the presidential administration and Congress, The other partner chosen in the initial selection was allocated a fixed $500 million contribution from NASA’s less fortunate. NASA terminated its relationship with budget for the instigation of commercial transportation Rocketplane Kistler (RpK) in October 2007 after the capabilities to low-Earth orbit. The new Commercial Crew company failed to raise sufficient private funding to & Cargo Program Office (C3PO) at the Johnson Space continue vehicle development. Orbital Sciences Corp., Center (JSC) in Houston, Texas was charged with the task selected as a COTS partner to replace RpK in February of “stimulating commercial enterprise in space by asking 2008, completed its ISS demonstration mission in the American entrepreneurs to provide innovative, cost-effective fall of 2013, and joined SpaceX as the second company commercial cargo and crew transportation services to the NASA would rely on for cargo delivery services to ISS. 3 [international] space station.” This report charts the origins and execution of the NASA From 2006 to 2013, under the Commercial Orbital COTS program, including the elements and people that Transportation Services (COTS) program managed by ultimately made the COTS model a success. C3PO, NASA acted as an investor and advisor with three different and distinct companies in the space transportation industry to promote the development of U.S. space transportation capabilities on the frontier of human exploration.

v vi Laying the Foundation

NASA and Industry Key Concepts

CHAPTER 1 – LAYING THE FOUNDATION 1 chapter 1 The NASA Commercial Crew & Cargo Program Office (C3PO), formally established in November 2005, represented the culmination of years, even decades, of initiatives to encourage the growth of the sector in the U.S. Although the Commercial Orbital Transportation Services (COTS) government-private sector partnerships established by C3PO represented a new way of doing business in the realm of , such symbiotic relationships have occurred throughout U.S. history. The year 1869 saw the completion of the first transcontinental railroad that allowed for continuous travel between America’s east and west coasts—a project that would not have been possible without the support of government bonds and land grants. In the first half of the 20th century, the 1925 Contract Air Mail Act (more commonly referred to as the Kelly Act) incentivized commercial aviation by allowing the U.S. Post Office to contract with private companies for mail delivery. This eventually led to the use of commercial aircraft for affordable passenger travel, as air travel transitioned from a dangerous, daredevil pastime to a routine operation. These examples demonstrated the positive benefits of public-private partnerships for advancing U.S. goals and strengthening the American economy through investment in innovative technologies. More than 50 years after Alan B. Shepard’s historic spaceflight, visionaries in the community endeavored to extend the same type of symbiosis to the realm of commercial space transportation. Commercial companies have been involved in NASA programs as contractors since the Agency’s founding in 1958, but it was not until the 1980s that commercial advocates began to more actively seek turnover of routine space operations to the private sector. Multiple NASA programs laid the foundation for the Commercial Orbital Transportation Services (COTS) program, beginning with early efforts to privatize Space Shuttle and Space Station operations. Although not all these programs reached completion, the principles established for successful relationships with the private sector would become pillars of the Agency’s mission to develop commercially-available ISS transportation services.

NASA and Industry

Since its founding in 1958, NASA has These early relationships set the focused on government-owned and pattern for NASA-industry relations for -operated space missions. Throughout decades to come. the Mercury, Gemini, , and Space Shuttle programs, the space Commercialization in agency hired contractors to develop the Space Shuttle Era launch vehicles and spacecraft. Contractor operations were subject When NASA began development of to government , defined as the Space Shuttle, the new vehicle “NASA’s ability to penetrate” into was envisioned as a reliable, low-cost these companies’ “vehicle design, method of launching government development, test and operations,” and commercial into orbit. as well as strict oversight, or “the The first Shuttle mission, STS-1, watchful and responsible care and occurred on April 12, 1981, shortly 4 management” of contractor activity. after President began

2 CHAPTER 1 – LAYING THE FOUNDATION President Ronald Reagan visited the at the Johnson Space Center and spoke with the crew on board during the STS-2 mission. During his administration, Reagan supported plans for commercialization of the Space Shuttle, encouraging the private sector to create a viable space transportation industry. his administration. Hopes for the new David Hannah and Gary C. Hudson industry. The Office of Commercial system were high with “a sense that with the expertise of former NASA Space Transportation (AST) was a new era was dawning in space, one personnel such as Mercury established in the Department of in which commercialization would play Donald K. “Deke” Slayton.7 In the first Transportation to provide the dual role an important part.”5 few years of Shuttle operations, two of regulating commercial launches companies also proposed to build a and encouraging the growth of the This optimism was encouraged by the fifth, privately-owned Shuttle orbiter to commercial spaceflight industry.10 pro-commercialization complement the fleet of NASA’s four Reagan endorsed. During the signing existing vehicles.8 For many observers in the 1980s, ceremony of the 1984 Commercial commercial space transportation Act the president In September 1984, NASA seemed to be off to a promising stated, “One of the important Administrator James M. “Jim” Beggs start. However in January 1986, a objectives of my administration has established an Office of Commercial devastating accident resulted in the been, and will continue to be, the Programs that “encouraged loss of the , encouragement of the private sector the private sector to become its crew, and payloads during launch. in commercial space endeavors.”6 more involved in using space for As a result, many questioned the commercial purposes and increased role of NASA as the primary Several startup companies emerged NASA’s efforts to find private- delivery route to space. Despite in the 1980s to take advantage of sector uses for NASA-developed the Agency’s attempts to keep the opportunities they foresaw in this technology.”9 The same year, its customers, President Reagan new era of commercial spaceflight, Congress passed the Commercial issued a statement on August 15, including Orbital Sciences Corp., Space Launch Act that aimed to 1986, banning commercial payloads cofounded by David W. Thompson, encourage the growth of the private on Shuttle. Aerospace companies and Space Services, Inc., founded by expendable (ELV) resumed production of expendable

CHAPTER 1 – LAYING THE FOUNDATION 3 launch vehicles for private for the orbiting habitat included orbit and be serviced by visiting customers, aiming to provide privately-owned modules attached to Shuttle as needed. cheap and reliable means of getting the core station structure. However, the ISF was defeated commercial to orbit.11 after a series of controversial A number of proposals from Congressional hearings in 1988, commercial companies offered to as NASA saw the private platform Early Space Station house experiments on independent Commercialization as a direct threat to its own space platforms. These included Space station program.12 Efforts Industries, Inc., headed by Maxime A. Faget, former JSC Director of Of the multiple commercial space The Space Station Program, formally Engineering and lead designer for initiatives of the 1980s, only the announced by President Reagan Space Shuttle and the Mercury SPACEHAB pressurized module, on January 25, 1984, offered other capsule. Space Industries proposed in which astronauts could conduct potential options for the commercial to build an Industrial Space Facility experiments in the Shuttle’s use of space. Some early concepts (ISF) that would remain in low-Earth bay, would fly in space.13

SPACEHAB’s first module in space provided a laboratory that more than doubled the pressurized workspace for crew experiments. The inaugural flight of this commercially-developed unit was in June 1993 on the as part of the STS-57 mission.

4 CHAPTER 1 – LAYING THE FOUNDATION “Faster, Better, Cheaper”

Under Administrator Daniel S. Goldin, who held the position from 1992 to 2001, NASA embarked on a mission to build “faster, better, cheaper” spacecraft. Managers recognized that in order to accomplish this feat they would need to alter customary practices. They based projects such as the Mars Pathfinder on the Lockheed “skunk works” unit that discovered a successful formula for quicker and more efficient aircraft development. Designers reduced the number of people involved and simplified elaborate management oversight structures. Limiting the organization’s size helped promote “group cohesion,” and team members were given more independent decision-making authority without the burden of outside interference.14

Reusable Launch Vehicles In 1996, began work on the X-33, a government-industry partnership After the breakup of the to lower the costs of sending payloads to space. The rocket plane (illustrated in this in 1991, several space transportation artist concept) was to demonstrate the capability of private industry to build and operate companies emerged in response to reusable launch vehicles for space transportation. The program was cancelled in 2001. the new economy created by the end of the Cold War. Names in the routine transportation into space COTS message of limited oversight, U.S. included Pioneer Rocketplane, was judged on all sides to be of John E. Mansfield, NASA Associate Kistler Aerospace, and , overriding importance.”16 Administrator for Space Access Inc.15 These companies and their and Technology, claimed, “We are founders would play a significant The NASA program to develop partners with industry and not their role in future NASA programs that second-generation reusable launch managers.”18 Although these vehicles aimed to increase cooperation with vehicles (RLVs, the first-generation were cancelled mid-development, the commercial sector. RLV being the Space Shuttle) the X-33 and X-34 projects showed in cooperation with commercial an increasing willingness by NASA to Although these new companies companies in the 1990s included institute a new form of collaboration aimed to break into the impending the X-33 and X-34 . with industry, especially as budgets satellite communications industry, For the X-33 project, NASA allowed grew tighter. their projects for low-cost launch companies to develop their own systems also had relevant NASA concepts, without the government Around the same time NASA also applications. After a decade of “dictating the design.”17 worked to transfer Shuttle operations Shuttle operations, which turned to the private sector. An independent out to be more expensive and Orbital Sciences Corp., a future COTS Space Shuttle management review less reliable than originally partner, was an active participant in in February 1995, headed by former projected, “the problem of low-cost, the X-34 project. Foreshadowing the Flight Director and JSC Director

CHAPTER 1 – LAYING THE FOUNDATION 5 Christopher C. Kraft, recommended that responsibility for Shuttle operations be delegated to a consolidated prime contractor. In addition to recommending that NASA remove the restriction on commercial payloads, the report also stated, “Increasing industry involvement in the operation of the space shuttle can be viewed as one of the first steps toward the commercialization of spaceflight.”19

By the late 1990s, NASA began a more concerted effort to consider options for future space transportation architectures that would allow “assured access to space”—a matter of growing concern for the space agency—including combinations of Shuttle, ELVs, and privately-owned RLVs.20 In February 1998, NASA Chief Engineer Daniel R. Mulville spoke about engaging with industry to develop commercially viable RLVs. At the time, RLVs in development included, for example, the fully- reusable Roton envisioned by Gary C. Hudson’s Rotary Rocket Company, Inc.21 Mulville believed Gary C. Hudson Credit: In the late 1990s, reusable launch vehicles were being commercially developed, including these next generation systems would the Roton by the Rotary Rocket Company, Inc. The cone-shaped single-stage-to-orbit develop cargo capability first, before manned spacecraft featured rotor blades and an internal cargo bay. moving to human-rated systems for astronaut transportation. space agency to focus on research companies, including and However, Mulville stressed that and development for exploration Orbital Sciences Corp., suggested companies would determine the best farther into space. Another theme concepts such as launch vehicles, route for their particular business that would continue to emerge in in-space transfer vehicles, the needs: “This is not something we do discussions of the commercialization type of infrastructure necessary by ourselves. This is a partnership of low-Earth orbit was the “significant to support these systems, and opportunity. It’s a way for us to work hurdle” for companies to be priorities for investment. The next with industry.” Many of the themes to profitably market their services in month, Congress passed the Mulville explored in his remarks the private sector.22 Commercial Space Act of 1998. would become hallmarks of The Act encouraged the development NASA’s cooperation with industry In September 1998, NASA awarded of commercial services by requiring in future years. These included five one-year contracts for the study the government to “acquire space NASA becoming a customer of of a more cost-effective space transportation services from United low-Earth orbit transportation architecture in order to provide insight States commercial providers services (as opposed to owner into how the Space Shuttle would whenever such services are required of the vehicle), thereby allowing the be utilized in the future. The five in the course of its activities.”23

6 CHAPTER 1 – LAYING THE FOUNDATION Space Flight Center in Huntsville, distributed a total of $902,000 to Alabama. The goal of SLI was to four small businesses—Andrews In June 1999, Administrator Goldin reduce the cost of access to space Space, Microcosm Inc., HMX, Inc., formed the Decadal Planning Team by encouraging the development of and Kistler Aerospace Corp.—to (DPT), utilizing a core group of experts second-generation RLVs owned conduct a 90-day study on the from across the Agency to undertake and operated by the private feasibility of developing commercial long-term strategic planning for sector. The plan allowed for the vehicles for contingency resupply NASA’s future direction. In the course advancement of multiple, competing to the International Space Station, of the next year, DPT evolved into the vehicle concepts that would then be capable of launching within one NASA Exploration Team (NExT). methodically narrowed down through week’s notice.29 Kistler, which For space exploration, DPT/NExT a series of milestone reviews. In in February 2006 would merge envisioned a “stepping stone” rather 2006, the winning concept would with Rocketplane Global to form than destination-driven approach. This proceed to development.25 Rocketplane Kistler, later would meant that rather than NASA focusing be awarded COTS money for the Goldin explained that the “focus on reaching a single goal, such as development of its K-1 launch system. [is] on developing an integrated Mars, technologies (including power space transportation plan to meet Building on that foundation, additional systems and radiation protection) NASA’s needs for human and cargo AAS studies in the following months should be developed that allowed for delivery, while seeking synergy with examined aspects such as what space exploration in general, allowing the commercial space sector.”26 sort of would be explorers to methodically venture It is important to note that unlike needed for commercial launches, risk farther into space. later commercial programs, SLI reduction activities, and how flight The NExT annual report for the 2002 placed a heavy emphasis on NASA- demonstrations would be conducted. fiscal year listed “full commercial driven and -enforced requirements. In addition to those listed above, use” as one of its main goals. A In 2002, the Government some of the 20-plus companies NExT presentation cited both the Accountability Office reported that that eventually participated in AAS 1958 Space Act and the 2000–2003 “NASA believes that much of the included Boeing, Lockheed Martin, NASA Strategic Plan in listing the SLI program’s success is directly and Orbital Sciences Corp. Orbital aims to “develop pre-competitive related to the implementation of was selected as a COTS partner technologies with significant project management controls and in February 2008, and it too had commercial application” and appropriate levels of insight,” and formulated early plans for emergency “open the way for U.S. citizens by that the program could not continue cargo delivery to ISS even before privatization and commercialization of until NASA was able to define its AAS. According to Robert T. “Bob” the space environment.”24 Although requirements for the vehicle systems 27 Richards, Vice President of Human Goldin’s term ended in November to be developed. Spaceflight Systems, Orbital had 2001 after nearly 10 years as NASA At this time, resupply to the proposed an unsolicited concept Administrator, several of the ideas International Space Station (ISS) called Orb Express that would be able developed under DPT/NExT would continued as a growing concern for to deliver a few hundred kilograms of form key components of future NASA NASA. As Program Manager Tommy cargo, for example a “critical spare,” policy, particularly the 2004 Vision for W. Holloway described: “[ISS] has on a few days’ notice.30 Space Exploration. holes in it that you can drive a truck through, and getting critical spares up Over the course of the next two to it on time is one of those holes.”28 years, before the cancellation of SLI in 2002, AAS participants helped While DPT undertook its planning Alternate Access to Station develop several of the concepts and studies, in 2000 NASA embarked The Alternate Access to Station vehicles that would be seen in COTS on the Space Launch Initiative 31 (AAS) program formed an important and follow-on commercial initiatives. (SLI), administered by the Marshall part of SLI. In August 2000, AAS

CHAPTER 1 – LAYING THE FOUNDATION 7 Commercialization NASA to “acquire cargo transportation would require regular resupply and the Vision for as soon as practical and affordable of essentials such as water, Space Exploration to support missions to and from food, and clothing, not to mention the International Space Station.” critical hardware and experiments The year following the loss of Space Congress showed its support in the for scientific research. Commercial Shuttle Columbia in February 2003 NASA Authorization Act of 2005 companies could help provide would prove decisive for the nation’s by directing the Administrator to these crucial resupply services, space policy. While Administrator Sean “develop a commercialization plan to freeing NASA to pursue the goal of C. O’Keefe led the Agency’s efforts to support the human missions to the exploration farther into space. recover from the tragedy of a second Moon and Mars, to support low-Earth Shuttle accident, President George W. orbit activities.”32 Bush announced his Vision for Space Exploration at NASA Headquarters in When he entered as the newly- Further encouraging enthusiasm Washington, DC, on January 14, 2004. appointed NASA Administrator in for the commercial space sector, This bold vision planned to return April 2005, Michael D. Griffin saw a , the enterprise humans to the Moon and continue commercial transportation services of and Microsoft onward to Mars with the development program as a broader piece of cofounder , won the of the Orion crew capsule and Ares Constellation: “The commitment $10 million Ansari X Prize on launch vehicles, under a new program was that in the long run, when these October 4, 2004. The company’s named Constellation. companies had learned how to SpaceShipOne was the first vehicle build their and spacecraft, to fly a human 100 kilometers into And, this new U.S. Exploration Policy they could have the Space Station suborbital space, return, and repeat included a key place for private cargo market.”33 Once completed, the same feat within two weeks. spaceflight companies, by directing the International Space Station For years, commercial space advocates such as James A.M. Muncy had implored Congress to support commercial space initiatives, especially privately-developed transportation to and from ISS. The flight of SpaceShipOne proved that the industry activists who had been clamoring for a chance to develop private space transportation capabilities could in reality develop a reusable manned spacecraft and achieve human spaceflight, independently of NASA.34

Multiple commercial space advocates have cited the award of the Ansari X Prize as the catalyst for increasing government support of private space transportation. For these industry supporters, SpaceShipOne seemed Credit: NASA/Bill Ingalls Credit: President George W. Bush announced the Vision for Space Exploration at NASA to prove the observation that “the Headquarters on January 14, 2004. He directed NASA Administrator Sean O’Keefe high costs of NASA programs are… (right) and the space agency to develop the plans and the spacecraft to return humans dictated by the laws of government: to the Moon and continue onward to Mars. Also included in the new policy was a Agencies with monopolies are likely provision to pursue commercial opportunities for providing transportation and other services supporting the ISS and exploration missions beyond low-Earth orbit. to do things the safe, expensive

8 CHAPTER 1 – LAYING THE FOUNDATION way,” and that more efficient methods of space development were indeed possible.35

Concept Exploration and Refinement Study

In September 2004, the Concept Exploration and Refinement (CE&R) study contracts were instituted by Rear Admiral Craig E. Steidle, NASA Associate Administrator for the Exploration Systems Mission Directorate (ESMD). The CE&R funds were awarded to 11 companies “to conduct preliminary concept studies for human lunar exploration and the development of the Orion .”36

Steidle used his experience developing the Navy Joint Strike Gary C. Hudson Credit: Fighter, in which two competitors Gary Hudson and David Gump co-founded the Transformational Space Corp. (t/Space), specifically to bid for the NASA Concept Exploration and Refinement Study contract. developed their aircraft independently (Left to right) Gump, as t/Space president and Hudson serving as Chief Designer worked before having a “fly off” to determine with Charles Duelfer and Brett to position the company for commercial the winner, to apply competition to spaceflight business. development, aiming for a contest by 2008.37 President for Government Relations ISS Commercial Cargo at t/Space, the company’s work Services CE&R companies included by-now under the CE&R contracts provided familiar names such as Boeing, the direct template for what later Less than one year before C3PO Lockheed Martin, Orbital Sciences became the COTS program.38 was established, in the first half of Corp., and SpaceHab, Inc. 2005, the ISS Commercial Cargo Around the same time, ESMD Services (ICCS) Program administered Gary Hudson, CEO of HMX, Inc., conducted a parallel market research by the International Space Station and David Gump established a spinoff survey with 16 companies—including Program Office at the Kennedy Space organization, the Transformational Boeing, Kistler Aerospace, the Center in Florida picked up in many Space Corp. (t/Space), specifically recently formed Space Exploration ways where AAS had left off. The to bid for the CE&R contracts. Technologies Corp. (SpaceX), and t/ NASA budget for fiscal year 2005 t/Space won one of the awards Space—regarding the companies’ allocated $140 million toward the based on its proposal that outlined potential to develop low-Earth orbit effort to achieve the new program’s a space architecture comprised of capabilities and how NASA could objectives, described as “the purchase two spirals of development. First, a favorably engage with them. The of launch, delivery, and earth return commercial taxi would fly astronauts responses returned in December services for ISS cargo” in light of from Earth to orbit (Spiral 1), then 2004 provided guidance on some of eventual .40 astronauts would use in-space the key principles for working with transfer vehicles for transportation industry that would ultimately manifest As part of ICCS, an industry day to and from the Moon (Spiral 2). themselves in the workings of the was held April 25, 2005, at the According to both Hudson and Commercial Crew & Cargo Program Johnson Space Center to review Bretton Alexander, former Vice Office (C3PO).39 “general technical requirements for

CHAPTER 1 – LAYING THE FOUNDATION 9 Key Concepts

These previous NASA projects and programs showed the evolving nature of NASA’s relationships with industry, as the space agency moved towards more cooperative forms of engagement with the private sector. Several of the key concepts from those initiatives were applied to the COTS program, contributing to the successful development of commercially-owned vehicles for ISS resupply.

Transfer Low-Earth Orbit Operations to the Private Sector

Documents from the Space Launch Initiative had noted in 2002 that “U.S. commercial launch vehicles are based largely on decades-old technology,” allowing “industry partners” to take over more routine During the final Shuttle mission in July 2011, Astronaut Sandy Magnus (above) operations in low-Earth orbit while facilitated the transfer of approximately 2,700 pounds of food plus more than 9,400 pounds of spare parts, equipment and other supplies from the multi-purpose NASA focused “more on science logistics module to the International Space Station. For years the Space Shuttle had research, technology development delivered goods to the Expedition crews, the astronauts who resided in space on and exploration.”44 the ISS. However, the Vision for Space Exploration policy included a scheduled end of the Shuttle Program. This announcement opened the opportunity for commercial NASA initiatives such as SLI and companies to transport cargo to the ISS. AAS were already looking to move the government away from day-to- commercial cargo transportation ICCS was the direct antecedent day operations and help industry services in support of the ISS.”41 of the Commercial Crew & Cargo establish more cost-effective space Valin B. Thorn, future C3PO Deputy Program Office established at transportation capabilities. AAS Program Manager, presented the JSC in the fall of that year. By specifically designated its study main goals and requirements, February 2006, when the Agency contracts for small businesses, outlining how NASA would be released its fiscal year 2007 budget aiming to encourage by acquiring a service to ISS, not the request, ICCS had been transferred working with companies in the private spacecraft itself. Thorn’s presentation from the ISS Program Office to sector that did not have decades also reviewed the basic capabilities the Exploration Systems Mission of experience with traditional NASA for such a vehicle, for example Directorate, where it was renamed procurement and operations. the amount of cargo needed for Commercial Orbital Transportation resupply, as well as ISS docking Services, or COTS.43 and berthing requirements.42

10 CHAPTER 1 – LAYING THE FOUNDATION Limited Government subsidized the railroads. We’ve on the Space Shuttle and Russian Investment subsidized the aviation industry. Now, and vehicles for we’ve got to spend some money and access to ISS” with AAS funds.47 For years, advocates of commercial subsidize the space transportation The theme of reducing U.S. spaceflight had observed that business.”46 The parallels of the dependence on the Russian vehicles government investment has been transcontinental railroad and Kelly for ISS transportation would emerge used throughout history to promote Air Act would become mantras of throughout the COTS program and industry and exploration, reaching as commercial space supporters. into later commercial crew efforts.48 far back as 15th-century monarchs funding voyages across the Atlantic Also inherent in this idea was that Prior to taking the position of NASA ocean.45 In a 1999 commercial government would be providing a Administrator, Griffin had seen the spaceflight policy seminar, James financial investment for the express concept of limited government M. “Jim” Beggs, former NASA purpose of advancing the U.S. investment in industry projects work Administrator and General Dynamics industry and economy. The Joint in practice. Griffin formerly served Corp. Executive Vice President Explanatory Statement of the 106th as the president of In-Q-Tel, “which and Director, pointed out that “this Congress on NASA Authorization in short form could be characterized country has subsidized transportation commended NASA “for seeking as the CIA’s [Central Intelligence for everything over its history. We’ve means of reducing our dependence Agency] fund.”49

NASA began looking at options for future resupply services to the International Space Station with the retirement of the Space Shuttle set for 2010. By the end of 2005, NASA identified the core operating principles for an innovative program titled Commercial Orbital Transportation Services (COTS). A few months later the initiative was launched with an announcement seeking partners from the U.S. private sector. Pictured above is the ISS in July 2006 as seen by the crew of STS-121.

CHAPTER 1 – LAYING THE FOUNDATION 11 In-Q-Tel helped Keyhole, Inc. “Buy a Ticket, passage of the Launch Services to develop the company’s geospatial Not a Vehicle” Purchase Act. The Act required data visualization software—an NASA to “purchase launch services application that became known as Hand-in-hand with the idea of limited for its primary payloads from Google Earth after Keyhole was government investment came the commercial providers whenever such acquired by the internet company important distinction that NASA services are required in the course in 2004.50 Griffin’s experience would not be purchasing the vehicles. of its activities.”58 using government funds to spur Rather, NASA would help selected development of technologies which commercial companies to develop Now, the same principle would be would benefit the intelligence cargo transportation services to applied to cargo transportation flights community, and later have low-Earth orbit, which NASA would to low-Earth orbit under COTS. widespread commercial application, then be able to buy in the same allowed him to transfer the same manner as one would buy a ticket on Performance-Based, 53 principles to the realm of the private a commercial airliner. Fixed-Price Milestones spaceflight industry. The Commercial Space Act of In NASA’s traditional relationships 1998 specified that commercial Crucially, for this government with industry, the government is space transportation services be investment to work, supporters obligated to pay the additional cost acquired as a commercial item,54 believed that the NASA contribution of unforeseen slips in scheduled and the NASA officials who executed must constitute only a limited development. Therefore, in the view the program often compared this proportion of the total investment; of commercial advocates, contractors concept to handing a package to a the rest would come from private often have the incentive to do more, courier delivery service. This analogy, sources. In fact this was not a new less-efficient work, as they know they previously made during Alternate concept. NASA’s first Administrator, will not be financially responsible for Access to Station, indicated T. Keith Glennan, envisioned that delays and cost overruns.59 private industry would provide missions would “demonstrate an of the financing for the research and alternative access capability for the The 2004 ESMD market research development of communications ISS,” after which “funds will be used study proposed the idea of satellites in the 1960s, although in to purchase services when they “milestones with actual performance practicality the majority of funding was become available.”55 establishing credibility for future provided by NASA.51 funding.”60 In other words, payment NASA had first been introduced would only be guaranteed after to this “radical” concept in the late According to this model, government the completion of predefined 1980s, when pro-commercial forces involvement would help impart a objectives—not on a continual advocated that NASA buy ELV certain “cachet” that would attract basis as is customary under the services, rather than the vehicles additional outside investors, but system of a cost-plus contract in themselves.56 They claimed the the company itself was expected which companies are awarded a government would save 25 percent, to contribute a significant amount contract for the total cost of the work 52 owing to reduced costs for vehicle of money to the project. In other performed, plus an additional amount oversight, privileges NASA was words, companies needed to put for profit. Under this alternative reluctant to relinquish. After fierce “skin in the game,” a phrase used in concept, any additional work required resistance and battles with the the investment community to describe to complete the milestones would Department of Commerce, NASA a company’s own commitment to its be the financial responsibility of began acquiring ELV services in product. This concept described the the company, not the government. 1988.57 In 1990, the purchase of COTS program philosophy that NASA Furthermore, these milestones did not commercial launch services was and the company were partners, each necessarily need to be the same for implemented into law with the with a stake in the venture. each contractor.

12 CHAPTER 1 – LAYING THE FOUNDATION NASA implemented the use of performance-based, fixed-price milestones to invest in its COTS business partners. Funding was issued only after the completion of predefined objectives, and any cost overruns would be the financial responsibility of the company, not the government. This illustration shows actual completion dates. Milestone Schedule charts are included in the Appendix.

Administrator Griffin used the Non-Contract Alternate Access to Station also metaphor of a home builder to Approach recommended new business describe the approach: “I envisioned approaches, reporting to the 53rd it as being somewhat like the Even before the first Space Shuttle International Astronautical Congress arrangement when you build an flight in 1981, NASA had begun that “NASA commercial contracting expensive custom home. … [The to examine alternative options to policies present a perceived contractor] gets a small upfront traditional procurement contracts. barrier” to commercial companies payment to get started, earnest In 1979, NASA signed the first interested in entering the space money it might be called, and he Joint Endeavor Agreement with the transportation market.63 These gets milestone payments when he McDonnell Douglas standard commercial contracting completes the foundation and gets Company to examine the production policies—what one commercial the framework up, when he gets of pharmaceuticals in space. advocate called the “suffocating effect the roof on, when he gets the The space agency did not provide of NASA’s dominance”—involved walls in.” Griffin added, “But, he any funds to McDonnell Douglas, cost-plus contract awards governed doesn’t get all the money until he but allowed cost-free use of the by the stringent Federal Acquisition has furnished all the product.”61 Space Shuttle for microgravity Regulation (FAR).64 research experiments.62

CHAPTER 1 – LAYING THE FOUNDATION 13 catalyst for change in the industry,” adding that “AAS could serve as a change agent for the government- industry relationship.”67

AAS was cancelled before the program could determine an alternative legal instrument to develop a demonstration or “pathfinder” vehicle with industry, but options under consideration included cooperative agreements and prizes.68 To address this concern, the 2004 ESMD market research indicated companies preferred the use of NASA’s Other Transaction Authority (OTA), granted in the 1958 National Aeronautics and Space Act that founded the Agency, for a more flexible relationship with NASA.69

Through a series of promising but incomplete initiatives, NASA adopted several core principles of a new way of doing business with commercial industry. In the fall of 2005, with most of the key concepts in place and a new Administrator, the Agency applied some of these principles to a new venture, the Commercial Orbital McDonnell Douglas Astronautics Company provided the first commercial experiment Transportation Services initiative. for the Shuttle Program – a space continuous flow electrophoresis system (CFES). The company modified laboratory instruments to take advantage of microgravity, and its Having developed the precepts engineer, Charlie Walker, operated the CFES during spaceflight. Walker (above, STS-41D) for transferring operations to the served as a payload specialist on three missions before the Space Shuttle Challenger private sector—limited government accident that ended commercial Shuttle payloads. investment, purchasing low-Earth orbit services (not vehicles), and The FAR dictates an intense process Under cost-plus contracts, performance based, fixed-price to ensure fairness in government companies must rigorously follow milestones—one major area that acquisitions of goods or services, but NASA-imposed requirements remained to be defined was exactly “is not known for its efficiency and can and are subject to strict supervision how NASA could use its special Other be quite cumbersome.”65 Furthermore, by civil servants, potentially Transaction Authority. How NASA smaller startup companies felt hindering innovation. Designing would apply this OTA would form the some FAR measures left them at a to specific NASA orders also cornerstone of the eventual execution disadvantage. For example, proposers reduced the possibilities for sales to of the COTS program. were rated on their past performance, customers outside the government. and companies with no history of To alleviate these constrictions, government contracts could receive a the 2002 AAS report noted that maximum rating of neutral.66 “disruptive can be a

14 CHAPTER 1 – LAYING THE FOUNDATION Concept to Reality

Leadership and Coalescence Legal Team and Space Act Agreements Thinking Like an Investor International Space Station Foundation Ready

CHAPTER 2 – CONCEPT TO REALITY 15 chapter 2 With the key concepts and authorizing policy in place, efforts to promote the development of U.S. commercial space transportation capabilities began to coalesce into an executable program. The new Commercial Orbital Transportation Services (COTS) initiative would not be “business as usual” for the space agency. The acronym itself provided an indication of the mission; “COTS” typically refers to existing “commercial off-the-shelf” items purchased for government use.70 NASA planned for its new initiative to be executed in two phases. First, in Phase 1 (what became the COTS program), NASA would help commercial companies develop the capability to transport cargo and crew to low-Earth orbit. Then, in Phase 2 (the future Commercial Resupply Services contracts), NASA would award standard procurement contracts to buy these proven “off-the-shelf” services for delivery of supplies and scientific research experiments to the International Space Station (ISS). The Agency was looking to future commercial providers to fill the gap in ISS resupply services after the scheduled retirement of the Space Shuttle in 2010. NASA Administrator Michael D. Griffin and several of his top officials at NASA Headquarters in Washington, DC envisioned commercial capabilities as “the primary planned means of supporting ISS transport in the next decade.”71 If the COTS program proved successful, NASA would have available an alternative method of reaching low-Earth orbit, so the Ares rocket and Orion capsule being developed under the could focus on the goals of returning to the Moon and journeying onward to Mars. William H. “Bill” Gerstenmaier, Associate Administrator for the NASA Space Operations Mission Directorate, described COTS as a “high-risk” contingency to see what industry was capable of developing.72 Many of the engineers at JSC saw the new commercial initiative as a “side bet” or “back ” option, especially because it received a relatively limited share of NASA’s funding.73

Leadership and Coalescence After taking the role of NASA specified that cargo capabilities Administrator in April 2005, Griffin should be well established before assigned a fixed $500 million companies progressed to the next contribution to be allocated over step of crew transportation.74 a five-year period, focused on the development of cargo capabilities NASA Headquarters assigned a only. Griffin provided the initial team at the Johnson Space Center direction for the program, including (JSC) to manage COTS. As Scott the guidance to use fixed-price J. “Doc” Horowitz, Associate milestone payments, apply limited Administrator for the Exploration government investment, preserve Systems Mission Directorate company intellectual property, (ESMD), said, “If you’re going to and minimize requirements in look at supporting the International order to allow for innovation. The Space Station, where do you want Administrator’s guidance also to put that work? The International

16 CHAPTER 2 – CONCEPT TO REALITY Space Station is a customer. The people who have experience with supplying things to the International Space Station were at the Johnson Space Center.”75 The new organization at JSC was named the Commercial Crew & Cargo Program Office (C3PO).

Alan J. Lindenmoyer

NASA needed a leader who could manage such an innovative program within the JSC environment of traditional human spaceflight operations. In the fall of 2005, Gerstenmaier, former ISS Program Manager, handpicked Alan J. Lindenmoyer to lead the new Don Cohen, NASA APPEL Credit: NASA asked Alan Lindenmoyer to develop and initiate a new era in spaceflight that endeavor. Gerstenmaier recalled focused on private industry providing cargo and crew space transportation for the space that he looked for a manager with agency. As Program Manager, Lindenmoyer led a small Commercial Crew & Cargo procurement and Space Station Program Office (C3PO) team and directed the operations of the Commercial Orbital experience, who was also capable Transportation Services program from the Johnson Space Center in Houston, Texas. of pursuing “creative solutions.” That is, he sought a leader that nearly 20 years of experience 2) To facilitate U.S. private industry was “pretty open, pretty innovative, working on the Space Station. demonstration of cargo and yet had enough business sense After joining JSC in 1990, crew space transportation that they could actually pull together Lindenmoyer also became known capabilities with the goal of an organization and pull that off. as a contract and configuration achieving reliable, cost-effective That was Alan.”76 management expert, stemming access to low-Earth orbit from his experiences in the ISS 3) To create a market environment While an undergraduate at Embry- Program Office as the Assistant in which commercial space Riddle Aeronautical University, Manager for the Vehicle Office, transportation services are Lindenmoyer had first joined NASA Assistant to the Deputy Program available to government and private in 1982 as a cooperative education Manager for Technical Development, sector customers79 student at the Goddard Space Flight Manager of the Configuration Center in Greenbelt, Maryland. After Management Office, and Technical receiving his Bachelor of Science Integration Manager.77 Draft COTS degree in Aeronautical Studies with Announcement Engineering and a commercial/ Lindenmoyer assembled the instrument pilot license in 1983, members of the small C3PO team, Even before the new program Lindenmoyer completed his Master’s who worked diligently to prepare office was officially incorporated, in Aerospace Engineering from the the main elements of the COTS Lindenmoyer and his team began to University of Maryland in 1986. program on a timeline of only a few identify the core operating principles months.78 They defined the three of the COTS program. On October In 1987 Lindenmoyer joined NASA goals of C3PO: 5, 2005, Lindenmoyer convened Headquarters as a structural the first “kickoff” meeting of the 1) To implement U.S. Space COTS Procurement Development dynamics manager for the Space Exploration policy with investments Team at the Johnson Space Center. Station Freedom Program. By the to stimulate the commercial NASA Headquarters official Marc time the COTS program was initiated, space industry Lindenmoyer had accumulated G. Timm recalled that the dozen or

CHAPTER 2 – CONCEPT TO REALITY 17 so participants contributed ideas JSC plans to solicit proposals from over an extended period of time. as Lindenmoyer “started drawing industry for Earth to orbit spaceflight Unpressurized cargo returned from circles” on a whiteboard “about how demonstrations of any combination the test bed is destroyed as it we can do this, how we can do that, of the following mission capabilities.”82 burns in the atmosphere upon a and how we could actually make this These capabilities were: controlled reentry to Earth. successful.”80 Timm helped C3PO A) External unpressurized cargo B) Internal pressurized cargo incorporate ISS research and resupply delivery and disposal delivery and disposal needs into the program. Many of Capability A “delivers cargo Capability B “delivers cargo these were based on the Exploration (payloads) that operate directly in (payloads) that operates within Systems Architecture Study conducted the space environment to a LEO a volume maintained at normal in 2005 to, among other things, [low-Earth orbit] test bed and atmospheric pressure to a LEO “define the top-level requirements and provides for its safe disposal.” test bed and provides for its configurations for crew and cargo This entailed the delivery of safe disposal.” In addition to launch systems to support the lunar equipment to support the test the structure itself, the crew 81 and Mars exploration programs.” bed structure, such as radiators, also required regular supplies of Three weeks later, on October 28, batteries, pumps, and other orbital food, clothing, and equipment, 2005, NASA released a COTS replacement units that allowed pressurized for delivery inside the Spaceflight Demonstrations the test bed to be serviced and habitable modules. used as an orbiting laboratory synopsis outlining how “NASA/ C) Internal pressurized cargo delivery, return and recovery Capability C “delivers cargo (payloads) that operate within a volume maintained at normal atmospheric pressure to a LEO test bed and provides for its safe return to Earth.” This involved the challenging task of returning materials intact through Earth’s atmosphere, especially scientific experiments, and other items such as malfunctioning equipment for researchers and engineers to investigate. D) Crew transportation Capability D “delivers crew to a LEO test bed and provides for safe return to Earth.”83 While priority number one was to prove cargo capability, the program also included a crew option to be exercised if and when cargo capability had successfully been demonstrated. This future option would require additional NASA funding. The Commercial Orbital Transportation Services program focused on involving the private sector with crew and cargo delivery to low-Earth orbit. NASA offered four different options to allow companies the flexibility to optimize their unique services and capabilities.

18 CHAPTER 2 – CONCEPT TO REALITY The inclusion of four different options of the COTS program. Many of allowed NASA to select a portfolio Legal the NASA attorneys who worked of companies to meet ISS resupply on the program would later needs while allowing companies Team and describe their work on COTS as the flexibility to optimize their COTS a career highlight, enjoying the proposal to their unique business Space Act “energy” that came from creatively plans and markets. working to put together a new type Agreements of NASA program.85 Not long after the draft announcement was posted, the The legal process for contract As the program was quickly but Commercial Crew & Cargo Program procurement was well established carefully established in late 2005, Office hosted an industry day in in the 53-part Federal Acquisition the legal team stayed in constant Houston, a preproposal conference Regulation (FAR), but COTS was contact and communication with their where the COTS approach was not to be a traditional procurement— fellow team members, even over the unveiled. Lindenmoyer’s team or indeed a procurement at all. winter holiday break, to prepare the outlined the goals and objectives Instead of acquiring a good programmatic framework necessary of the program, and held one-on-one or service, the nascent COTS to allow NASA to partner with industry meetings with interested companies program would be cooperating and for the development of commercial to get industry feedback. This partnering with industry in order to ISS resupply services.86 unique approach set the tone for help them develop low-Earth orbit how the program would actively transportation services. Together, the group assayed seek to work with industry as current legislation and policy and partners, not overseers. The The COTS team needed more determined how NASA could companies’ input from the meetings than their years of engineering and cooperate with industry in such a was then collectively assessed by technical expertise to make the way as to stimulate the commercial NASA and incorporated into the program a success; they relied on spaceflight industry. NASA’s final Announcement for Proposals expertise in the legal, procurement, attorneys reviewed the Federal released in January 2006. and financial fields. In order to make Grant and Cooperative Agreement this new type of relationship with Act of 1977 (Chiles Act), codified in While this advance notice gave commercial partners possible— the NASA Grant and Cooperative potentially interested companies as true partners, as opposed to Agreements Handbook, to ensure time to prepare their submissions, contractors—a team of specialists the Agency utilized the most Lindenmoyer and the COTS in procurement, intellectual property, appropriate legal instrument to team continued to refine their and commercial law assembled to meet the COTS goal of allowing approach. They examined all design the essential legal framework companies to develop their elements of a traditional procurement for the successful execution of the technology without the customary and retained only those elements COTS program. NASA requirements and oversight which they believed contributed dictated by standard procurement to a fair and equitable competition, The COTS effort brought together contracts. They used “cautious filtering out those that they a formidable contingent of innovation,” staying within the bounds felt encouraged bureaucratic experts from both JSC and NASA of existing policy and legislation, slowdown and waste.84 Headquarters to assemble the particularly the Competition essential legal framework that in Contracting Act of 1984, to allowed for the successful execution accomplish the Agency’s mission.87

CHAPTER 2 – CONCEPT TO REALITY 19 Significantly, NASA was not non-reimbursable agreements acquiring a good or service for the permitted partnerships without Thinking Like Agency’s direct benefit. Therefore, an exchange of funds. However, COTS was not a procurement. funded SAAs in which NASA an Investor Neither was it a grant or a provided payments to a commercial cooperative agreement often used partner constituted a relatively As observed at a 1999 commercial when NASA provides funding to a novel way of doing business for space policy seminar, “One of university for research. the Agency.91 The legal team’s the great challenges is taking an diligent efforts to document the R&D [research and development] In this case NASA would need to justification of funded SAAs for the organization with a lot of history, use a (SAA), COTS program laid a firm foundation culture, and institutional structure based on NASA’s Other Transaction for the program’s successful and trying to make it more 92 Authority (OTA). The OTA was execution, as would be proven in entrepreneurial.” In order to included in the founding charter the next few years when the legal accomplish their goal, the COTS of the space agency, the 1958 team was able to successfully team of NASA engineers also National Aeronautics and Space defend against legal challenges needed to learn the fundamentals Act. It authorized NASA “to enter brought before the Government of business and investment. into and perform such contracts, Accountability Office. leases, cooperative agreements, Dennis A. Stone or other transactions as may be As part of the ongoing effort to necessary in the conduct of its carefully distinguish this activity Dennis Stone, the COTS Program 88 work.” NASA was the first federal from a FAR-based procurement, Integration Manager, had been agency to receive this “catchall” the legal team also advised that following the efforts of commercial authority, originally included to allow several elements in the selection spaceflight for decades. After NASA to undertake any agreements process be renamed. In place receiving dual degrees in physics necessary to fulfill the Agency’s of a Request for Proposal, and electrical engineering from the mission in the Cold War COTS issued an Announcement University of Hawaii at Manoa in 1977, 89 with the Soviet Union. As NASA for Proposals. In place of a Stone joined McDonnell Douglas to attorney Amy Xenofos explained, Source Evaluation Board to select design software for the commercial “Any time we do a Space Act commercial partners, COTS . He then Agreement, it’s because we can’t utilized a Participant Evaluation worked at Ford Aerospace and 90 do it any other way.” Panel (PEP). The PEP would focus Rockwell International supporting JSC not only on submitted proposals’ before joining NASA in 1985. In the Space Act Agreements had technical merits, but also the course of his two decades of work previously been used by companies’ financial credentials on the Space Station, Stone became NASA in their reimbursable that included the question: increasingly interested in the potential and non-reimbursable formats. what was their potential to bring of the private spaceflight sector. Reimbursable agreements a new commercial off-the-shelf permitted NASA to collect payment service to market? In the early 1990s, Stone pursued for services provided, while his interest in commercialization by studying government-wide lessons learned from buying services and data instead of systems. He also served as ISS Commercialization Working Group Chair prior to the formation of the COTS program.

20 CHAPTER 2 – CONCEPT TO REALITY Marty was able to apply both his Through close collaboration with business acumen and familiarity what Marty would come to recall with government processes and fondly as “really good friends,” the programs to provide invaluable COTS team worked to upend the advice to the COTS team. One of traditional NASA contracting culture the tools Marty placed in the hands and encourage the growth of a of the COTS team was the book The commercial space transportation Innovator’s Dilemma by Clayton M. industry by acting as a true investor Christensen.96 Marty emphasized the and partner.101 In addition to learning book’s principle that for innovation to from Marty, some team members be successful, a spinoff organization participated in NASA’s Business

Credit: C3PO team Credit: must be set apart from its parent Education Program training course.102 Dennis Stone advocated partnerships organization and all of its entrenched Reflecting back on his experiences, between NASA and industry to 97 commercialize space. Stone applied processes and values. Marty commended the COTS team for his knowledge of the commercial their openness, as they were willing space industry and potential markets He encouraged the COTS team to to truly listen and alter the traditions while serving as Business Chair during examine business plans from the ingrained as career NASA engineers the COTS competitions and as C3PO companies, especially their proposed in favor of those more conducive to Integration Manager. management teams and financing technology investment.103 plans. Marty impressed upon the Stone encouraged C3PO to solicit team that the ability to secure the assistance of a venture capitalist financing by the selected company to help the team understand how was in fact even more important NASA could fill the role of investor, than its technical ability. This concept providing seed money for companies contradicted all the prior training to spur the development of space NASA engineers had received on 93 cargo transportation systems. selecting contractors.98

Venture Capitalist Marty helped apply Griffin’s requirement that COTS partners On December 21, 2005, JSC issued provide true “skin in the game”; this a Request for Proposal for Venture was vitally important if NASA was to Capitalist Consulting Services to commit to its role as investor of the “support NASA in evaluating the resulting systems. The designated business and management aspects $500 million for COTS was nowhere of COTS participants’ proposals,” near enough to finance an entire space development program, and “assist NASA in assessing Alan Marty Credit: the business and management especially after the sum was divided Venture capitalist Alan Marty (right) performance of selected COTS and distributed to multiple companies. assisted the C3PO team in evaluating business and management proposals partners.”94 Chosen to work with For the COTS model to work, the companies needed to be able to from the potential partners. Marty had NASA was Alan Marty—a former worked previously with the NASA physicist, White House Fellow, and secure 1) private capital and 2) private in venture capitalist—who had worked customers, in order to provide 3) truly to encourage innovation and during 99 with the NASA Ames Research private services. In other words, too the Reagan administration served as a White House Fellow. Center in California in the early much government involvement would to help that center find ways to risk “corrupting the market,” making encourage innovation.95 this less a commercial enterprise than a government one.100

CHAPTER 2 – CONCEPT TO REALITY 21 Commercial Friendly property, property and data rights, Committed Partnership or proprietary information. Tellingly, The National Aeronautics and Space Articles 12 and 13 of the SAA on To further encourage private Act includes the following provision Intellectual Property and Data Rights investment, the Space Act Agreement regarding commercial opportunities, are the longest in the Agreements.105 provided very limited provisions for present since 1985, the era of termination by NASA. Traditional Reagan’s administration: NASA contracts often contain a Creative License termination for convenience clause, “The Congress declares that the which allows the government to Lindenmoyer and his team were general welfare of the end the agreement for any reason conscious of the fact that the volumes requires that the National Aeronautics it chooses. The COTS Space Act of detailed technical requirements and Space Administration … seek Agreements, however, could be normally levied on NASA contractors and encourage, to the maximum terminated under Article 17 only in could be stifling to innovation. In lieu extent possible, the fullest commercial the case of A) Mutual Consent, B) 104 of strict requirements, the COTS use of space.” Failure to Perform [i.e., the company’s Announcement provided a set of failure to meet the agreed-to The COTS program aimed specifically straightforward guidelines to allow milestones], or C) Reasons Beyond to allow small startup ventures companies to provide the needed NASA’s Control that included national the chance to compete in NASA services to ISS in the manner that emergencies, declarations of war, or procurements, in addition to the group worked best for their unique potential. “failure of Congress to appropriate of large, established contractors For example, companies pursuing sufficient funding.”108 that usually dominated major NASA Capabilities B and/or C needed to spaceflight contracts. Many of the demonstrate the ability to deliver In contrast to a traditional cost-plus companies interested in participating 8,400 kilograms (about 18,520 contract, COTS partners would only in NASA’s new program belonged pounds) of cargo to low-Earth orbit receive payment from NASA after to what was dubbed the NewSpace per year. However, the COTS team they had completed established community of space entrepreneurs made a point not to specify other milestones, meaning the company, and supporters who actively worked factors, such as the dimensions of the not NASA, would be responsible to promote the development of vehicle, its cargo capacity, the number for any cost overruns. Financial commercial spaceflight. Several of flights per year, and sites for launch milestones were set early in the 106 provisions of the COTS SAAs and operations. program, so if a company failed to were deliberately crafted to allow meet the required amount of private Under the Space Act Agreement, companies of all sizes to participate. financing, the Agreement could be companies were allowed and even terminated early before NASA had encouraged to develop vehicles invested a more substantial sum of Intellectual Property and capabilities that could be money into the project. This allowed marketed to potential customers With the help of the legal team, the for sharing of financial risk, and gave outside the government, whereas terms of the Space Act Agreement NASA an “exit ramp” in case the the traditional contract approach were written to allow companies partner was unable to raise its share resulted in systems that would to retain a great deal more of their of the capital.109 Such a scenario be owned and operated solely by intellectual property rights in data and was not only possible, but indeed NASA. “We wanted companies to inventions than was permitted with a became a reality after the Round 1 be able to freely innovate, to take traditional NASA contract. COTS competition. maximum advantage of whatever In the COTS program, because these concept they had, whatever strengths partners were not performing work they had in their company that could directly for the government, NASA bring this capability to market with was not entitled to their intellectual the minimum constraints possible,” said Lindenmoyer.107

22 CHAPTER 2 – CONCEPT TO REALITY International Space Station

The other key component of the COTS program involved the International Space Station itself. The question of whether or not to use the ISS as the orbital test bed for companies’ demonstrations to low-Earth orbit did result in a minor legal dilemma. On the one hand, the COTS program aimed to allow for as much creativity in design as possible, without the imposition of detailed specifications. On the other hand, companies with sights on a demonstration mission to the ISS had to contend with the Station Program’s set of strict, predefined visiting vehicle requirements for rendezvous, proximity operations, and berthing or docking. The inclusion of ISS requirements would have violated both the and the letter of the COTS model of minimal requirements.

Ultimately, companies were presented with the option of using Vehicles visiting the International Space Station follow strict requirements for rendezvous, proximity operations, and berthing or docking. Adhering to these requirements was the the International Space Station to Aerospace Exploration Agency for its HTV, (pictured above), a large unmanned demonstrate the capability to deliver capacity cargo vehicle that first transferred supplies to the ISS in 2009. The vehicle’s cargo to a vehicle in low-Earth orbit. nickname, Kounotori, is the Japanese word for “white stork,” symbolic of the important Consequently, if that option were cargo it ferries to the astronauts living in low-Earth orbit. chosen, companies that elected to use the Station as an orbital test set of language. As part of the particular integration with the Russian bed would be obligated to meet proposed business plan, submissions Soyuz and Progress spacecraft, the ISS requirements. Although the needed to include an Operational ’s Automated majority of bidders ultimately did Readiness Plan that explained how Transfer Vehicle (ATV), and the Japan propose to visit the ISS in order to the company planned “to offer Aerospace Exploration Agency’s H-II 111 better position themselves to compete operational services” to ISS. Transfer Vehicle (HTV). How could for a future services contract, it was startup companies, without the With that legal technicality resolved, important that this was not levied as detailed background knowledge of the next issue presented itself in a strict requirement.110 ISS visiting vehicle integration, have the form of the ISS visiting vehicle a fair chance in the competition? For those that chose to demonstrate requirements. Hundreds of pages The answer lay in the expertise to a test bed other than the ISS, with thousands of requirements had of Lindenmoyer’s chosen Deputy the draft SAA included an alternative evolved over the decades-long history Program Manager, Valin B. Thorn. of ISS development and operations, in

CHAPTER 2 – CONCEPT TO REALITY 23 Valin B. Thorn Crucially for the COTS program, this knowledge also encompassed Foundation C3PO Deputy Manager Valin B. Thorn the requirements for integrating graduated with a Bachelor of Science a new visiting vehicle into the ISS Ready Degree with honors from architecture. Already in April 2005 State University, and also attained Thorn had presented “ISS Commercial By January 18, 2006, NASA had a commercial pilot’s license with Cargo Services: Requirements and released the program’s Announcement instrument and multiengine ratings. As Constraints Summary” at the industry for Proposals with the terms of a member of the Experimental Aircraft day at JSC for companies interested in the competition. Included in this Association, Thorn had seen first- providing commercial cargo services Announcement was a draft Space hand what a small team of engineers to the ISS.113 Act Agreement friendly to commercial could accomplish, and strongly interests, allowing a degree of flexibility believed in the potential of commercial rarely seen in a government contract. spaceflight endeavors. Thorn came Interface Requirements In the span of a few months, the to C3PO with some 25 years of Document unique assemblage of engineers, aerospace experience, with 15 of lawyers, procurement specialists, and Instead of overwhelming those focused on ISS. Having led ISS a venture capitalist that comprised the companies with multiple volumes systems engineering and integration COTS team had succeeded in putting of documentation, Thorn and a teams such as Vehicle Integrated together the key documents for small team of support contractors Performance and Resources NASA’s new way of doing business, synthesized and distilled the most (VIPER) and Strategic Planning transitioning a set of unproven crucial information from existing and Requirements (SABER), Thorn concepts into the reality of the Interface Control Documents possessed a broad-based knowledge Commercial Crew & Cargo Program. for the ATV and HTV into of how different components of the the approximately 130-page ISS worked together.112 As Lindenmoyer observed, “The COTS Integration and Interface Space Act [Agreement] itself was so Requirements Document (IIRD). commercial friendly, companies loved this. They knew this was not business Only a few days after the COTS as usual. They knew this was going to Announcement, on January 25, 2006, be a different way of doing business, Thorn’s team released the IIRD and were very supportive of it and in an easy-to-follow format. The complimentary of NASA for developing document provided the companies this new way of investing.”116 an introduction and overview of what to expect regarding working with the The commercial space transportation 114 ISS while preparing proposals. industry was one step closer to its goal of delivering cargo to the Consistent with the COTS Model, International Space Station. When the IIRD introduction included the they embarked on this new, disruptive statement that “COTS providers are venture, some members of the COTS given flexibility to propose rationale

Credit: C3PO team Credit: team expressed unflagging confidence back to NASA for choosing to modify C3PO Deputy Manager Valin Thorn that the program would work, while or not meet a stated requirement.”115 utilized his knowledge and experiences others at NASA were less certain. gained from 25 years of working in the Applicants were encouraged to find One thing, however, was clear: the aerospace field and the ISS Program innovative, creative ways of doing JSC team, with help and guidance to help guide the new Commercial business, while still operating safely Crew & Cargo Program. As part of his from NASA Headquarters and outside and fulfilling the mission to low-Earth contributions, Thorn led the effort to experts, was going to give it a try. consolidate crucial integration information orbit; the requirements were not in an easy-to-follow document for important in and of themselves, but potential industry partners interested in for the ultimate purpose of providing flying their vehicles to the International commercial cargo transportation Space Station Program. services to the ISS.

24 CHAPTER 2 – CONCEPT TO REALITY Competition

Round 1 Round 2 Unfunded Space Act Agreements

CHAPTER 3 – COMPETITION 25 chapter 3 The first COTS competition took place in 2006, as the Commercial Crew & Cargo Program Office (C3PO) embarked on the operational phase of NASA’s new way of doing business with the private space industry.

Round 1 Round 1 Announcement proposed. The COTS selection team viewed this abbreviated proposal as NASA released the Commercial a first step before conducting the Orbital Transportation Services decisive face-to-face due diligence. (COTS) Announcement for Proposals Members weighed this so-called “kick on January 18, 2006.117 After a brief the tires” stage as a venture capitalist introduction explaining the COTS would, using it as a prescreening background and philosophy, the mechanism usually not permitted by Announcement described NASA’s FAR-based procurements.120 intent to award funded Space Act Agreements (SAAs) for spaceflight According to C3PO Deputy demonstrations to low-Earth orbit of Manager Valin B. Thorn, many of the the following capabilities: companies that submitted proposals actually found that preparing these A: External cargo delivery consolidated submissions, limited and disposal to the most important points, was B: Internal cargo delivery actually more difficult than including and disposal every possible element in detail. C: Internal cargo delivery However, having a concise and to- and return the-point proposal made it easier for evaluators to determine its merit and D: Crew transportation still provided sufficient information to 121 The Announcement also included differentiate between companies. several other key provisions. First, Finally, the draft Space Act Agreement because the COTS program aimed to found in the Announcement’s develop a U.S. capability to low-Earth appendix provided the legal basis for orbit, the Announcement specified key provisions such as intellectual that the company be “more than property rights. Companies were 50 percent owned by United States allowed to propose alterations for nationals,” or provide substantial specific needs and to identify their evidence of its commitment to unique milestones with requested U.S. interests.118 Companies, of NASA funding for each. course, needed to comply with U.S. laws such as commercial space NASA attorney Amy V. Xenofos launch acts, and the and Syria reported that NASA had little idea Nonproliferation Act.119 of what kind of proposals to expect from companies interested in NASA’s Second, the Announcement specified new way of doing business.122 By the format and the page count for the not imposing technical requirements, prescribed proposal contents, limiting the Announcement allowed the submission to 65 to 90 pages companies to submit a creative depending on which capabilities were range of possibilities. Despite this

26 CHAPTER 3 – COMPETITION of government contracts. The panel understood the importance of examining the proposal’s technical merit—important for spacefaring vehicles aiming to service the International Space Station—as well as the potential partner’s viability as a commercial entity.

C3PO Manager Alan Lindenmoyer chaired the Participant Evaluation Panel, overseeing the efforts of the three PEP committees: technical, business, and financial. The committees drew on teams of advisors and technical experts, but only six members were granted a vote: the PEP Chairperson, Technical Committee Chair, Business Committee Chair, Financial Committee Chair, Safety and Mission Assurance Senior Representative, and a Contracting Officer-Agreements Officer.125

Thorn led the technical committee, applying his years of ISS integration experience to determine the feasibility of the plans to reach ISS. His team

Credit: NASA/Bill Ingalls Credit: included representatives from Soon after becoming NASA Administrator, Mike Griffin (seated left) assigned a fixed multiple NASA centers and a variety $500 million allocation over a five-year period to focus on commercially-developed cargo transportation capabilities. Responsible for the new program was Scott “Doc” of disciplines. Bruce A. Manners, Horowitz (right), NASA’s Associate Administrator for the Exploration Systems Mission who would later serve as a COTS Directorate. He served as the Selection Authority for the COTS program’s first round Project Executive, was one of the nine of Space Act Agreements. members of this team. flexibility, C3PO Program Integration and processes that had evolved Stone was able to apply his Manager Dennis A. Stone stressed over decades of NASA-contractor knowledge of the commercial space that a detailed evaluation plan was relations.124 The Participant Evaluation industry and potential markets in his established before proposals arrived Panel (PEP) was set up to review the role as chairman of the six-member and was “strictly followed.”123 proposals, and carried over many business committee that also included principles and procedures from the venture capitalist Alan Marty. The business committee evaluated the Participant traditional government procurement Source Evaluation Board. company’s potential to “operate Evaluation Panel a sustained, profitable entity that The variations introduced by COTS may supply the market of space Just as the legal team endeavored to allowed the PEP to preserve the transportation services to NASA and help NASA meet its mission through program’s goals of not imposing other customers,” and examined the institution of funded SAAs, the overly strict requirements, and to aspects such as the experience of procurement team contributed “level the playing field” for startup each company’s management team their knowledge of fair acquisition companies with little or no history and financial plans.126 and objective selection practices

CHAPTER 3 – COMPETITION 27 The small, three-member financial Before the PEP conducted a more The PEP assigned a color to each committee, chaired by Vickie H. in-depth analysis, the Contracting level of confidence (blue for very high, Gutierrez, evaluated the reliability of Officer-Agreements Officer was green for high, white for moderate, cost estimates and the requested responsible for an initial review of yellow for low, and red for very low). amount of funding from NASA. Mark the proposals. NASA Contract A matrix provided a visual summary D. Erminger served as the senior Specialist James W. Bailey of key proposal attributes the PEP representative from the Office of determined whether or not the took into account: capabilities Safety and Mission Assurance, and submissions were “consistent with covered, the color ratings, potential would continue as the designated Announcement’s instructions” and markets, amount requested from Safety and Mission Assurance Officer “otherwise acceptable for purposes NASA, and the choice of orbital test for the majority of the COTS program. of evaluation.”130 bed (ISS or other).133

After passing this preliminary Proposals compliance review, the PEP found Selection that 18 submissions met the Step 1 In total, NASA received 21 proposals NASA made the decision to select Initial Screening criteria of feasibility, from 20 companies “across the full two companies in order to allow for relevancy, and affordability for spectrum of the industry” by the March competition, while at the same time commercial resupply services to 3, 2006, deadline.127 Scott J. “Doc” being able to distribute sufficient ISS within the desired timeframe.131 Horowitz, the Selection Authority at amounts of money to each partner for The PEP evaluated these NASA Headquarters for the COTS their development programs.134 Only proposals on 1) how well the plan, Space Act Agreements, described the 3 percent of the COTS budget was if implemented, would meet the proposals as ranging from “somebody set aside for operating funds, leaving goals of the Announcement, and [who] was going to build a rocket $485 million total for distribution 2) confidence that the plan could be engine in their garage” to some that between the selected partners. implemented. In keeping with the offered to conduct a study without goal of providing opportunities building any physical hardware, and Prior to the final decision, the PEP for both startups and established “everything in between.”128 sorted the findings into candidate aerospace contractors, the PEP did portfolios, i.e., combinations of The companies ranged from major not consider past performance finalists that listed a variety of options names in the aerospace industry under government contracts in the to fit both the needed capabilities for such as The Boeing Company decision-making process. Evaluators ISS resupply and the COTS budget. and Lockheed Martin Corp. (which did, however, examine the past According to Stone, “This was a most submitted two proposals, one for experience of company leaders, significant departure from standard all four capabilities, and one for only as well as its business plans and SEB practices.”135 132 Capability B), to established but management structures. smaller-scale launch companies such The PEP then reported its results Instead of numerically scoring the as Orbital Sciences Corp., to little- to the ultimate Selection Authority, proposals as in a traditional Source known startups such as PanAero Inc. the Associate Administrator for Evaluation Board, submissions and Venturer Aerospace.129 Some ESMD at NASA Headquarters, and were assigned levels of confidence proposals included vehicles that his executive council composed based on how convinced NASA was resembled the soon-to-be-retired of various internal and external that the company could execute its Space Shuttle, while other designs stakeholders. Advisors included proposed plan, from “very high level were similar to the capsule spacecraft NASA Headquarters representatives of confidence” to “very low level of the . Multiple from the Office of Safety and Mission of confidence.” These levels were proposals relied on heritage concepts Assurance, General Counsel, based on the degree of strengths and and hardware, while others advanced Procurement, and Engineering, as weaknesses established in each of new technology such as non-water well as the program offices of ISS the three committees’ findings. on airbags. and Constellation. George C. Nield

28 CHAPTER 3 – COMPETITION represented the Federal Aviation Administration Office of Commercial Space Transportation, and Selection Authority Horowitz also brought in Byron M. Allen as an independent business consultant.136

Horowitz took various factors into account in his decision, including the total cost, capabilities covered, the color-coded rating, both business and technical risk, and potential markets for the capabilities developed.137 Based on PEP input, Horowitz selected six finalists (listed in alphabetical order): Andrews Space Corp., Rocketplane Kistler Limited Inc. (RpK), SpaceDev, Inc., Space Exploration Technologies Corp. (SpaceX), SpaceHab Inc., and the Transformational Space Corp. (t/Space). Significantly, none of the selected companies represented the major names in the industry with decades of government contract experience, but rather exemplified the emerging NewSpace community.138

These six finalists then underwent a series of intensive due diligence meetings. PEP members visited SpaceX Credit: SpaceX responded to NASA’s COTS Announcement with a proposal that included a facilities and spoke to management two-stage Falcon 9 launch vehicle (left) capable of delivering 78,000 pounds of thrust, personnel “face to face, eyeball and the capsule-shaped Dragon to carry crew and cargo to and from the ISS. After to eyeball,” to better understand separation from the rocket, the Dragon would travel to the International Space Station company operations, particularly the where an ISS astronaut would use the Canadarm2 to grapple the spacecraft (right). qualifications of the management team and the proposed funding plans.139 address any weaknesses evaluators two speakers to explain the may have found, and the PEP company’s proposal to the Also present were venture capitalist subsequently adjusted the findings Headquarters selection team—an Alan Marty and JSC attorney and color ratings for each competitor. added measure not typical of NASA Jonathan A. Arena. The due diligence As a result of this process, most procurements.142 Of the six finalists, sessions included negotiations on of the companies were able to Horowitz and his team found SpaceX Space Act Agreements and desired improve the ratings for their business, to be the clear leader for both the funding levels, sometimes requiring technical, and financial plans.141 technical strengths of the company’s days of back-and-forth discussions Falcon rocket and Dragon spacecraft, between the companies and NASA During the final phase of the as well as the company’s solid 140 legal and procurement personnel. selection process, on August 15 and plan for capturing a Companies were also invited to and 16, each finalist was allowed share of the launch market.

CHAPTER 3 – COMPETITION 29 For the second partner, Horowitz narrowed the selection down to two potential companies. Rocketplane Kistler exhibited an impressive technical plan for the reusable K-1 launch system, but had some weaknesses in its financial credentials. On the other hand, SpaceDev presented a stronger business case, but had a less credible technical plan for developing its spacecraft. The Dream Chaser was based on NASA’s HL-20 concept from the early 1990s, and Credit: C3PO team Credit: would utilize an V launch vehicle Serving as the Selection Authority, to reach low-Earth orbit.143 Scott “Doc” Horowitz, NASA Associate Administrator of Exploration Systems Mission Although “the executive council Directorate (ESMD), signed the Space Act was evenly divided between these Agreements, August 18, 2006, officially starting the NASA Commercial Orbital two finalists,” NASA ultimately Transportation Services program partnerships selected RpK as the second COTS with SpaceX and RpK. Sue Fenn, ESMD partner. Horowitz noted in the Final Executive Assistant, is also pictured. Selection Statement that “SpaceDev’s technically complex design with its each of the negotiated milestones.148 associated adverse cost and schedule The milestones were placed at implications was a greater risk than intervals of roughly one every RpK’s financial uncertainty.”144 quarter, allowing NASA to periodically The inclusion of financial milestones track their progress, but without 149 to mitigate RpK’s known financing undue interference. risk contributed to the Selection Authority’s decision.145 As Horowitz Round 1 Protest would explain later, “In order to be selected they had to be technically In late 2006, NASA received the first viable. That was the tipping point.”146 legal challenge to the Agency’s use Furthermore, RpK proposed to of funded Space Act Agreements. provide services on an earlier timeline, Exploration Partners LLC—one of Credit: KAS 1989-2002 Credit: Rocketplane Kistler proposed its K-1 and its requested contribution the unsuccessful proposers from the launch vehicle for crew and cargo launch from NASA fit within the available COTS Round 1 competition—argued services to the ISS. (Top photo) The COTS funding.147 to the Government Accountability fully reusable system was designed to Office (GAO) that the company accommodate a wide range of missions On August 18, 2006, SpaceX and should have been awarded one of and launch satellites to a geosynchronous RpK signed the first funded Space orbit. Operating in two stages, the K-1 the COTS Space Act Agreements, Launch Assist Platform (first stage) was Act Agreements of the COTS on the grounds that it was “the only designed to carry the Orbital Vehicle competition. The companies were company that offered a fully funded (second stage) to its trajectory in low- awarded a total of $278 million and end-to-end transportation system.”150 Earth orbit. For NASA’s COTS program, $207 million respectively (based the Orbital Vehicle could be configured to on the amounts requested in each On December 19, 2006, GAO transport per mission about 2,900 pounds of cargo or up to five crew members company’s proposal) to be paid denied the Exploration Partners (bottom photo). in increments upon completion of protest. First, GAO found that the

30 CHAPTER 3 – COMPETITION protest was not submitted in a limited to submitting one proposal. timely manner. Second, in what was Round 2 Other changes refined the described as a “landmark” case structure of the proposal, reduced for the Agency, as a result of the In October 2007 NASA elected to the page count, and updated ISS protest, GAO determined that it did terminate the SAA with RpK, citing interface requirements.157 not have jurisdiction over the award the company’s failure to meet its of funded Space Act Agreements.151 financial and subsequent technical The Round 2 Announcement asked for Past precedent had determined milestones. Aware that they may need additional financial data in the proposal the GAO’s lack of authority over a contingency plan of action as RpK which previously was requested cooperative agreements, and this began to falter, the COTS team began during due-diligence meetings. This case extended the same principle brainstorming how to proceed forward enabled the business team to have all to other non-contract awards, with the program. Instead of allocating financial data earlier in the process for 158 including SAAs. GAO only monitors the funds to a runner-up from Round thorough evaluation. whether or not the Agency used the 1, C3PO decided that the best way Similarly, the COTS team was able appropriate legal instrument; i.e., to continue the program’s goals was to further streamline the evaluation whether NASA was justified in its use to hold another round of competition and due diligence process, while of an SAA or should have used a and selection. This advanced planning maintaining most of the elements traditional procurement. allowed C3PO to announce a new competition within a month of RpK’s that had worked well during the The COTS legal team at JSC and official termination. first round. Retaining most of the NASA Headquarters credited their same PEP members and committee diligence during the formation of NASA had paid a total of $32.1 million chairs contributed significantly to the COTS for the successful defense to RpK, which after an approximately efficiency of the Round 2 selection. of the Agency’s funded Space Act five percent reduction for program One change was the consolidation Agreements. Even before the SAAs operations left $170 million of of the COTS business and finance were awarded, the attorneys made unassigned COTS money for a new functions into one business sure to forge a consensus within partner. The Round 2 Announcement committee. According to Xenofos, NASA so that all the involved parties issued on October 22, 2007, gave “We got a little bit smarter about understood that these awards were previous competitors the opportunity how we did the evaluation process,” not for goods or services being to submit updated or improved though the process was still not 159 purchased for the direct benefit of the financial and technical information, disclosed to companies in detail. government, but rather to stimulate a while also allowing new competitors public purpose.152 a chance to propose plans for the Selection remaining funds.155 Attorney Karen M. Reilley explained NASA received 13 proposals by how “not only did we need to Lessons Learned the November 22, 2007, deadline come up with a process, educate that gave companies one month to ourselves and the rest of our own Due to the success of the COTS prepare their Round 2 submissions. internal community, but document Round 1 selection, the team was Some of the Round 2 participants that. We made sure that we had a able to use an almost “cookie cutter” had applied during Round 1, such good record, literally on paper, of the approach for Round 2, retaining as Andrews Space, Boeing, Orbital decision-making process that we many of the same elements and Sciences Corp., and SpaceX, and 153 had gone through.” Arena added, people who had participated in the four of the companies had signed “As lawyers, we wanted it to be first selection.156 The basic text and unfunded Space Act Agreements defensible. We knew what we were structure of the Announcement with NASA earlier that year to help doing was very unique, and so we remained almost identical, but some them develop their technology without 154 were likely to get criticized.” modifications reflected lessons milestone payments. A few new learned from the first competition. competitors, such as TGV Rockets, For example, each company was Inc., also joined the race.

CHAPTER 3 – COMPETITION 31 Credit: Orbital Sciences Corp. Credit: For the COTS Round 2 selection, Orbital Sciences Corp. proposed its Taurus II launch system (left). Later renamed Antares, this was the first vehicle developed by the company to use a liquid first stage. Antares (top right) would be equipped with AJ-26 engines and utilize on its second stage a solid rocket motor from ATK. To deliver cargo to the ISS, in Italy would build Orbital pressurized and unpressurized cargo modules (bottom right).

Four proposals were eliminated due of due diligence: Andrews Space, First, in Cooke’s analysis, the to deficiencies in their business plans. The Boeing Company, Orbital most immediate ISS need was for The SpaceX proposal was dismissed Sciences Corp., PlanetSpace, Inc., cargo delivery and disposal, i.e., because it “was only to accelerate the and SpaceHab, Inc. In February Capabilities A and B. Although crew transportation capability under its 2008, Selection Authority Douglas R. cargo return for scientific research existing funded Space Act Agreement Cooke, who succeeded Horowitz as samples and crew (Capabilities C and did not provide an executable Associate Administrator for ESMD, and D) were “desired,” they were demonstration plan within the available ultimately selected Orbital Sciences not as necessary at the time of the NASA funding.”160 The remaining eight Corp. as the winner of the COTS selection, particularly considering that proposals were evaluated according to Round 2 competition. Cooke’s other routes to crew transportation levels of confidence, using the same decision between the two strongest were available from the Russian process as in Round 1. contenders, Orbital Sciences Corp. Federal Space Agency () and The Boeing Company, hinged on and the Orion crew capsule being Of these eight, five finalists were two deciding factors. developed under the Constellation selected to proceed to the step Program.161 Boeing proposed all four

32 CHAPTER 3 – COMPETITION capabilities, with crew as an unfunded NASA signed the funded Space Act option, but Orbital’s proposal of only Agreement with Orbital Sciences Unfunded capabilities A and B fit better within Corp. on February 19, 2008, the needed portfolio of commercial incorporating the lessons learned Space Act transportation services. from RpK’s termination. In the words of Project Executive Bruce Manners: Agreements Second, as Cooke stated in his “NASA does a really good job at Selection Statement, “A key understanding what technical risks An important element of the COTS discriminator in this decision is the are. But since we had gotten our program was NASA’s decision to 162 business plan for each company.” hands burnt on what was always also work on an unfunded basis NASA had learned from experience RpK’s biggest risk on the business with some of the non-selected that a company’s financial stability side, which was outside of our realm,” companies. On January 31, was just as important, if not more so, in Round 2 “we picked somebody 2007, NASA signed Commercial than its technical approach. Boeing that was a fairly low business risk, Space Transportation Capabilities and Orbital had the two strongest who already had the money in-house Agreements, or unfunded Space Act business cases of the finalists, but and the ability to put this together.”165 Agreements, with PlanetSpace and Boeing proposed to buy launch t/Space, two of the unsuccessful services from other companies, proposers from the Round 1 COTS whereas Orbital was developing its Round 2 Protest competition. These non-reimbursable own launch vehicle, the Taurus II SAAs were followed a few months In January 2008, GAO decided the (later renamed Antares). Launch costs later with similar agreements signed second protest regarding the COTS would therefore be more directly on June 15, 2007, with three of the program. After NASA terminated under Orbital’s control. other Round 1 offerors: Constellation its Space Act Agreement with Services International, SpaceDev, Rocketplane Kistler in October Furthermore, Orbital already had the and SpaceHab.168 internal funds necessary to complete 2007, the company protested to development; the company had the subsequent COTS Round 2 These agreements allowed the no need to seek additional investors Announcement to issue RpK’s partners access to NASA technical or income. Antonio L. Elias, Orbital remaining funds to another expertise without the payments of Executive Vice President and commercial partner. RpK claimed funded SAAs. The unfunded SAAs Chief Technical Officer, described “that the principal purpose of the did include milestones, but C3PO the moment when he explained announcement [was] to obtain observed their completion as opposed the company’s finances to COTS research and development services to conducting a formal evaluation. representatives during due diligence for the direct benefit of NASA,” and Sometimes the process was as simple meetings: “It was as if this huge therefore should have been issued as receiving a letter from an unfunded load had been lifted, a sigh of relief. under a procurement contract instead partner indicating they had achieved 166 All of a sudden the great black of a Space Act Agreement. the required milestone criteria. cloud on top of the COTS program This protest was also denied, on had been released.”163 Being able to continue these the grounds that “the record companies’ relationship with NASA Cooke also found that in the areas of supports the agency’s arguments after the selection decision was science missions and that the principal purpose of the important to Lindenmoyer. “He was launches the Taurus II would meet a announcement is to encourage, insistent,” recalled NASA attorney real market need for a medium launch support and stimulate the Sumara Thompson-King, because vehicle capability, which he said met development of a commercial market the purpose of COTS was “to the “objective of COTS to stimulate a for space transportation”—not to stimulate industry, so having those broad space transportation market for obtain a good or service for the direct unfunded agreements would keep multiple customers.”164 benefit of the government, which those folks in the game.”169 They would in fact require a procurement.167

CHAPTER 3 – COMPETITION 33 would have the chance to continue stating, “We are unable to continue the development of their vehicles to meet our milestones using only for future NASA competitions, and internal funding.”174 Constellation NASA was able to show the Agency’s Services International followed support for commercial space on July 15, 2008, reporting that its transportation initiatives.170 ISS commercial cargo resupply service project was being put into PlanetSpace Having established the legal “indefinite hibernation.”175 That framework for the COTS funded October, t/Space also unilaterally SAAs, the team of NASA attorneys terminated the company’s unfunded also made these unfunded SAA with NASA.176 agreements possible. Through “robust” conversations and policy SpaceDev was acquired by the Sierra study, the lawyers determined that Nevada Corp. in October 2008, and NASA would be able to pursue the company continued development unfunded cooperation with these of the Dream Chaser vehicle as part SpaceDev industry partners to help provide of NASA’s subsequent Commercial technical advice, but without going Crew Development (CCDev) Program. so far as to use the agreement as a PlanetSpace competed for the ISS NASA endorsement.171 Commercial Resupply Services contract awarded in December 2008, Although no set rule existed for how but was outdone by funded COTS many unfunded agreements were participants SpaceX and Orbital. possible, the extent of help was Constellation Services International limited to available NASA personnel time. Each of the unfunded partners was assigned to one of NASA’s two project executives, who were available to answer telephone calls and arrange for additional technical assistance if necessary.172

All of the companies with unfunded t/Space SAAs, except Constellation Services International, submitted proposals for the COTS Round 2 competition, with PlanetSpace and SpaceHab making it to the final round. Both PlanetSpace and SpaceHab were highly rated for their technical approaches for Capabilities A through SpaceHab C, but the companies fell short on NASA entered into unfunded Space Act their respective business plans.173 Agreements with companies not selected in the COTS Round 1 selection process, Following the Round 2 COTS allowing these partners access to award, three of the unfunded COTS NASA technical expertise to assist companies in further development of their participants elected to unilaterally vehicles. Above are illustrations of the terminate the agreements with concepts proposed by the five partners. NASA. On May 29, 2008, SpaceHab gave 30-day notice of its termination,

34 CHAPTER 3 – COMPETITION Program

Funding Organization Operations

CHAPTER 4 – PROGRAM 35 chapter 4 NASA’s Commercial Crew & Cargo Program Office (C3PO) contributed to the development of commercial space transportation services by offering a new form of partnership between the space agency and private industry. The success of this effort depended on the synthesis of limited government funding, an innovative operating philosophy, and the people who put these elements together. C3PO focused on administering NASA’s obligations under the Commercial Orbital Transportation Services (COTS) Space Act Agreements. This included verifying that partners met their predefined milestones, processing milestone payments, and providing technical expertise and support to the partners when needed.

Funding

The COTS program aimed to maximize competition had been announced— the use of government funds in order and asked for a $236 million to stimulate the U.S. commercial appropriation. By the time the fiscal space transportation sector. Of the year 2008 budget was signed into $500 million originally allocated in law in December 2007, the plan and 2006, C3PO designated only 3 percent circumstances of C3PO operations for program management, leaving 97 had changed. Most significantly, the percent, or about $485 million, to give SAA with RpK had been terminated directly to the commercial partners. two months previously. In its five-year operating plan set forth in August 2006, C3PO planned the Congress appropriated only about distribution of its budget in such a way $160 million to C3PO, a $76 million that the majority of funds would be reduction, and the bill specified that available to the commercial partners COTS could not move forward with in the middle of their development the selection of a second commercial programs (see table below).177 partner until the Government Accountability Office (GAO) protest In the first round of COTS competition regarding the COTS Round 2 in 2006, $278 million was awarded Announcement had been decided. to the Space Exploration According to COTS Resource Analyst Technologies Corp. (SpaceX) Lisa P. Price, a Congressional staffer and $206 million was awarded to asked the program if it could accept Rocketplane Kistler (RpK).178 a budget reduction in fiscal year 2008 in exchange for greater appropriations The C3PO budget request for fiscal in later years. Price and her colleagues year 2008 (October 2007 through were then able to develop a phasing September 2008) had been submitted plan that allowed for the continuation to NASA Headquarters in the summer of the SpaceX SAA and the selection of 2006—before C3PO was officially of a new partner under the program’s incorporated and before the Round 1 revised budget profile.179

COTS Project FY06 FY07 FY08 FY09 FY10 Total

Funding ($M) 52 91 193 130 34 500

Originally planned COTS funding.

36 CHAPTER 4 – PROGRAM In January 2008 the GAO denied Augmentation us in the future. It was time to invest the Round 2 protest, freeing NASA a little bit more money to keep that to select Orbital Sciences Corp. as C3PO continued to operate with moving forward.”183 its new partner in February 2008. the understanding that it would Orbital was awarded a funded have only the original $500 million Meanwhile, advocates of NASA’s Space Act Agreement (SAA) for the funding allocation to complete the new way of doing business had remaining $170 million of available development of both partners’ been working to promote COTS to COTS funding. At this point C3PO commercial space transportation important policy influencers increased the percentage of the systems. However, around 2009 in Washington, DC, particularly budget withheld for program NASA and Congressional leaders the Review of United States Human management from 3 percent to began to assess the need to maintain Spaceflight Plans Committee. about 5 percent to accommodate ISS operations after the impending The White House Office of Science the additional development time retirement of the Space Shuttle and Technology Policy commissioned needed for NASA’s new partner. (originally planned for 2010). the committee in May 2009 to C3PO Manager Lindenmoyer review the nation’s progress and William H. “Bill” Gerstenmaier, NASA reported that a traditionally run NASA plans for space exploration. More Associate Administrator for the Space Program may dedicate 10 to 15 often referred to as the Augustine Operations Mission Directorate, percent of its budget to overhead, so Commission for the panel’s chair, explained how additional funds even at the increased 5 percent level, Norman R. Augustine, this group of were needed to provide “mission COTS still represented a significant spaceflight experts included former assurance” for the commercial cost savings when compared to NASA astronauts and representatives resupply capabilities that were traditional NASA programs with from private aerospace corporations. becoming increasingly critical to the markedly higher management costs, Agency’s mission.182 Gerstenmaier Bretton Alexander, former President and budgets in the range of tens of reflected that, “the focus had changed of the Commercial Spaceflight billions of dollars.180 a little bit. Development of this new Federation, later reflected that “by In addition to C3PO’s novel use industry was going to be critical to putting someone like Norm Augustine of funded Space Act Agreements that allowed partners to receive payment only after the completion of predefined milestones, the program also applied innovation to the process for partner milestone payments. Under procurement contracts, payment could take up to 15 or even 30 days, but in her role as the COTS Resource Analyst, Price was able to coordinate with her colleagues to establish a process that allowed payments to be deposited in the company’s bank account within only 3 days of milestone approval. Price described her goal as an effort “to get that money to the partners as quickly as we could so that they could continue to work without In May 2009 the White House Office of Science and Technology Policy commissioned interrupting their efficiency.”181 a panel to review the nation’s progress and plans for space exploration. Referred to as the Augustine Commission, this group of spaceflight experts recommended NASA’s commercial cargo initiative receive more funding to “incentivize” the COTS cargo demonstrations. C3PO ultimately received a $300 million augmentation as a result of this assessment.

CHAPTER 4 – PROGRAM 37 The White House accepted the Augustine Commission’s recommendation for augmented COTS funding. NASA’s FY 2011 budget request, submitted in February 2010, asked Congress for an additional $312 million for commercial cargo development, a 62 percent increase over the $500 million budget that C3PO had been allocated in 2006.187

Furthermore, as a result of the Augustine Commission’s finding that the Constellation Program was too far behind schedule and too over budget to meet its goals, in February 2010 President Obama announced the program’s cancellation. In addition to the retirement of the Space Shuttle, Marc G. Timm from NASA Headquarters called this decision “a big turning point, where Credit: NASA/Paul E. Alers Credit: Norm Augustine (right) chaired the 2009 Presidential Commission, Review of U.S. Human the partners became the primary Spaceflight Plans Committee. Serving as one of the panel members was , the systems for transporting cargo to first American woman in space. Ride (left) presented the Commission’s analysis that and from Station.”188 included the recommendation of a one-time funding addition to the COTS cargo budget. The NASA Authorization Act of 2010, passed on October 11 of that year, at the top, I would have thought “We elected to add an additional explicitly approved NASA’s plan to you were guaranteeing it to never $200 million—this is a one-time augment C3PO funding. It stated say anything good about [NASA’s] add—to the COTS cargo baseline in that, “$300,000,000 shall be for commercial [initiatives], because he FY ’11 … to incentivize the current Commercial Cargo,” and that “the was not known for that.”184 COTS cargo demonstrations. We’ve Administrator may apply funds towards all come to realize how important the the reduction of risk to the timely start However, to the surprise of Alexander COTS cargo is to the future of ISS, of these [commercial] services.”189 as well as C3PO, the committee and we want to make sure that there’s advised that more funding be added incentive for them to perform as we all This $300 million augmentation to NASA’s commercial cargo initiative. 185 hope they will.” (slightly less than the $312 million Members of the COTS team at NASA requested since $12 million JSC reported first hearing of this The eventual Augustine Report was needed to complete the original recommendation to add funds to the released to the public on October 22, $500 million program) helped ensure C3PO budget while watching CSPAN 2009, included the statement that, that commercial cargo resupply coverage of an Augustine Commission “NASA’s planned transition of much of services to the International Space hearing in Washington, DC on the International Space Station (ISS) Station would be available after the August 12, 2009. Committee member cargo resupply to the commercial retirement of the Space Shuttle in Dr. Sally K. Ride, the first American sector is a positive development. July 2011. For more on how these woman in space, presented the Financial incentives should be added augmentation funds were applied, Commission’s “Scenario Affordability to those suppliers to meet their see Chapter 5: Commercial Partners Analysis,” and announced: schedule milestones.”186 and Chapter 6: Collaboration.

38 CHAPTER 4 – PROGRAM and drew on engineers and technical to commercial partners and vice Organization experts from across the Agency to versa. Both worked to establish a create an “on-call” team known as true partnership with their respective C3PO operated with a very small the COTS Advisory Team (CAT). industry partners, lending NASA full-time staff to implement its A designated Safety and Mission expertise and providing guidance partnerships with industry. At most, Assurance Officer was involved on spacecraft development rather 14 NASA civil servants were employed throughout the program. Marc G. than relentlessly monitoring the in C3PO, in comparison to traditional Timm, the Program Executive at implementation of specific, NASA- programs that employed hundreds NASA Headquarters, with the aid of imposed requirements. of government employees to monitor assistant Andrea M. Riley, served as technical development. the liaison between the program office The position of the COTS project in Houston and senior NASA officials executives was somewhat analogous The small percentage of the C3PO in Washington, DC.191 to the job a project manager might budget designated for program do in a more traditional Federal management was judiciously Acquisition Regulation-based applied to cover the salaries and Project Executives contract, but there were important travel of program office personnel; differences. According to Bruce A. Not only did C3PO work towards support from JSC safety, budget, Manners, the COTS Project Executive the most effective use of limited and procurement offices; as well as for RpK and Orbital, the project government funds, the program funding for “as needed” expertise. executive served more as a facilitator emphasized limited NASA oversight As Price stated simply: “The size of without dictating, driving, or owning 190 to allow the commercial partners the workforce drives the cost.” the design or the program. He added to pursue innovation. The project that with COTS, NASA was trying to The program maintained lean executives and their deputies do something “broader” and not just operations, relying heavily on its served as the essential conduits for expecting the companies to “answer project executives and assistants, communicating NASA information our requirements.” Manners also said that at times he had “to reel” himself in and not give the companies the direction that they sometimes wanted COTS Program Executive Program Manager in order to allow them to make a Marc G. Timm Alan J. Lindenmoyer 192 HQ better business decision. Deputy Program Manager Valin B. Thorn COTS Advisory Team Michael J. “Mike” Horkachuck, NASA (CAT) Administrative Assistant NASA Centers Starr Reynolds/Linda Turnbough Project Executive for SpaceX, shared, “Sometimes I’d just ask questions Agreements Officer Resource Analyst in a framework to make them think. Not necessarily looking for an answer 193 Program Integration Manager Chief Safety and Mission Assurance Officer immediately … but it’s a seed.” Dennis A. Stone Mark D. Erminger/Jeffrey H. Cyphert Because the project executives and their respective assistants closely followed the philosophy of guiding without forcing solutions, they were COTS Project Executive COTS Project Executive able to share technical expertise (SpaceX) (Orbital) Michael J. Horkachuck Bruce A. Manners and lessons learned in a genuine partnership relationship. “It’s much Assistant Project Executive Assistant Project Executive more managing through influence Warren P. Ruemmele Kevin M. Meehan than it is managing through force of position,” said Manners.194

Instead of the large organization typical of major NASA programs, the space agency used a small program office of about 10 civil servants to manage COTS.

CHAPTER 4 – PROGRAM 39 NASA Deputy Administrator Lori to participate in the Participant As part of his ISS integration work, B. Garver observed that NASA’s Evaluation Panel as a member of the Horkachuck had previously relationship with the commercial technical committee. studied options for how to return partners was akin to “grandfathers experiment samples more frequently taking their grandsons fishing,” Shortly after helping evaluate the to Earth than was possible with using a “gentle touch” to guide their COTS proposals in early 2006, the Space Shuttle, and helped protégés in the right direction.195 Manners permanently relocated include this important need into Furthermore, due to the nature of to JSC and began work on power the high-level ISS goals being funded Space Act Agreements, there and propulsion for the Constellation developed for the nascent COTS was no haggling over the cost of Program, where Manners reported he program at the end of 2005. changes that is experienced with a was able to draw on his experience After some months as Chief of typical contract, allowing for a more and professional ties to form a Development Testing and Verification harmonious relationship. partnership between engineers at Strategies for the Constellation GRC and JSC. In the fall of 2006, he Program, in September 2006 For both of the project executives, this was asked to utilize these skills as Horkachuck joined the COTS new role also meant the acquisition of the NASA project executive for RpK. team full-time as the NASA Project new skills. Manners and Horkachuck After NASA terminated its Space Act Executive for SpaceX.198 increased their business and financial Agreement with RpK in October 2007, proficiency through the COTS team’s Manners participated in the Round 2 In addition to his intimate knowledge collaboration with venture capitalist COTS selection as a voting member of ISS integration, Horkachuck’s Alan Marty, knowledge which would of the Participant Evaluation Panel, previous positions also involved become increasingly necessary as which awarded the remaining funds partnership-type collaborations RpK began to slip on its financial from RpK to another competitor. He with the European Space Agency, milestones. Horkachuck also began his work as the NASA project experience that could be applied to undertook additional training in how to executive for Orbital Sciences Corp. in his new role. After years of working handle the increased media attention February 2008.197 within the confines of traditional resulting from the SpaceX COTS NASA procedures, Horkachuck was demonstration missions.196 Mike Horkachuck ready to a support a more efficient Mike Horkachuck worked with way of doing business. He found Bruce Manners SpaceX as the NASA project SpaceX an appealing choice for a After receiving a B.S. degree in executive from August 2006 through partner. “I liked their innovative style, Electrical Engineering from Ohio the completion of the company’s and it just seemed like they were a Northern University in 1988, Space Act Agreement in 2012. more natural fit with my management Bruce Manners spent the first Horkachuck graduated from the style,” he said.199 years of his NASA career at the University of Southern California in (GRC) in 1983 with a degree in Mechanical Assistant Project Cleveland, Ohio, working on the Engineering, and began his NASA Executives ISS electrical power system. career at the Ames Research Throughout the COTS program, Manners eventually progressed to Center, where his work on the Horkachuck and Manners relied the position of Supervisory Engineer 1.8-meter centrifuge for ISS research on the support of their assistant of the Power Systems Analysis involved extensive coordination project executives. Assistant Project Branch, where he came to know with the Space Shuttle and Station Executive for SpaceX Warren P. both future C3PO Manager Alan J. programs. In 1996 Horkachuck Ruemmele brought his experience Lindenmoyer and Deputy Program moved to JSC, eventually being in mechanical engineering and as Manager Valin B. Thorn through the promoted to Manager of ISS Payload a Contracting Officer Technical ISS office. While serving as a liaison Hardware Engineering Integration, Representative and Technical for GRC at the Johnson Space managing the team that integrated Management Representative to the Center (JSC), Thorn invited Manners hundreds of science payloads with collaboration. Horkachuck described ISS and the Shuttle.

40 CHAPTER 4 – PROGRAM Credit: C3PO team Credit: SpaceX displayed a Dragon spacecraft during the 2011 Innovation Day event at the Johnson Space Center. Standing by the exhibit are C3PO team members: (front, left to right) Bruce Manners, Stan Whalen, Mark Erminger, Joyce Repa, Starr Reynolds, Alan Lindenmoyer; (back) Elijah Williams, Warren Ruemmele, Mike Horkachuck, Tom Clemandot, Derek Jones, Valin Thorn, John Bretschneider. multiple occasions when he relied Chief Safety and The NASA safety officer’s job included on Ruemmele’s aid, for example in Mission Assurance developing mishap preparedness assembling the COTS Advisory Team Officer and contingency plans for each and searching for NASA resources major integrated vehicle launch that could help SpaceX meet its Throughout the program, C3PO pad test and flight, detailing what milestones.200 Assistant Project included the position of a designated steps would be taken in the event Executive Kevin M. Meehan similarly Chief Safety and Mission Assurance of a mishap or incident, and who supported Bruce Manners in NASA’s Officer. As a demonstration of the would be responsible for leading engagement with RpK and Orbital. priority given to safety and mission an accident investigation. Prior to assurance, the safety officer was each demonstration mission, a The COTS project executives and their given a voting role as member of the mishap simulation was conducted respective assistants were the key Participant Evaluation Panel in both that included all responsible parties links in the public-private partnership COTS competitions. in the event of an incident. These between NASA and commercial included representatives from C3PO, The safety officer collaborated with space transportation companies. the Federal Aviation Administration, the COTS team and the commercial By respecting the commercial and the National Transportation partners to assess various areas partners’ unique business models Safety Board, as well as the NASA of risk, and periodically conducted and providing insight rather than Headquarters Chief of Safety and essential established safety reviews. oversight, the NASA project Mission Assurance and the Associate He participated in major technical executives were able to forge Administrator for the Exploration investigations as well as every major bonds that ultimately resulted in Systems Mission Directorate. the successful development of partner quarterly and milestone review. U.S.-based commercial space Additionally, the safety officer played Mark D. Erminger served as the safety transportation capabilities. an active role in C3PO program-level officer from September 2006 until his boards and meetings.

CHAPTER 4 – PROGRAM 41 retirement in September 2012, when Panel (ASAP) at NASA Headquarters, reducing costs for dedicated COTS Jeffrey H. Cyphert took over the role. after which he returned to JSC as the personnel. Indirectly, this arrangement Chief Safety and Mission Assurance also saved the commercial partners Throughout the program, the C3PO Officer for the COTS program.202 money, since development delays did Chief of Safety and Mission Assurance not result in an idle team of engineers maintained communication with the COTS Advisory Team waiting for work. When challenges JSC Safety and Mission Assurance arose, they were able to utilize CAT Manager and the Office of Safety Under COTS, the commercial expertise without hiring their own full- and Mission Assurance at NASA partners, not NASA, established time support staff. Headquarters. Due to the hands-off their own requirements and structure of COTS, however, the JSC To identify CAT members, C3PO were responsible for the design, safety officer was not always able staff reached out to engineers they development, and testing of to share as much in-depth technical had worked with previously, many their spacecraft. However, C3PO information as Headquarters officials of whom saw the COTS philosophy recognized at the beginning of COTS were accustomed to having. Cyphert as “interesting and challenging.”203 that subject matter experts would reported this was part of the learning Availability posed something of an be needed to advise the partners in curve in working with commercial issue at the beginning of the COTS particular areas of technical expertise. providers as opposed to traditional program, as many engineers were Maintaining a full-time contingent of NASA contractors.201 occupied with work on the Shuttle, engineers was inconsistent with the ISS, and Constellation Programs. COTS approach of lean operations. Mark Erminger Project executives sometimes Instead, the COTS team used encountered difficulty finding Mark Erminger received a Bachelor periodic targeted support when consistent support for reviews. of Science degree from the U.S. Air specific needs arose, especially for To remedy this, a dedicated point Force Academy in 1978, and an the major technical reviews. This of contact was later established M.B.A. from the University of Missouri group became known as the COTS at each NASA center to help access in 1980. In 1981 Erminger began his Advisory Team, or CAT. Members personnel.204 All NASA centers NASA career at the Johnson Space were often referred to as CATs. Center, where he worked in the Crew provided CAT support, including Training Division. In this position he The CAT served two main functions: trained astronauts and flight controllers providing partners with NASA’s As part of COTS development and on Space Shuttle operations and technical expertise and advising demonstration programs, partners met systems. In 1987, Erminger became a C3PO on whether partner milestones technical milestones that included major himself. were completed satisfactorily. The engineering reviews and engine tests. NASA team members traveled to the SpaceX teams were similar to the support With more than 10 years in Shuttle facility in McGregor, Texas, which has a teams that Horkachuck had set up number of testing stands, including the operations, Erminger was acutely for the Constellation Program, as tripod shown below that is used to test the aware of the critical importance of well as Boeing vehicle team support nine Merlin engines on the Falcon rocket. safety issues in low-Earth orbit. In hours that were used by the ISS 1992 Erminger moved to the office of Payloads Office to work technical Space Shuttle Safety, Reliability, and issues. A group of technical experts Quality Assurance as its Manager.

were identified for each discipline and C3PO team Credit: Among his other duties, in this an approximate budget of hours was position Erminger coordinated the allocated to allow for that support safety reviews of flight readiness for when needed. Space Shuttle and Space Station missions between three field centers This NASA engineering expertise and NASA Headquarters. was vital to COTS. Employing “as needed” experts helped create a more From 2003 to 2005, Erminger used efficient process for the development this experience as Executive Director of the commercial partners’ vehicles of the Aerospace Safety Advisory by lowering NASA overhead and

42 CHAPTER 4 – PROGRAM engineers from the Marshall Space Flight Center in Huntsville, Alabama, with its rich history of rocketry and propulsion.

CAT expertise grew to cover more than 30 subsystem disciplines, and numbered 100-plus individuals. Main CATs disciplines in addition to propulsion included avionics; electrical power; structures; parachutes; thermal control; thermal protection; Credit: NASA/ Credit: communication and tracking; NASA Stennis Space Center in Mississippi conducted test firings on the liquid-fueled guidance, navigation, and control; and Aerojet AJ-26 engines used to power the first stage of the Orbital Sciences Corp. launch pyrotechnics. David W. Thompson, vehicle. The first in a series of three firings, this test (pictured above) on November 11, CEO and President of Orbital, 2010, was held to verify start and shutdown sequences on the engines, along with test stand operations and ground-test engine controls. remarked that, “We had roughly half of the field center network within the Agency at one time or another, proprietary, each CAT member standards. They reviewed commercial providing know-how or surplus signed a non-disclosure agreement partner data and documented potential equipment to our work, which made a (or inherently protect proprietary data concerns, sometimes working with big difference.”205 as a civil servant), acknowledging the commercial partners to provide the importance of handling partner guidance and help with specific design When working through crack and data appropriately and keeping data challenges. However, they would not corrosion issues with its AJ-26 separate from the other partners. solve the commercial partners’ issues rocket engines, Orbital Sciences or dictate design solutions.209 Corp. engineer Kurt Eberly stated Although most CAT members were that “it was essential to bring all NASA civil servants, some contractors Commercial partners took the time that history that [Marshall engineers] also contributed, many of whom to explain their design approach have working with cracked metals.” were former NASA civil servant “grey and company philosophy to CAT He described how “they’re able to beards” who could draw on their members, and the project executives really step in and quickly analyze wealth of experience from the Shuttle clarified that due to this partnership- the materials” in order to “help us and even Apollo programs. This type relationship, the commercial through the process of developing expertise allowed these engineers partners had the option of not the weld repair process and the to transmit key lessons learned to following CAT inputs, except those inspection process that assures us the commercial partners, relaying related to safety. In practice, very that the engines are going to be what had and had not worked well rarely were CAT recommendations not flightworthy.”206 Said SpaceX Mission historically at NASA. followed, and then only with a viable Manager Peter Capozzoli, “NASA alternative approach. was very willing and very open to lend The project executives reported their expertise wherever we asked, having to “coach” the CAT members A few early CAT members had and often offered up places where early in the program, reminding difficulty accepting the COTS they thought they could help.”207 them that COTS worked differently approach and were not invited to than previous NASA programs they future technical reviews. However, CAT members were assigned to had supported.208 Horkachuck and the many who provided support support both commercial partners Manners specifically explained that throughout the program provided equally; no CAT members supported under the Space Act Agreements, an element of continuity, as the one partner exclusively, allowing NASA CATs would be asked to offer their commercial partners became to be somewhat consistent in the best technical advice, rather than comfortable with and trusted the advice provided. Because the majority certifying that a design adhered advice of individual CAT members. of company data was considered verbatim to NASA requirements and

CHAPTER 4 – PROGRAM 43 After the successful test flight of the Antares rocket, Orbital Senior Vice President of Antares Michael R. “Mike” Pinkston noted, “I heard nothing but rave reviews of the independent verification that was done on our guidance and control system that NASA had provided. It really bolstered our confidence going in, and I think the results bore out just how critical that help was to us, in terms of getting it right the first time.”210

Program Integration Manager

While the project executives and their A proximity sensor named DragonEye, developed by SpaceX, underwent flight system deputies focused on working with trials on the Space Shuttle Endeavour during the STS-127 mission in July 2009. This Laser Imaging Detection and Ranging (LIDAR) sensor system provides three-dimensional images the partners, the C3PO Program based on the amount of time it takes for a single laser pulse from the sensor to reach Integration Manager, Dennis A. Stone, a target and bounce back. The successful demonstration provided range and bearing supported program operations that information needed to guide the Dragon spacecraft during future ISS resupply deliveries. transcended individual partnerships. The program integration function and events associated with the SAA Additionally, Booz Allen supported covered a spectrum of activities milestones. For example, the support C3PO efforts to communicate including quality system compliance, contractor recommended using activities to NASA Headquarters external relations, website NASA Support Plans to provide the and the public, provided content management, unfunded partner SAA necessary timeline and documentation recommendations to baseline negotiations, planning, and support for each design review. These performance review charts, budget contractor oversight. documents outlined the purpose of reports, facility usage charts, etc., the review and detailed the roles and which went to the Center or NASA Contractor Support responsibilities for those involved. Headquarters. Also recommended were updates to ensure the C3PO C3PO identified the need for a As an example of its other website content was current. small amount of technical support, contributions, Booz Allen especially with the surge of activity recommended inputs to the SpaceX ARES Corp. provided detailed predicted during the major milestone DragonEye Detailed Test Objective schedule analysis and predictions of reviews. For the majority of the (DTO) I & II Project Requirements and most likely launch dates. This was program, two to three full-time Booz Verification Document. The DTOs important to help NASA plan realistic Allen Hamilton support contractor tested the relative navigation solution support for the program, and proved engineers worked with the COTS for maneuvering a cargo vehicle into useful in independent reviews of the team through the Advanced Planning position to be grappled by the ISS program and for answering questions Assessment Contract. and berthed to the Station. from officials at NASA Headquarters. Since ISS integration constituted ARES support was most notable They designed processes that enabled a major component of the COTS when the first significant slips in C3PO to have insight into the progress program, Booz Allen also evaluated milestones needed to be evaluated of the commercial partners’ space ISS change requests for impacts to and recommendations made to NASA transportation systems. Main efforts C3PO and the commercial partners. Headquarters on whether or not to focused on evaluating partner products continue the program.

44 CHAPTER 4 – PROGRAM and non-government markets. This allowed Lindenmoyer, the project Operations typically involved communicating executives, NASA Headquarters, with these sectors about COTS and and ISS representatives to meet Over its eight-year history, the NASA’s plan to buy cargo services with commercial partner executives Commercial Crew & Cargo Program to ISS. Dennis Stone gave special and gain insight into the companies’ Office instituted a new way of doing attention to developing the market progress. The results were business with the private sector. In for microgravity services, which could summarized in quarterly reviews by addition to the use of milestone- open new demand for COTS partner C3PO with ESMD management. based funded Space Act Agreements vehicles as free fliers. and a focus on commercial viability, COTS Program Executive Marc G. the COTS program pursued a COTS team members also spoke at Timm at NASA Headquarters served unique approach in other aspects various aerospace forums, including as the program’s conduit to other of its operations. The use of a small, the annual American Institute of federal entities. These included “skunk works”-type team facilitated Aeronautics and Astronautics Congressional offices, the Office communications. The process of (AIAA) Space Conference, as well of Management and Budget, and milestone assessment allowed as commercial space events such the White House. Said Timm, “The NASA to verify completion of partner as the Space Frontier Foundation’s program wasn’t set up to have a progress (necessary for the companies annual NewSpace conference, large contingent of folks to do that to receive payment) without undue and the annual Federal Aviation interfacing, so we purposely put oversight and interference. Administration (FAA) Commercial together the processes that would Space Transportation conference. allow us to accomplish this with a very small number of people.”211 Communications Although C3PO was small, it He added he talked often with had reporting obligations to C3PO aimed to maintain open Lindenmoyer and worked closely with both the NASA Johnson Space lines of communication with COTS public affairs, legal, and legislative and Center and NASA Headquarters. team members at JSC and NASA intergovernmental affairs offices at Scheduled quarterly meetings Headquarters (including legal and NASA Headquarters. procurement), the general NASA community, NASA’s current and potential industry partners, and the public. C3PO made a concerted effort, especially in the early days of COTS, to share the program’s approach with the aerospace community. The team understood that the COTS philosophy was different from how industry had previously worked with the government, and would require a proactive effort to achieve widespread understanding of how NASA planned to foster the commercial space transportation industry.

The C3PO Program Integration

Manager worked on developing the NASA/Bill Stafford Credit: COTS ecosystem, those sectors on NASA’s Johnson Space Center in Houston hosted a media briefing in April 2012 to which COTS partners depended, preview the SpaceX demonstration mission to the International Space Station. Pictured are (left to right), briefing moderator ; William Gerstenmaier, NASA Associate such as investors, regulators, insurers, Administrator for Human Exploration and Operations; Mike Suffredini, Manager, International Space Station Program; Alan Lindenmoyer, Manager, Commercial Crew & Cargo Program; and , SpaceX Chief Executive Officer and Chief Designer.

CHAPTER 4 – PROGRAM 45 Proprietary Data contractors, to sign a non-disclosure actual event. Some criteria, such agreement and maintain proprietary as engine firings, were fairly easy A critical component of the COTS data in restricted online libraries. to monitor and verify. Other criteria team’s communication plan was required a degree of discussion and to ensure they did not share the Under traditional NASA contracts, the negotiation between the COTS team proprietary technical information that government typically owns the data and their industry partners. belonged to the commercial partners. and can use it for other programs. Everyone working on the COTS The major technical reviews—System Although a traditional NASA contract program understood they were Requirements, Preliminary Design, may have some company data which allowed to use the partner data only Critical Design, and Demonstration the space agency must protect, for COTS support. In one case, CAT Readiness—required the most NASA in COTS nearly all the commercial members at the Marshall Space Flight and COTS Advisory Team support, partners’ data was considered Center supporting Orbital’s Antares being the most complex of the proprietary. The SAAs strictly rocket engines were evaluating use various SAA milestones. The criteria precluded NASA from sharing partner of the same Aerojet engines on for these reviews were tailored after data, even with NASA personnel, another project. Bruce Manners, the the NASA Procedural Requirements unless they were directly involved in NASA Project Executive for Orbital, document NPR-7123, NASA’s reviewing partner milestones. C3PO’s described how C3PO had to be “rigid standard for Systems Engineering rigorous approach to protecting the and specific” to ensure that the data Processes. The partners and the companies’ data included requiring and knowledge acquired under COTS project executives agreed on the all personnel who worked on the was not applied to other efforts.212 details and logistics of the engineering project, from NASA civil servants to reviews, and the overall process Milestone Assessment evolved as COTS progressed. While no two engineering reviews The COTS Space Act Agreements followed exactly the same steps from outlined a series of technical and start to finish, all utilized a similar financial milestones to be completed process. After C3PO determined as part of the commercial partners’ the amount of support needed for development and demonstration a particular review, COTS Advisory programs. Technical milestones Team members were recruited. typically consisted of major engineering reviews, engine tests, Early in the COTS program, ISS hardware delivery, and demonstration support was fairly limited, but launches. After the COTS budget became more intense as commercial was augmented in fiscal year 2011, partners approached the engineering some extra technical milestones for milestones to prepare for their ISS SpaceX and Orbital were added to the demonstration missions. The ISS SAAs, mainly for additional hardware Transportation Integration Office and engine tests to reduce risk and coordinated the ISS support from enhance safety. its office and worked with C3PO

Credit: SpaceX/Roger Gilbertson Credit: throughout those reviews. As one of its COTS milestones, SpaceX The language of the SAAs was conducted a series of high-altitude drop intentionally written in broad The partners organized documents tests in August 2010 to validate parachute terms with respect to milestone deployment systems and recovery into relevant subsystems and created reviews. C3PO anticipated that the operations. An Erikson S-64F Air-Crane suggested reading lists for the helicopter dropped a test article of the commercial partners’ development CAT subsystem teams due to the Dragon spacecraft from a height of programs would evolve, and with large amounts of documents and 14,000 feet, roughly 9 miles off the coast the aggressive COTS development overlapping subsystems. An easy-to- of Morro Bay, California. schedules, the details of milestone use Review Item Discrepancy (RID) verification were settled closer to the

46 CHAPTER 4 – PROGRAM form, once completed by the teams, was merged into one spreadsheet for efficient sort, review, and prioritization.

Typically reviewers had two to three weeks to submit RIDs. Then the support contractor facilitated a RID screening session, filtering on occasion up to 600 items. The screening sessions, sometimes two days or longer, would filter out RIDs that were out of scope for the COTS program, clarify the intent of poorly NASA utilized a number of its assets used during the to help in worded RIDs, and combine multiple performance assessment of the SpaceX C2+ mission in May 2012. The two Solid Rocket Booster Retrieval Ships, Freedom and Star, both carried an X-band diagnostic RIDs to try to minimize the workload radar system that detects and quantifies in-flight launch vehicle behavior and any generated on the commercial partner. Only debris. Also on board the Freedom Star was the MARS high-powered, sea-stabilized after the NASA project executive tracking camera system that monitored the separation of the Dragon spacecraft from the had approved the RIDS were they Falcon 9 launch vehicle. These ships and diagnostic radar systems also helped to observe submitted to the commercial partner. the Falcon 9 maiden flight in June 2010 and the SpaceX C1 mission in December 2010. This process ensured consistency, and prevented the partners from all the subsystems, and key forward aspects of these reviews were still being overwhelmed by NASA inputs. work. Open RIDs were discussed, high-value added when preparing to along with plans for closure. The most launch a rocket into space. Partners addressed the approved significant technical RIDs identified RIDs by providing additional through the screening process were Reviewing qualification reports and information or analysis and also presented, even if they were acceptance test reports for lingering worked with RID submitters to closed satisfactorily. This provided anomalies in hardware performance ensure concerns were adequately NASA and partner management allowed for a clear understanding of addressed. C3PO monitored this with insight into the most significant the design baseline and the as-built process and became involved with findings of the review. vehicle configuration. CAT members closing out RIDs as necessary. This were assigned test reports and RID process became such a reliable Unlike some reviews of previous large- analyses to review, and the RID form staple that both the ISS Commercial scale NASA programs that routinely was modified to inform the project Resupply Services contract team spanned several months, the COTS executives that the data had been and Commercial Crew Program at milestone reviews spanned anywhere reviewed and was satisfactory for the requested from a few weeks to a maximum of flight. This helped the partner confirm to use the form.213 just over two months. These thorough that all the hardware was ready for the yet efficient reviews reflected the intended mission, and was also a key Milestone Review Boards overall COTS operating style. point communicated to Headquarters The Milestone Review Boards officials at the prelaunch briefing and occurred at the partners’ respective Demonstration Flights mission overview. headquarters, attended by C3PO, ISS The Demonstration Readiness Review representatives, NASA Headquarters was originally derived from the After the Demonstration Readiness officials, and a representative from established NASA procedure for a Test Review (the final technical review) the Federal Aviation Administration. Readiness Review, but also needed and before the demonstration flight, The commercial partner chaired the to encompass much of what is additional work was needed in several board. During the meeting, in addition known as an Acceptance Review and areas. Multiple mission simulations to demonstrating completion of the Certification Review for hardware that occurred between the partners milestone, the company presented NASA would have taken ownership of and NASA Missions Operations, information on the mission, a status of in a traditional contract. C3PO found emphasizing key elements of the

CHAPTER 4 – PROGRAM 47 Credit: C3PO team Credit: (Left) During both Orbital Sciences Corp. missions, NASA used its ground KTM (kineto tracking mount) cameras previously used for the Space Shuttle Program. These were deployed from the Kennedy Space Center in Florida to Wallops Island, Virginia, to monitor the launch and early ascent phase of the Antares vehicle in April and December 2013. These camera systems also helped to observe the SpaceX missions—Falcon 9 maiden flight in June 2010, C1 mission in December 2010, and C2+ mission in May 2012. (Right) NASA utilized the U.S. Navy vessel NAWC-38 to carry an X-band diagnostic radar system that detects and quantifies in-flight launch vehicle behavior and any generated debris during both launches of the Antares rocket, built by Orbital Sciences Corp.

rendezvous and berthing to ISS. Similarly, prior to the Orbital Antares review the flight data and determine The project executives took rocket test flight, C3PO “scrounged if any additional analysis was preparatory steps necessary to unique devices” from around NASA to recommended. Only after all the data monitor mission success. help make the mission a success.215 had been thoroughly reviewed could These included instruments to the partner receive payment for a In the case of the first flight of the measure the rocket’s acoustic successfully completed milestone. SpaceX Falcon 9 rocket, Project environment, as well as high-speed Executive Mike Horkachuck described tracking cameras that would provide Although the same method was how he and Assistant Project insight into any potential accidents. applied throughout the COTS Executive Warren Ruemmele “scoured program, the circumstances of each the Agency” to locate assets that Prior to the demonstration missions, of the commercial partners’ respective could contribute additional insight all the key stakeholders, including development program varied into the vehicle’s launch and reentry C3PO, the ISS Program Office, according to the company’s unique performance.214 The launch team and the FAA met at the respective history, technology, and approach. was able to use radar originally partner’s launch facility for a Mission Each of the three companies that deployed to look for falling foam Readiness Review to ensure all parties C3PO partnered with is profiled in during the Shuttle launches following were ready for launch and that no the following chapter. the Columbia accident. In addition, open issues remained. the Shuttle solid rocket booster retrieval ships helped monitor the Shortly after the mission was SpaceX mission from sea. These completed, the partners provided additional resources allowed NASA C3PO with a “quick look” report, to independently understand the showing how the mission performed launch staging events and solar array based on the data available. deployment, areas that historically are Several weeks later, after a more high risks to new vehicles. detailed report was produced, C3PO called on CAT experts to

48 CHAPTER 4 – PROGRAM Commercial Partners

Space Exploration Technologies Corp. Rocketplane Kistler Orbital Sciences Corp.

CHAPTER 5 – COMMERCIAL PARTNERS 49 chapter 5 The Commercial Crew & Cargo Program Office (C3PO) worked with three different commercial partners from 2006 through the COTS program’s completion in 2013: Space Exploration Technology Corp. (SpaceX) (from 2006 to 2012), Rocketplane Kistler (from 2006 to 2007), and Orbital Sciences Corp. (from 2008 to 2013).

Space Exploration Technologies Corp. SpaceX may be the most well- development of innovative, high- known of the three companies that risk technology ventures. Musk were awarded funded Space Act founded SpaceX in 2002 using Agreements under the Commercial his know-how and capital from a Orbital Transportation Services (COTS) previous venture, PayPal, the secure program. The technical triumphs online payment website.218 of the Dragon and Falcon 9 rocket received SpaceX’s explicit aim is “to extensive media coverage, as the revolutionize , company’s demonstration flight to the with the ultimate goal of enabling 219 International Space Station (ISS) in people to live on other planets.” May 2012 captured national attention, The company’s innovative approach encouraged by the company’s active to rocketry has allowed SpaceX to social media presence. achieve its near-term goals, as the company becomes increasingly SpaceX had already been working competitive with major industry on the Falcon rocket and concept players such as The Boeing Company for the Dragon spacecraft at the time and Lockheed Martin Corp.220 of the first COTS Announcement in January 2006, but NASA’s call to NASA Partnership partner with commercial companies provided additional incentive to Throughout the six years of its COTS formulate vehicle specifics and turn partnership with NASA, SpaceX 216 the concept into reality. relied on the indispensable expertise of C3PO and the COTS Advisory Company Philosophy Team (CAT), NASA Project Executive Michael J. “Mike” Horkachuck and SpaceX submitted a strong business Assistant Project Executive Warren plan in its proposal, and this was P. Ruemmele in particular. With among the reasons NASA selected the experience in Shuttle and ISS payload company as the first choice partner in integration, Horkachuck was well- the COTS Round 1 competition.217 poised to assist the SpaceX team on their quest to develop a vehicle Both SpaceX’s business and capable of berthing with the ISS and technological strengths stemmed providing critical resupply services. from its Silicon Valley-style operating philosophy, gleaned from founder, SpaceX personnel eventually came CEO, and Chief Designer Elon Musk to view the project executive not and his entrepreneurial experience as a NASA overseer, but as a vital in the area of California known for member of their team. Horkachuck

50 CHAPTER 5 – COMMERCIAL PARTNERS described how SpaceX came to trust sentiment: “The ‘us and them’ of cargo to the ISS per flight, at a his judgment, saying, “I had a lot more mentality disappeared once we got rate of eight flights per year.224 history than most of the employees ‘into the trenches,’ getting the work at SpaceX on what was going on done that both sides proposed to do. At the time of the COTS award, and how things worked. When they Then it was just an ‘us.’”223 SpaceX was still developing its Falcon first came in, they had the ‘I know it 1 rocket, named for the Millennium Falcon spacecraft commanded by Han all’ kind of attitude. It took a while for Vehicles them to learn that maybe they could Solo in the popular Star Wars film. The 221 numeral one designated the vehicle’s use some help in some areas.” SpaceX worked to develop the single Merlin engine. The two-stage, capabilities proposed in the Hans Koenigsmann, SpaceX Vice - and kerosene-fueled company’s COTS proposal, beginning President of Mission Assurance, said, rocket was 70 feet long, weighed with A, B, and C, i.e., pressurized “We realized we were going through 61,000 pounds, and was capable of and unpressurized cargo delivery this with NASA, and they go through delivering 78,000 pounds of thrust. and return services to and from the this with us. It’s a partnership, and After three failed attempts to reach ISS. Using the Falcon 9 rocket to we’re both in this. If we fail, they fail. orbit, the ’s first successful launch the capsule-shaped Dragon If they fail, we fail.”222 Tim Buzza, launch occurred on September 28, spacecraft into low-Earth orbit, the SpaceX Vice President of Launch 2008, from the remote island of SpaceX COTS proposal indicated it and Test, echoed Koenigsmann’s Kwajalein in the Marshall Islands.225 would be able to deliver 6,835 pounds Hans Koenigsmann, who had Liftoff of the inaugural SpaceX Falcon 9 launch vehicle occurred June 4, 2010, from the previously worked as the SpaceX Space Launch Complex 40 at Cape Canaveral Air Force Station, Florida. The 227-foot Vice President of Guidance and rocket with 9 SpaceX Merlin engines carried a boilerplate of the Dragon spacecraft in Control, described the first launch preparation for the upcoming NASA COTS demonstration mission. failure as “heartbreaking.” “A lot of people worked a long time,” he said, but “at the end, it didn’t fly very far.”

Credit: SpaceX Credit: However, Koenigsmann added, “We learned a lot of things we did wrong, and learning sometimes hurts.”226 Using the experience gained from the Falcon 1 development process, SpaceX was ready to progress to bigger and heavier rockets that relied on multiple Merlin engines.

On June 4, 2010, less than two years after the Falcon 1 launch, SpaceX successfully launched the 227 foot Falcon 9 rocket (with 9 Merlin engines), capable of generating 1,125,000 pounds of thrust at sea level, and 1,250,000 pounds of thrust in the vacuum of space.227 Due to the expense and logistics of transporting people and materials to the Pacific, by this launch SpaceX had moved its operations from Kwajalein to Cape Canaveral in Florida. Koenigsmann explained that this way SpaceX would also be close to the company’s NASA customer.228

CHAPTER 5 – COMMERCIAL PARTNERS 51 innovation. For example, the statement that “generally disruptive innovations were technologically straightforward, consisting of off- the-shelf components put together in a product architecture that was often simpler than prior approaches,” describes the company well, despite the fact that the book was published years before SpaceX was founded.231

SpaceX made widespread use of off-the-shelf hardware in developing its first launch vehicle, the Falcon 1 rocket. Engineers found these readily-available components to be significantly cheaper and equally reliable as space-specific hardware. As reported by Fast Company in 2005, the SpaceX Falcon 1 would use an Ethernet bus for communication between the rocket’s Credit: SpaceX/Chris Thompson Credit: The second flight of the Falcon 9 on December 8, 2010, met the objectives for the C1 different computers. “I didn’t want demonstration milestone of the company’s COTS Space Act Agreement, and established to invent anything new,” explained SpaceX as the first commercial company in U.S. history to return a spacecraft from Hans Koenigsmann.232 Earth’s orbit. The mission tested the Dragon’s ability to be launched, maneuver in orbit, reenter, and be recovered. Other examples included components of avionics equipment such as On its second flight on December 8, Musk reputedly named the spacecraft and a readily- 2010, the C1 demonstration mission of after the 1963 song “Puff, the Magic available airbag from Musk’s electric the company’s Space Act Agreement, Dragon,” in response to critics’ venture, Tesla Motors, Inc. For the Falcon 9 carried the first SpaceX skepticism that the the crewed variant of the Dragon Dragon spacecraft to orbit, after which would be able to achieve its goals. spacecraft, SpaceX utilized a modified it successfully reentered, splashed The company also displayed a sense bathroom stall latch for securing down, and was recovered. of humor with the C1 mission’s “top cargo lockers and NASCAR five- secret” payload of a wheel of cheese, point harness restraint seatbelts for Dragon features a recoverable in reference to a Monty Python astronauts—both off-the-shelf items capsule and disposable “trunk” for comedy skit.230 that cost significantly less to purchase unpressurized cargo. In total, the and were more comfortable for crew vehicle is capable of ferrying 13,228 use than their much more expensive pounds of upmass and 6,614 pounds Off-the-Shelf space-rated counterparts.233 of downmass to and from low-Earth SpaceX developed its technologies orbit. The spacecraft propels itself in using a business model that fits Small Organization space with the use of 12 to 18 Draco many of the observations on thruster engines, and relies on a disruptive technology found in The SpaceX was also able to pursue PICA (Phenolic Impregnated Carbon Innovator’s Dilemma, the book innovation by virtue of its small Ablator) thermal protection system to that venture capitalist Alan Marty organization. With less than 100 protect the capsule during reentry to recommended to the C3PO team employees at the time of the COTS Earth’s atmosphere.229 to help them understand how large award in 2006, communication organizations can nurture internal flowed easily between team

52 CHAPTER 5 – COMMERCIAL PARTNERS members.234 John Couluris, Senior In addition to their work, teams spent Director of Launch and Mission much of their limited off-time in close Operations at SpaceX, described how proximity as they commuted between employees were trusted to execute islands and, for lack of many other their jobs without disproportionate activities or distractions, fishing and oversight, thus streamlining the diving together.236 development of new designs and 235 hardware. Issues were easily Design and resolved with a simple face-to-face Manufacturing conversation, and design changes could be quickly communicated to Project Executive Mike Horkachuck colleagues in manufacturing. observed that in contrast to traditional NASA methods of development in This was even more true in 2008, SpaceX/Roger Gilbertson Credit: which a vehicle is designed to optimal when SpaceX moved from a group of SpaceX worked closely with NASA’s Ames levels of performance before assembly Research Center to develop PICA-X, separate buildings and facilities in El and testing, SpaceX built some a SpaceX variant of NASA’s Phenolic Segundo, California, to a large factory additional margin and “robustness” Impregnated Carbon Ablator (PICA) heat in the neighboring south Los Angeles shield. Under a reimbursable Space Act into its design from the beginning. suburb of Hawthorne on Rocket Agreement, NASA made its expertise and Then, vehicles could be more easily Road, where development and specialized facilities available to SpaceX altered and optimized after tests as the company designed, developed, and manufacturing could be completed provided demonstrable measures of qualified the . Dragon’s PICA-X under one roof—a roof that used to their performance.237 protected the spacecraft during reentry. cover Boeing operations, and before that served as the original home of SpaceX also stuck closely to its SpaceX also made a point of using The Northrop Corp. formed in 1939. philosophy of pursuing a thorough test American companies as suppliers program. The company conducted This sense of close camaraderie whenever possible—in contrast to its a test of every Merlin engine at its sometimes extended beyond work competitor Orbital, which preferred rural McGregor, Texas, facility (an hours. While on Kwajalein, employees an international collaboration. existing test pad purchased from also benefited from days and weeks defunct ) as close to One of the most prominent examples spent together in the Marshall Islands. flight conditions as possible. Using of the company’s manufacturing reimbursable Space Act Agreements, capability is PICA-X, SpaceX’s Technicians inside a processing hangar in which SpaceX paid NASA for its version of the heat shield material at Cape Canaveral Air Force Station, Florida, guide the SpaceX Dragon as it is services, the company also relied on developed in cooperation with lifted atop its cargo ring. The spacecraft NASA facilities such as the Marshall NASA Ames Research Center. is designed to carry both pressurized and Space Flight Center in Huntsville, (Ames developed and patented the unpressurized cargo to the ISS and safely Alabama, for services like wind tunnel original PICA material in the 1990s.) return cargo to the Earth. testing of the Falcon 9 first stage.238 By developing its own material for Dragon’s thermal protection As SpaceX matured as a company system, SpaceX also avoided the over the course of its partnership risk of potential price manipulation with NASA, it also increasingly that can result from reliance on a shifted to manufacturing more of its single-source supplier.239 In fact, Credit: NASA/Kim Shiflett Credit: own components in-house at the during the COTS competition, NASA Hawthorne facility. In many cases identified the company’s in-house this strategy helped the company capabilities as a major strength of the deliver the same or better quality company’s proposal, as they allowed while saving money, particularly for “improved project control and when vendors charged prices simplified interfaces/integration.”240 the company deemed too high.

CHAPTER 5 – COMMERCIAL PARTNERS 53 SpaceX executed the 40 total Technical Milestones milestones of its Space Act Agreement Paper-based milestones (System between August 18, 2006 (the date Requirements Reviews, Preliminary NASA signed the agreement) to Design Reviews, Critical Design May 2012, when SpaceX successfully Reviews, and Demonstrated completed the objectives of the Readiness Reviews) and other company’s final COTS mission technical milestones (for example to berth with the International engine tests and a cargo integration Space Station. That August, NASA demonstration) took place as completed its verification that this intermediate steps to the three primary milestone’s objectives had been met. COTS demonstration missions.

Financial Milestones The C1 mission on December 8, By March 2009, SpaceX had 2010, tested the Dragon’s ability to be completed the three financial launched, maneuver in orbit, reenter, milestones that proved the company and be recovered. Moments after the could contribute its promised share SpaceX C1 demonstration mission Credit: SpaceX Credit: of the funding needed to finish lifted off the pad, members of C3PO SpaceX conducts rigorous tests on its engines at its McGregor, Texas, rocket- development of the Falcon 9 and monitoring from the partner launch development and test facility that originally Dragon vehicles. NASA placed control center in Florida leapt from had been developed by Beal Aerospace. these financial markers early in their seats to run outside and watch SpaceX refitted the largest test stand for the program to allow the space the rocket clear the tree line, lifting into the full Falcon 9 engine firing (pictured agency to exit the agreement orbit. After two and a successful above). Also at this location are new test stands, a vacuum chamber to test the early, should it become necessary, , the engineers gave each Draco thrusters, and buildings where before expending excessive monies other thunderous high fives—with a employees de-fuel and clean up the on an unsuccessful development few receiving a champagne shower.244 flown Dragon spacecraft and potentially program. In addition to his own refurbish it for reuse. resources, Musk was able to turn NASA also deployed its Shuttle- to his network of colleagues in launch debris radar and Shuttle solid Milestones Silicon Valley to lead the subsequent rocket booster retrieval ship assets rounds of financing that made it to observe the reentry of the SpaceX In August of 2006 NASA awarded possible to forge ahead with the C1 capsule, the first U.S. commercial SpaceX its COTS Space Act COTS agreement.242 vehicle to reenter from space. This Agreement worth $278 million, to and the parachute deployment were be paid in increments upon successful However, SpaceX did experience some of the most critical aspects milestone completion, to develop financial struggles. Looking back, of the SpaceX C1 mission. These the capability to deliver and return President Gwynne E. Shotwell assets also would have provided cargo to and from low-Earth orbit.241 described her biggest challenge as invaluable information in the case of Musk had always envisioned a system seeking investors and convincing an in-flight anomaly.245 capable of transporting humans— potential customers to purchase not only cargo—across the solar launch services before SpaceX was The next milestone mission, C2, would system, but the first step was ferrying able to demonstrate the capabilities comprise a Dragon launch and flyby of supplies to the ISS (though the of the Falcon vehicles. “I was focused the ISS, while C3, the final milestone, vehicles were designed for robustness on keeping the company alive, would complete the berthing and from the beginning, with an eventual keeping people paid while we were cargo delivery demonstration. human rating in mind). Human struggling and getting through it,” Schedule Slips transportation to low-Earth orbit, Shotwell said.243 COTS Capability D, was included as SpaceX’s original schedule proposed an option in the SpaceX SAA (one that to complete all milestones by NASA never exercised). September 2009. As the milestones

54 CHAPTER 5 – COMMERCIAL PARTNERS transitioned from more paper-based $300 million to the Commercial Crew Flexibility benchmarks—i.e., financing rounds & Cargo Program Office, allowing and design reviews—to the building $118 million in supplementary As with any rocket development of physical hardware, milestone funds to be given to each of the program, unforeseen issues and completion began to slip behind the commercial partners. deviations from original projections original, very aggressive schedule. were bound to occur. Some of Eventually schedule slips resulted in Eighteen milestones were added to the these changes were suggested by a cumulative delay of approximately SpaceX Space Act Agreement, which NASA, based on its experience and two and a half years, and the final concentrated on seven main tasks lessons learned from past programs, demonstration mission originally specifically targeted to risk reduction: while others SpaceX proposed in planned for September 2009 did not a pressurized cargo environment order to achieve greater efficiency occur until May 2012. modal test; Light Detection and and accelerate development. Ranging (LIDAR) sensors testing; solar Regardless of which party proposed According to Horkachuck, as these array deployment tests; a spacecraft the changes, both partners were milestones began to slip, SpaceX thermal vacuum system test; willing to work towards for the best became fearful that NASA would infrastructure enhancements (launch, possible solution. terminate the company’s Space Act test and production sites); acoustic Agreement. Article 17B of the SAA and electromagnetic interference For example, after the development did allow for “Termination for Failure (EMI) tests; and enhanced powered of Falcon 1, SpaceX originally planned to Perform,” but did not specify cargo accommodations.248 the Falcon 5 as an intermediate step to the consequences in the case of a launch vehicle with more capability. schedule delays.246 However, C3PO According to Shotwell, several of However, as a result of NASA’s ISS determined that as long as SpaceX these, such as the thermal vacuum cargo needs, SpaceX decided to was making technical progress and and EMI testing, were tests that pursue the Falcon 9, with nine Merlin had a sound plan to continue in the SpaceX had proposed as part of the engines.250 In addition to hardware, face of delays, there was no need to original agreement but were removed NASA also influenced some of the end the partnership. after negotiations because cost company’s processes and procedures. exceeded the available NASA funds Horkachuck influenced SpaceX team Both SpaceX and NASA knew at the under the original COTS $500 million members to place greater emphasis time the Space Act Agreements were budget allocation.249 on building integrated schedules as signed that the company’s schedule was aggressive and pushed the time limits of what it was possible to achieve in rocket science. According to C3PO Manager Alan J. Lindenmoyer, “The average time to field a new launch vehicle is at least 27 months longer than initially projected.” Lindenmoyer observed “that’s almost exactly the delay that SpaceX experienced from the predicted original launch date of the first demonstration flight to the actual.”247 Therefore, NASA expected these slips from the beginning.

Augmentation Milestones Partially as a result of these delays, and to increase mission safety SpaceX Credit: Prior to its inaugural launch, the Falcon 9 rocket undergoes its final integration in the and assurance, in fiscal year 2011 hangar at SpaceX’s Cape Canaveral launch site in Florida. Components include: Dragon Congress appropriated an additional spacecraft qualification unit (left), second stage with Merlin vacuum engine (center), first stage with nine Merlin 1C engines (right).

CHAPTER 5 – COMMERCIAL PARTNERS 55 schedule, and allowed it to learn signal to bounce back. A similar test of more about how to build and verify the Dragon LIDAR system took place hardware to the standards and two years later on STS-133, the final requirements of ISS. This included flight of Space ShuttleDiscovery .255 an introduction to the Safety Review According to Warren P. Ruemmele, Panel process before the first full NASA Assistant Project Executive demonstration mission.252 for SpaceX, these tests “allowed SpaceX to perform the best possible Based on his experiences with past in-space test of the … LIDAR they programs, Horkachuck was also able would eventually use” on the final to intercede when SpaceX moved demonstration mission to Station.256 to its new facility in Hawthorne. He noticed issues during the production NASA influences did not mean of the first few rockets and spacecraft SpaceX did not push back with its and “kind of forced some of [the own ideas of how to facilitate vehicle

Credit: C3PO team Credit: NASA] money to be spent on fixing development. Even in the matter of NASA C3PO team members toured the problems” in some of those areas.253 documentation, which employees company’s launch site before the first NASA also helped with an additional acknowledged as important, SpaceX SpaceX demonstration mission to the ISS friction stir welder, and some other more often relied on electronic and in May 2012. Attending were (left to right): Andrea Riley, NASA Headquarters Assistant production capabilities that would interactive procedures rather than Program Executive; Todd Hegemier, C3PO make a significant difference in hard copies.257 Financial Team; Lisa Price, C3PO Financial manufacturing processes. Team; Mark Timm, NASA Headquarters One of the major changes made as Program Executive; Alan Lindenmoyer, Another specific area of influence time progressed was the combination C3PO Manager; Alan Marty, C3PO Business was additional parachute drop of the C2 and C3 milestone missions. Advisor; Phil McAlister, NASA’s Director of Commercial Spaceflight Development; tests, in this particular case applying As C3 was essentially a continuation Dennis Stone, C3PO Integration Manager; some lessons learned from delays of the C2 mission, in 2010 SpaceX and Allison Zuniga, NASA Headquarters in NASA’s Orion Crew Exploration proposed to NASA that instead of Strategic Planning. Vehicle Program. Resources and conducting the demonstrations as lessons learned from the Space two separate missions and building a critical project management tool.251 Shuttle Program were also applied, two separate spacecraft, that after the Similarly, through its partnership as SpaceX utilized the NASA Shuttle C2 objectives were completed NASA with NASA, SpaceX began to put launch debris radar systems to study would allow SpaceX to complete the into place a more rigid and thorough the ascent phase of the Falcon 9.254 C3 objectives (of ISS grapple and documentation and configuration berthing) on the same mission. management process. SpaceX was also able to take advantage of two Space Shuttle flights NASA initially hesitated, viewing the Horkachuck strongly encouraged to test its rendezvous and proximity proposal as an attempt to eliminate SpaceX to develop its own operations systems. In July 2009, cost while taking on an unacceptable communications system with ISS, STS-127 launched with a DragonEye amount of risk, but eventually instead of relying on the existing Detailed Test Objective (DTO) box on acquiesced—with the provision Japan Aerospace Exploration Agency Endeavour’s Space Station docking that Dragon remain in space a few system. Horkachuck observed that system. As the Shuttle approached the additional days and perform some the SpaceX operating style was not ISS, the DTO tested the company’s system checkouts to allow for some compatible with the methodical way flash LIDAR sensor. As opposed to of the planned C2 mission time and of business that he noted was typical a traditional scanning LIDAR, the objectives. Negotiations lasted several of Japanese companies. The resulting system works by sending a single months, but in the summer of 2011 COTS UHF Communications Unit laser pulse to a target (as opposed to the Associate Administrator for the (CUCU) system gave SpaceX thousands of multiple pulses required Human Exploration and Operations control of its own development and by a scanning LIDAR system), and Directorate, William H. “Bill” measuring the time it takes for the Gerstenmaier, approved the change to

56 CHAPTER 5 – COMMERCIAL PARTNERS the company’s Space Act Agreement. $400 million for space exploration- A single C2+ mission allowed SpaceX related activities, of which $50 million to complete both the C2 and C3 was allocated to the CCDev project milestone objectives on a single flight administered by C3PO. (but with the understanding that the C3 mission could still be flown as a SpaceX made it through the first separate mission if SpaceX failed to round of eliminations, but when the achieve all the C2 objectives during Participant Evaluation Panel made the first attempt).258 its final decision in December 2009 it deemed that the company This amendment to the SAA asked too high a contribution from milestones demonstrated NASA’s NASA, and the proposal was not commitment to work with partners a good use of designated stimulus and negotiate, as opposed to funds for technology that would be imposing its will, traditions, and developed in return.261 procedures on the companies, and proving that the COTS team was truly C2+ Demonstration open to suggestions on how to make Mission this new way of doing business work. Partners were not only welcomed In the end, NASA’s partnership with but encouraged to push back on any SpaceX succeeded in producing U.S. requirements for requirements’ sake, cargo capability to low-Earth orbit. resulting in what all parties agreed After months of training with ISS NASA/Alan Ault Credit: was a more successful and cost- astronauts and a few launch delays to 259 effective mission overall. ensure issues such as flight software testing had been resolved, SpaceX Not Always a Winner launched the Dragon C2+ spacecraft from Cape Canaveral, Florida in the It should be mentioned that, despite early hours of the morning on 22 May SpaceX’s inarguable success, there 2012.262 The first three days of the were some NASA awards SpaceX mission were spent demonstrating did not win. After the SAA with RpK the objectives of the original C2 was terminated in October 2007, mission, establishing communications SpaceX was one of 13 companies to with the ISS using the COTS UHF submit a proposal for the remaining Communications Unit (CUCU) and $170 million of available COTS funds. conducting an ISS flyby.

However, SpaceX was eliminated in During the early morning hours of May 260 Then, on May 25, 2012, the NASA the first round of selection. 22, 2012, the SpaceX Falcon 9 launched Mission Control team in Houston from Cape Canaveral Air Force Station, SpaceX had a following opportunity granted Dragon permission to begin Florida (top photo), to begin the C2+ to receive additional funding from its approach toward the ISS. In demonstration mission, the final phase of the Commercial Crew & Cargo a tense moment just prior to the its COTS Space Act Agreement. On board was the Dragon spacecraft with more than Program when the Commercial Crew final approach for grapple, Dragon a thousand pounds of cargo to deliver to Development (CCDev) competition experienced an issue with its thermal the ISS. Following a series of tests of its was announced in August 2009 to imagers caused by a reflection from maneuverability and abort systems, the begin work on the capabilities that the Japanese Experiment Module, Dragon was grappled (bottom photo) and would be necessary for industry to resulting in a discrepancy between berthed to the International Space Station by the crew members of ISS . ferry people to and from low-Earth the LIDAR and thermal imagers. After 5 days, 16 hours, and 5 minutes, the orbit. The 2009 American Recovery Forging ahead without consistent Dragon was released. and Reinvestment Act allocated readings would have triggered a

CHAPTER 5 – COMMERCIAL PARTNERS 57 Over the six-year course of the company’s Space Act Agreement, NASA contributed both financial and technical assistance to the development of the SpaceX Falcon launch vehicle and Dragon spacecraft. However, as both C3PO Manager Alan Lindenmoyer and SpaceX President emphasized, the company’s financial contribution exceeded the government’s for the work performed under the COTS program. While the COTS office distributed a total of $396 million to the company (the original $278 million agreement plus $118 million

Credit: SpaceX Credit: in augmentation funds), SpaceX Employees outside the mission control room at SpaceX headquarters in Hawthorne, financed approximately $454 million, California, waited while the Dragon spacecraft successfully berthed with the International Space Station on May 25, 2012. Over its six-year COTS partnership with over half of the total amount, to make NASA, the company that was founded in 2002 transitioned from a small startup to the program a success.266 the first private company to deliver cargo to the ISS. NASA’s technical advice is less quantifiable, but the following NASA abort, so SpaceX mission that remained were formal reviews to statement by Tim Buzza gives control in Hawthorne ordered a retreat verify that all the mission objectives an indication of how closely the and quickly engineered a solution. had been achieved.264 government and private partner Software programmers narrowed the worked together: “There’s no doubt LIDAR’s field of view to eliminate the After the successful mission, SpaceX reflection, then uploaded the software began the transition from development change to Dragon, allowing the of the Dragon spacecraft and Falcon spacecraft to continue its approach 9 launch vehicle to manufacturing and NASA to give the final “go” and operations for contracted command for capture. flights. Development continued on projects such as a manned Dragon ISS Expedition 31 astronaut Donald spacecraft for the NASA Commercial R. Pettit grappled the spacecraft at Crew Program, and bigger and more 13:56 GMT, followed by a successful powerful rockets. These launch ISS berthing. Shotwell, who called the vehicles—including the Falcon 9 event “amazing” and “extraordinary,” version 1.1, , and celebrated with the close to 1,500 Grasshopper vertical vehicle— employees who had waited outside stemmed from the lineage of the the company’s mission control room original Falcon 1 launched on a remote at SpaceX headquarters during the island in the middle of the Pacific. early morning hours.263 After delivering That same heritage allowed SpaceX SpaceX/Michael Altenhofen Credit: On May 31, 2012, the capsule-shaped 1,014 pounds of cargo, Dragon to provide needed cargo to the ISS, Dragon splashed down in the Pacific unberthed from the ISS and splashed eventually graduating from less-critical Ocean west of Baja California, Mexico, down in the Pacific Ocean on May 31, supplies to scientific experiments less than one mile from the center of the 2012, signaling the completion of its carrying live animal specimens.265 targeted landing zone. SpaceX recovery teams retrieved the vehicle carrying cargo Space Act Agreement with NASA. All returned from the ISS.

58 CHAPTER 5 – COMMERCIAL PARTNERS would carry the second stage Rocketplane Orbital Vehicle (OV) to its trajectory in low-Earth orbit. The liquid Kistler oxygen/kerosene-fueled LAP would be powered by three Aerojet AJ-26 Rocketplane Kistler (RpK), the second engines (refurbished Russian commercial partner selected in the NK-33s)—the same engines used by Round 1 COTS competition, found Orbital in its Antares rocket.270 itself unable to execute the terms of its Space Act Agreement due to Kistler planned to launch the 113-foot the formidable challenge of securing tall K-1 vehicle from the Woomera Test the financing to fund a successful Range in a sparsely populated area of aerospace venture. South .271 After delivering its cargo to orbit, the LAP would return to Earth for rapid turnaround at the K-1 Vehicle company’s horizontal processing The Kistler Aerospace Corp. was facilities. The company’s 2006 COTS

Credit: NASA/Bill Ingalls Credit: founded in 1993, one of several proposal outlined how the OV could be On June 13, 2012, NASA Administrator aerospace startup companies configured to transport about 50,050 Charlie Bolden (left) and SpaceX CEO pounds of cargo per year or up to five and Chief Designer Elon Musk inspected established after the end of the Cold 272 the Dragon spacecraft that returned to War to lower the cost of launching crew members for Capability D. Earth and had been moved to the SpaceX small-sized satellites into low-Earth In addition to Mueller, Kistler boasted facility in Texas. After its 9-day test flight, orbit.269 In 1995, Dr. George E. the vehicle returned with nearly 1,400 an impressive executive team, Mueller, Director of NASA’s Apollo pounds of equipment and experiments with decades of combined NASA from the ISS. Program and an early champion of the Space Shuttle, joined Kistler that through years of working as the company’s CEO, and the together, fingerprints of meetings company began development of the and discussions with NASA have Kistler K-1 vehicle. ended up on the rocket.”267 The design for the K-1 had its roots in SpaceX has transitioned from a small the early concepts for a fully-reusable startup company to an increasingly space transportation system Mueller major contender in the aerospace had envisioned in the late 1960s. world in large part thanks to NASA’s However, due to budget cuts and partnership. After the C2+ mission, political maneuvering in the 1970s, the Elon Musk acknowledged what a Space Shuttle that NASA eventually “tremendous honor” it had been to developed was only partially reusable; work with NASA, saying, “We could the orbiter and solid rocket boosters not have started SpaceX, nor could were recovered and refurbished for we have reached this point without reuse, but the external tank was KAS Credit: Rocketplane Kistler planned to use the K-1 268 discarded after every mission. the help of NASA.” launch vehicle, in development since 1995, in its partnership with NASA. The fully The K-1 promised to convert the With the final demonstration mission, reusable vehicle had two stages with the SpaceX sealed its place in history dream of a fully reusable vehicle to second stage, the Orbital Vehicle (above), as the first ever private company reality, as both stages of the vehicle designed to transport cargo or crew. The to deliver cargo to the International would glide back to Earth using a company was unable to meet its financial system of parachutes and air bags. agreements, resulting in a termination of Space Station. their COTS Space Act Agreement. Operating in two stages, the K-1’s first stage Launch Assisted Platform (LAP)

CHAPTER 5 – COMMERCIAL PARTNERS 59 award until the K-1 vehicle flew a successful mission.277

Only two years later, on 15 July 2003 Kistler filed for Chapter 11 bankruptcy protection, unable to pay over $600 million in debt to the company’s creditors. Kistler turned to the hedge fund company Bay Harbour Management LLC to help the company out of debt. Bay Harbour became the majority owner of Kistler Aerospace, and was tasked with the job of raising the $450 million Kistler estimated it would

Credit: C3PO team Credit: need to complete the K-1 vehicle. Walter Kistler, left, cofounder of Kistler Aerospace and K-1 inventor, joined with members At the time, Kistler predicted it could of the COTS Participant Evaluation Panel for a presentation during the NASA due complete development of the K-1 diligence visit with Rocketplane Kistler as part of the 2006 COTS competition. within 13 to 18 months of receiving sufficient financing.278 experience in the Apollo, Shuttle, and decades of experience in the Apollo, Space Station programs. Randolph H. Space Shuttle, and Space Station Although NASA had cancelled the “Randy” Brinkley, Kistler’s President, programs, was Kistler’s Chief Engineer. Space Launch Initiative program served as the NASA Program Manager in 2002, in February 2004, NASA of the International Space Station from The Kistler Aerospace Corp. announced its intent to reactivate 1994 to 1999. Brinkley explained that originally aimed to develop the K-1 the previous award and offer Kistler one of his primary reasons for joining independently of any government a sole-source contract for pre- and the Kistler venture was to sustain the funding. In 1997, Kistler won a $100 post-flight data from the K-1 vehicle. ISS as a laboratory: “I had such strong million-plus contract to deliver 10 NASA justified the award of Kistler’s feelings about being able to make satellite launches for Space Systems/ no-bid award on the grounds that no the Space Station—the science Loral, “but the deal hinge[d] on other company had a vehicle as near platform that we spent $100 billion Kistler’s ability to finance and build its completion as the K-1. 276 on—to enable it. I saw that the K-1 planned K-1 rocket.” Years later, had that capability.”273 the company’s ability to attract and By 2004, Kistler had completed retain funding would linger as an issue 75 percent of the vehicle’s hardware, Joseph W. “Joe” Cuzzupoli served as for what was otherwise an advanced 85 percent of the design, and 100 Kistler’s Vice President and K-1 launch technical concept. percent of the software for guidance, vehicle Deputy Program Manager, navigation, and control. Presaging bringing to the table his years of Space Launch Initiative NASA’s future use of funded Space experience as Rockwell’s Assistant Act Agreements, NASA would Manager of the Apollo Program and At the turn of the , provide payments to Kistler only Vice President and Program Manager Kistler Aerospace increased its after data was delivered, and any 274 of the . COTS involvement in government programs. potential contracted ISS missions Project Executive Bruce Manners later In May 2001, NASA awarded Kistler would be subject to a separate 279 reflected that Cuzzupoli “had so much Aerospace one of 22 Space Launch follow-on procurement. experience, so many guidelines,” that Initiative contracts, designated However, a recent startup founded in “it was just a real career highlight to for small businesses, to study the 2002, SpaceX, protested the award at have the opportunity to meet and feasibility of commercial cargo the Government Accountability Office, work with somebody of his caliber transportation to the International 275 claiming that the contract should have and his background.” Rounding out Space Station. Kistler would only been subject to open competition the team, Richard H. “Dick” Kohrs, receive $10 million of its $135 million another former NASA manager with as per standard Federal Acquisition

60 CHAPTER 5 – COMMERCIAL PARTNERS Regulation procedures.280 SpaceX Technical Milestones won the protest, and after losing their Rocketplane Kistler easily achieved award Kistler again failed to raise the its first two technical milestones, the money it needed to complete the Program Implementation Plan and K-1 vehicle. The company was “put System Requirements Review.285 on the shelf” by Bay Harbour, still the Both were completed on schedule, majority owner.281 in September 2006 and February 2007 respectively. The RpK team COTS was technically proficient, well on the way to achieving their next technical In 2005, as interest in NASA’s new milestone, the Pressurized Cargo way of doing business began to Module Critical Design Review, circulate among commercial space except for the issue of financing. transportation companies, George D. French, the owner of Pioneer Financial Milestones Rocketplane, a suborbital space C3PO team Credit: The financial milestones presented C3PO Manager Alan Lindenmoyer tourism venture based in Oklahoma, more of a struggle for RpK. The approved payments to Rocketplane Kistler attended the COTS Industry Day in company required 30 additional days upon completion of technical milestones. Houston. French reported that he met to complete its first round of financing, Although technically proficient, the investment banker Petter Kleppan company failed to meet its financial $40 million originally due by the end commitments under the COTS Space Act at the bar of a local hotel, who of September 2006. Rocketplane Agreement with NASA. suggested that French buy the failing Kistler hired investment bank Jeffries 282 Kistler Aerospace Corp. Quarterdeck LLC to help it raise of financing, MacDonald, Dettwiler, the capital needed to complete In February 2006, French announced and Associates (MDA), brought in the development of the K-1 vehicle. the purchase of Kistler Aerospace, Ontario Teachers’ Pension Plan (OTPP) Jeffries Quarterdeck convinced RpK giving the new Rocketplane Kistler as a lead investor willing to contribute that all its funds should be secured Inc. about six weeks to pull together a over $200 million of financing. Having in one large lump sum, and in late team and prepare a COTS proposal for reached the significant landmark of February 2007, NASA amended the March 3, 2006 deadline.283 As one $300 million raised (the sum of the the RpK Space Act Agreement to of the company’s two speakers during existing $100 million plus $200 million accommodate this new plan. The the final selection briefings at NASA from OTPP), RpK continued its search original Milestone 4 ($120 million in Headquarters, Mueller presented to reach the full $500 million.287 financing due February 2007) and a strong case for the advanced Milestone 9 ($256 million in financing state of the K-1’s technological Throughout the process, the COTS due February 2008) were combined. development, and on August 18, team supported RpK’s endeavors. The consolidated Milestone 4 called 2006, NASA selected RpK as one Venture Capitalist Alan Marty and for $500 million of financing to be of two commercial partners in the Dennis A. Stone met with the RpK secured by May 2007.286 first round of the COTS competition, board at the company’s facilities though noting the weak point of the in Wisconsin and attended RpK Jeffries helped RpK prepare a 288 284 meetings on Wall Street. Project company’s financial plan. Confidential Information Memorandum Executive Bruce A. Manners about the company and its business and Program Manager Alan J. plan to show to interested lenders. Milestones Lindenmoyer also helped review RpK RpK went to New York City in April presentations and accompanied Despite the company’s impressive 2007 to find potential investors, RpK during their July 2007 “Investor technical credentials, Rocketplane particularly a lead investor that could Day” in New York. The NASA Kistler struggled to achieve the provide over $100 million of funds representatives helped demonstrate financial objectives defined in the and help monitor RpK’s progress for NASA’s commitment to the COTS company’s Space Act Agreement the other possible financiers. One of program, explaining to investors the with NASA. RpK’s investors from the first round Agency’s new way of doing business.

CHAPTER 5 – COMMERCIAL PARTNERS 61 Marty helped explain the investment final chance to meet its second travel was, investors’ focus was process and advise C3PO on which financial milestone.291 NASA decided ultimately on the bottom line.294 investors might be more willing to to end RpK’s association with the commit to a financial contribution. space agency only after a series of According to Brinkley, Rocketplane Attorney Jonathan A. Arena was intense discussions with RpK and Kistler was also unfortunate in the also present to ensure NASA did not the COTS team’s legal and financial timing of its appeals to investors. cross any legal or policy boundaries advisors, ultimately determining that To begin with, in April 2007 NASA by issuing a particular endorsement RpK did not have a viable chance of announced a $719 million extension of the company, and clarifying that raising the required funding.292 of the space agency’s contract participation in the COTS program with the Russian Federal Space was not a guarantee of a follow-on Associate Administrator for the Agency (Roscosmos) to provide service contract.289 Exploration Systems Mission crew and cargo services through Directorate Scott J. “Doc” Horowitz 2011, signaling to investors that Both Marty and Arena used their explained, “I basically used a three- NASA would not be relying on U.S. expertise to serve as liaisons between strike policy. They didn’t meet their commercial resupply services in financial, legal, and engineering groups milestones. We tried, now we’ll go the foreseeable future. Then, when in the NASA, commercial, and private on.”293 Horowitz issued NASA’s 30- the Space Operations Mission investment communities. Arena later day notice of termination to RpK on Directorate at NASA Headquarters in described how “one of my informal September 7, 2007, and on October Washington, DC, issued a Request roles throughout that COTS process 18, 2007, the company’s Space Act for Information in the summer of was being a translator, explaining Agreement was formally terminated. 2007 to gather information to help some of the legal aspects to the Only four days after the official plan for an eventual services contract, engineers, some of the business termination, NASA issued the COTS the ISS Program Office indicated aspects to the engineers, and trying to Round 2 Announcement to select a it planned to commit to only three be a go-between between folks who new commercial partner. servicing missions—resulting in have vastly different backgrounds.”290 a significantly smaller figure than Throughout the termination the billion-dollar-plus Commercial process, NASA remained in close Termination Resupply Services (CRS) contracts communication with Rocketplane that were actually awarded in Kistler. Correspondence between Despite these efforts, by May 2007 December 2008, and not one large Lindenmoyer and Brinkley reveals 295 Rocketplane Kistler still had not enough to convince investors. how RpK tried to argue the managed to attract all $500 million company’s case. From the company’s Next, after the July 4 Independence needed to complete the revised perspective, NASA’s failure to Day holiday, RpK encountered Milestone 4 of the company’s Space guarantee the follow-on Commercial difficulty contacting venture capitalists Act Agreement. NASA agreed to Resupply Services contract during on Wall Street, many of whom took an extension until July 2007, noting RpK’s search for funding was the summer vacations and were not fully that the company had identified a primary reason for the company’s available until September.296 RpK’s lead investor. However, by July RpK inability to find investors willing to search for investors also coincided had raised only $300 million, $200 commit money to the project. with the U.S. subprime mortgage million short of the amount needed crisis that began its deleterious effect for completion of the milestone that Without a defined NASA commitment on U.S. stock markets in the summer had originally been due two months to buy the company’s low-Earth of 2007. Said French, “Never in my prior. Without the financing needed to orbit transportation services, risk assessments did I put on my continue development, RpK began to financiers had no guarantee of a plate that the hedge funds…that slip on its technical progress. return on their investment. Investors’ were demanding a 15 percent return hesitance could also be explained In August 2007, Manners from us were investing in packaged by the long development time and recommended that NASA issue notice home mortgage loans to the tune of high risk inherent in space ventures; 297 of termination, giving Rocketplane billions of dollars.” After the markets with the dozens of proposals Kistler 30 more days to secure collapsed, the company was unable investors regularly sift through, as financing to allow the company one to resume talks with investors. exciting as the prospect of space

62 CHAPTER 5 – COMMERCIAL PARTNERS Credit: C3PO team Credit: NASA and Rocketplane Kistler (RpK) representatives discussed progress of the company’s milestones during a meeting held at the Michoud Assembly Facility, New Orleans, Louisiana. RpK used the facility to assemble and check out its K-1 Space Transportation System after entering into a reimbursable Space Act Agreement with the NASA Marshall Space Flight Center in Alabama.

Finally, also at issue was the fact was “real value in keeping that work assets were put up for auction, that two of Rocketplane Kistler’s that had been done, and that it was and purchased for $25,000 by the primary investors, MDA and OTPP, a shame to just have that become Wisconsin-based Space Assets LLC. were foreign-owned entities. Brinkley scrap,” especially after NASA had The company, still steered by French, explained in his correspondence invested so much government money has managed to salvage what is left with Horowitz that “[OTPP’s] in the K-1 development.299 of the hardware—some tanks and participation was limited, in part, by rings—and intellectual property to the fact that it is a Canadian fund Company owner George French was develop a new business plan.302 and NASA’s view that a Canadian able to transport some hardware fund could not have a controlling pieces to storage facilities in California Despite their termination, the position in RpK without violating the and Green Bay, Wisconsin, though engineers at Rocketplane Kistler Commercial Space Act [of 1998].”298 the majority were eventually scrapped. still believed in the COTS approach In his letter, Brinkley went on to point Regarding the intellectual property to partnering with industry. Said out the irony of NASA’s position in of the K-1 design, NASA still retains Cuzzupoli, “I would say that the COTS this case, since the Agency was the right under the terms specified in program has been a very successful dependent on foreign vehicles for ISS the Space Act Agreement to use any program, and that the whole concept resupply and crew transport. information RpK submitted as part of how this thing was going to be of any of the three milestone reviews put together and housed and the company completed. However, played out is a great idea. Cuzzupoli Epilogue there have been no attempts at the continued, “I think the NASA folks that space agency to exercise this right.300 are located at Johnson Space Center After the company’s termination, Rocketplane Kistler did attempt a have done a tremendous job.”303 Brinkley attempted to convince GAO protest of the Round 2 COTS His colleague Brinkley added, “I’m officials at NASA Headquarters to competition, but was unsuccessful. really happy and pleased to see the retain some of the valuable hardware success of SpaceX and the recent and intellectual property from the Rocketplane Global, the parent success of Orbital. At the end of the K-1 vehicle, as the company was no company of Rocketplane Kistler, filed day, although I’m disappointed about longer able to afford storage at the for Chapter 7 bankruptcy on June Rocketplane Kistler and the K-1, NASA Michoud Assembly Facility 301 15, 2010 (along with its owner). that’s secondary to the fact that COTS in New Orleans, Louisiana. Brinkley In December 2011, the company’s has been successful.”304 reported how he argued that there

CHAPTER 5 – COMMERCIAL PARTNERS 63 companies established in the pre- required by Orbital Challenger accident atmosphere many communications satellites.307 of optimism regarding the future of Sciences private space ventures. In the late The company secured approximately 1970s, Thompson, a former engineer $2 million from seed capital investors Corp. at the NASA Marshall Space Flight and venture capital sources in late Center, had decided to pursue a 1982 and early 1983. Orbital planned Based on the carefully established business degree based on his belief to raise “most of the capital to develop COTS strategy, in February 2008 the that a private company could develop and build the OTV, permitting NASA Commercial Crew & Cargo Program new systems more efficiently and cost to leverage its budget with private Office was able to resume plans for effectively than the government. investment and freeing space agency commercial low-Earth orbit delivery funds for other programs.”308 Although services with a new partner, Orbital While a student at Harvard Business in this instance Congress deemed the Sciences Corp. School, Thompson met Ferguson and program important enough to allocate Webster, two like-minded colleagues sufficient budget for NASA to run the who also shared an interest in initiative, the statement foreshadowed Company Founding aerospace. In April 1981—the same the work Orbital would complete and Early Years month as the first Space Shuttle under the COTS program a quarter of David W. Thompson, Bruce W. launch—the three participated on a a century later. Ferguson, and Scott L. Webster team that studied materials research By mid-1983, Orbital began founded the Orbital Sciences Corp. and manufacturing in low-Earth orbit development of the Transfer Orbit in 1982, one of several aerospace for the school’s Creative Marketing Strategy course. The work was Stage (TOS), a similar OTV concept funded by the Program Development designed to be a lower-cost Group at Marshall, interested alternative to the U.S. Air Force Inertial in potential commercial uses of Upper Stage. However, the Challenger Shuttle. After graduation, the former disaster of January 1986 forced the classmates stayed in contact, and on company to dramatically rethink its April 2, 1982, formally incorporated business plan to complement Shuttle the Orbital Sciences Corp.305 activities with privately-developed systems, especially after the policy Thompson described how there reversal of launching commercial were almost “no precedents” in the and military satellites on Shuttle. commercial space transportation Several of Orbital’s TOS production

Credit: NASA/Tom Tschida NASA/Tom Credit: arena to look to for guidance, but two contracts, close to completion, Orbital Sciences Corp. began working European initiatives founded in the were delayed or cancelled. By 1988 with NASA and the U.S. government in late 1970s and early 1980s—Orbital the company had shifted focus to the early 1980s and continued in the next Transport and Rockets, Inc. (OTRAG) a second product line of small and decades to develop small satellites as well as the rockets to launch them. Included in and —offered some relatively inexpensive satellites, and NASA projects was the unpiloted X-34, a proof it could be done.306 In the era the expendable rockets needed proposed low-cost reusable launch vehicle when the Shuttle was expected to to launch them.309 As one industry for space access. (Above) The first X-34 provide exclusive, frequent, low- observer phrased it, “the tragedy captive carry flight occurred June 29, 1999, cost access to space, Orbital’s initial freed space enterprise from the need using Orbital’s Lockheed L-101 as the 310 mothership, from the NASA Dryden Flight business plan proposed to support to move in lockstep” with NASA. Research Center, Edwards., California. NASA’s capabilities by developing In March 2001, NASA announced it was the Orbital Transfer Orbital based its new business plan discontinuing the X-34 program, but it Vehicle (OTV) that could be used on the company’s analysis that a served as a basis for further collaboration to ferry payloads from the Shuttle’s vehicle built expressly for the launch between NASA and the private entity. low-Earth orbit to the higher of small satellites could capture

64 CHAPTER 5 – COMMERCIAL PARTNERS this “lightsat” market by providing an alternative for small satellite customers flying their payloads as secondary cargo on the Shuttle or large-class rockets.311 The resulting air-launched Pegasus rocket completed its first mission in 1990.

Pegasus was launched from a B-52 aircraft, a plane featured in the famous Cold War movie Dr. Strangelove: Or, How I Learned to Stop Worrying and Love the Bomb. Pegasus’ primary architect, Antonio L. Elias, Orbital Vice President and Chief Technical Officer, later reflected on how Dr. Strangelove became the official film of the development team. Elias even posed for a photo on Pegasus imitating Major Kong’s rodeo-style descent on the H-bomb in the film. Since then Pegasus has become a mainstay of the company’s

business, having conducted 45 NASA/Bill Ingalls Credit: missions as of November 2013, while , NASA Deputy Administrator, and (left) David Thompson, CEO and President also spawning numerous derivative of Orbital Sciences Corporation, shared a conversation while in the Range Control Center at the NASA in Virginia prior to the first test flight of the products for space launch and missile Antares rocket. Also pictured are (middle) Antonio Elias, Orbital Sciences Corp. Executive 312 defense applications. Vice President and Chief Technical Officer, and Dale Nash, Executive Director, Virginia Commercial Space Flight Authority. Throughout the 1990s, Orbital continued to expand its product the company’s history NASA business deliveries on an as-needed basis. line to include a variety of small has accounted for anywhere from However, NASA elected not to pursue satellites and launch vehicles for 20 to 80 percent of Orbital’s total the concept because at the time communications, scientific, and revenue. As of 2013, Thompson Station’s needs could be fulfilled by defense payloads. These included reported the figure was about 40 Shuttle operations.313 the Taurus and rockets, percent, including COTS and CRS. as well as the satellite The space agency also continues to Orbital also participated in NASA’s communications network. Over the purchase Orbital’s launch services for Space Launch Initiative and Alternate first two decades of operations, its small scientific payloads. Access to Station studies, and the Orbital established a reputation as company developed a Demonstration a dependable company offering Always looking for new potential of Autonomous Rendezvous NASA, military, and private industry business, Vice President of Human Technology (DART) to prove on-orbit customers reliable and cost-effective Spaceflight Systems Richard T. capabilities.314 Although none of these access to space. “Bob” Richards described how, early initiatives reached fruition, they in the early 2000s, the company showed Orbital had already developed NASA Initiatives anticipated a need for contingency a number of ideas for cargo resupply NASA has been listed among Orbital’s cargo capability to ISS and by the time the COTS program was customers from the very beginning. developed the Orb Express concept announced in late 2005. According to Thompson, throughout to address potential emergency

CHAPTER 5 – COMMERCIAL PARTNERS 65 COTS

Orbital was among the 21 companies that submitted proposals in response to the Round 1 COTS Announcement issued January 18, 2006. The company proposed Capabilities A and B, unpressurized and pressurized cargo delivery, but was not selected into the group of six finalists, most of which had proposed all four capabilities. (SpaceDev, Inc. was the one exception, proposing only Capabilities C and D, pressurized cargo return and the possible crew option.) Credit: NASA/Brea Reeves NASA/Brea Credit: Orbital Sciences Corp. developed the Antares launch vehicle as part of its COTS Thompson, company President Space Act Agreement. Originally named the Taurus II, the 131-foot rocket is capable of and CEO, explained the decision lifting over 11,000 pounds to low-Earth orbit. This medium-class vehicle reflected the to pursue only the first two COTS company’s philosophy of relying on proven hardware components. capabilities: “We concluded that returning intact cargo was not likely Recognizing that COTS aimed to Taurus II was kept in the study to be a large part of the overall traffic develop U.S.-based capabilities, the phase until the spring of 2007, model, and the incremental cost of company changed its approach for when Orbital felt more confident implementing that was high enough the Round 2 competition. Orbital about potential markets and began that we probably wouldn’t see a deleted the Soyuz-derived spacecraft development work using internal good return on that incremental from its proposal, but included other funds. A ground-launched variant investment.”315 With limited potential international elements. The company of the Pegasus rocket, the small- returns on the return cargo capability, was selected, largely due to its stable class 104-foot Taurus XL weighed crew posed an even bigger financial finances, and signed its funded 170,000 pounds and was capable risk, though an option Thompson Space Act Agreement with NASA on of launching satellites weighing up indicated the company would be February 19, 2008. to 3,500 pounds.318 By contrast, open to pursuing in the future. the Taurus II (by then renamed Vehicles Antares) that Orbital successfully Many of the engineers who worked launched on April 21, 2013, was at Orbital believed their proposal Prior to the Round 1 COTS 131 feet tall, weighed 530,000 was not selected because it was competition in 2006, Orbital had pounds, and was capable of lifting overly reliant on foreign components, conducted some internal studies over 11,000 pounds to low-Earth particularly the use of a modified 319 regarding the development of a new orbit. By the time development Soyuz spacecraft for ISS cargo medium-class launch vehicle. The was complete, the vehicle had been delivery.316 After Rocketplane U.S. Air Force indicated it would no modified enough that the company Kistler’s Space Act Agreement was longer be purchasing services on felt it needed a new name to signify terminated in October 2007, and the II rocket built by Boeing the substantially different vehicle that NASA issued the Round 2 COTS Integrated Defense Systems, so had been produced. Announcement on October 22, Orbital conceived the Taurus II, 2007, Orbital saw another chance Not only was this medium-class based on the company’s existing to be awarded a funded Space Act vehicle appreciably larger than Taurus small launch vehicle, as a Agreement for the development of Orbital’s previous programs, it also possible replacement.317 low-Earth orbit capabilities. entailed significant design changes.

66 CHAPTER 5 – COMMERCIAL PARTNERS Whereas the company’s other rockets build this very similar module for and astronomy, Orbital named the utilized all solid propulsion stages, Orbital. Another European supplier, ISS visiting vehicle Cygnus, a swan Antares was the first Orbital vehicle to Dutch Space B.V., was brought in to that would fly to low-Earth orbit. use a liquid first stage. Orbital utilized construct, test, and integrate the solar 322 a liquid first stage developed by the arrays for the PCM. Company Philosophy Ukrainian design company Yuzhnoye, Orbital’s Round 2 COTS proposal manufactured by its sister company The vehicles’ technical capabilities asserted that the PCM would Yuzhmash. Other examples further reflected Orbital’s philosophy of relying be capable of ferrying 2.3 metric demonstrate how Orbital’s design on an international collaboration to tons (roughly 5,070 pounds) of approach leveraged proven hardware utilize proven hardware components. pressurized cargo, or 2 metric tons to the greatest extent possible. Frank DeMauro, Orbital’s COTS/CRS (4,409 pounds) of unpressurized Program Director, explained: “It’s a Orbital purchased Aerojet AJ-26 cargo to ISS. The Orbital capsule commercial venture, we’re on a fixed engines to power the first stage of was designed to dispose of return price, so we need to be able to do Antares. These units were in fact cargo as the vehicle disintegrated it in a cost-efficient way. We need to refurbished NK-33s that Aerojet had upon a controlled reentry to Earth’s have very low risk, obviously from a in turn purchased from Kuznetsov, the atmosphere.323 In keeping with the safety point of view, but also from a Russian company that manufactured company tradition of naming vehicles raw ability standpoint.”324 them in the 1960s and 1970s for the based on classical Greek mythology failed N-1 Soviet moon rocket. (These were the same engines Rocketplane Thales Alenia Space in , Italy, built the Cygnus cargo modules for Orbital Sciences Kistler had planned to use for its K-1 Corp., relying on its experience from building the Multi-Purpose Logistics Modules for system.) The second stage of Antares the ISS, as well as the European nodes of the International Space Station, to build this similar module for Orbital. The Italian company shipped the completed modules to the utilized a solid rocket motor from flight facility in Virginia. , Inc. (ATK) with Orbital avionics and integration.320

For the cargo delivery vehicle that Taurus II/Antares would launch into low-Earth orbit, Elias proposed a flexible concept capable of supporting multiple COTS capabilities. The “hockey puck” unit contained all the necessary propulsion, power, avionics, communications, and other operational systems.321 This could then be attached to either an Unpressurized Cargo Module (UPCM) or Pressurized Cargo Module (PCM), depending on NASA’s cargo needs.

Orbital turned to an Italian company, Thales Alenia Space, to build the PCMs that would berth to Station with the aid of the robotic . Thales Alenia was able to rely on its experience building ISS Multi-Purpose Logistics Modules, as well as the European nodes of the Station, to Credit: Thales Alenia Space Credit:

CHAPTER 5 – COMMERCIAL PARTNERS 67 Credit: Orbital Sciences Corp. Credit: Team members from Orbital Sciences Corp. autographed a section of the Cygnus mass simulator which later flew atop the Antares on its inaugural flight. Many of them are pictured above with this unique “flight article” along with several NASA officials who were at the company’s headquarters in Dulles, Virginia, for a milestone review. Those pictured include (center) C3PO manager Alan Lindenmoyer; and (to his left) Frank DeMauro, Orbital’s COTS/CRS Program Director; Jeff Siders, Director, Houston Operations; and Frank Culbertson, Executive Vice President and General Manager of Orbital’s Advanced Programs Group.

Orbital also built on the company’s which the company is then able to openness regarding the COTS experience using tried and tested adapt to new configurations based development process, with both subcontractor components on other on customer need. According NASA and the public. This included vehicles. Said Antares Deputy Project to Michael R. “Mike” Pinkston, a candid explanation of mission Director Kurt Eberly, “We tend to Senior Vice President for Antares, successes as well as failures. be in a systems integrator role,” “I don’t think there’s any substitute Frank L. Culbertson, former Space continuing, “We buy the parts, we for building that kind of historical, Shuttle astronaut and Executive know what the parts need to do. heritage-based understanding of what Vice President and General Manager We do the interfaces, we do the you’re applying,” adding, “It’s simply of Orbital’s Advanced Programs analytical work, the simulations.”325 adapting, and that’s really how we’ve Group, described how after a press All of the company’s rockets rely done business for years.”326 conference, members of the media on the same basic hardware and approached him and expressed software for functions such as Orbital engineers and officials their gratitude for the company’s guidance, navigation, and control, described how they always “quiet competence.”327 An already endeavored to pursue a policy of

68 CHAPTER 5 – COMMERCIAL PARTNERS established company with over three decades of experience, the company hosts press conferences for its major launch events.

NASA Partnership

Although the company used a different approach to develop its vehicles than SpaceX and Rocketplane Kistler, NASA’s Commercial Crew & Cargo Program Office still worked with Orbital as a partner, not a supervisor. Culbertson echoed Project Executive Bruce A. Manners’ statement that NASA had to allow the company to develop the vehicles based on what would be best for their future customers, not just for the space agency. A former NASA Program Manager, Culbertson said he appreciated the suggestions, but, “it’s our design, and we’ll make our own decisions … [to] decide what’s the safest, most efficient, and cost-effective approach.”328

Orbital did value NASA’s advice Orbital Sciences Corp. Credit: and expertise from both the Project Orbital Sciences Corp. integration and test engineers performed final test and check- Executive and the COTS Advisory out activities for the first two Cygnus Service Modules at the company’s Satellite Manufacturing Facility in Dulles, Virginia. Multiple service modules can and are being Teams. As Jeffrey A. Siders, Orbital assembled and tested in parallel to support COTS and the follow-on Commercial Director of Houston Operations Resupply Services missions. A full-scale poster of a fully assembled Cygnus on the wall explained at the 4th SpaceUp illustrates the overall size of the spacecraft once on orbit. Houston conference on February 8, 2013, “NASA brings in the lessons the company’s low-Earth orbit was no exception—especially in learned, they ensure we’re doing transportation system. the early years of the company. things safely, they help us in design According to Thompson, “That decisions—although the final decision Financial Milestones was probably the biggest single 329 is left to us.” Because of Orbital’s ability to use problem that we had to solve,” as existing internal funds to pay for COTS Orbital “used just about every form Milestones development, the company’s SAA did of financing that was available during not include any financial milestones. the ’80s and ’90s”—from private As with the other two commercial investment, to venture capital, to partners, Orbital’s Space Act However, all the COTS partners debt financing, to research and Agreement with NASA outlined a struggled to raise the financial development limited partnerships— series of predefined milestones capital necessary to develop their to get the new startup off the to track the development of products at some point, and Orbital ground.330 After maximizing the

CHAPTER 5 – COMMERCIAL PARTNERS 69 demonstration mission in the Space Act Agreement be replaced by a demonstration mission utilizing the Pressurized Cargo Module instead. NASA agreed to the change, and amended the Orbital SAA milestones to reflect the new plan.333

Another prominent example of flexibility and negotiation occurred regarding the “Launch Vehicle Stage 1 Assembly Complete” milestone. Although the definition would seem fairly straightforward, the milestone became the topic of significant discussions between C3PO and its commercial partner. As Orbital’s Credit: Orbital Sciences Corp. Credit: manufacturing process evolved over Interface inspections between the Antares rocket and the Antares launch mount were conducted by Orbital Sciences Corp. after the rocket had been transferred to the launch the course of development, the order pad using the Transporter, Erector, Launcher (TEL). of the rocket build changed from the original plan established at the time amount of funding available from would be recuperated once the the SAA was signed. Parts of the private sources, in 1990 Orbital went system became operational.332 second stage were now attached public with an IPO, “the equivalent of before the first stage was fully high school graduation for a rapidly Technical Milestones assembled. Project Executive Bruce growing enterprise.”331 This initial As with SpaceX, some negotiations Manners explained the quandary: offering was followed by a series of took place regarding the originally “Well, do I pay them early? … Does further public stock offerings and planned technical milestones, it make sense for me to have them debt financings in the 1990s. again showcasing the space take that second stage off, put the first agency’s flexibility in adapting to the stage pieces on there, and take it back 334 By the early 2000s—roughly 20 years commercial partners’ needs—not off so they can attach the first?” after the company was founded— the other way around. When Orbital Orbital finally reached a position of signed its Space Act Agreement By using an overhead crane, Orbital’s stability where the company no longer with NASA in February 2008, the integration and test engineers lifted one needed to raise additional capital; company proposed to complete of the three main propellant tanks into the profits from its existing rocket and its demonstration flight using an structure of the Cygnus Service Module. This Service Module was flown on the satellites programs were sufficient to Unpressurized Cargo Module. maintain the company’s operations. COTS Demonstration Mission that was However, in December 2008 the ISS successfully completed in October 2013. Orbital put a significant amount of Program Office awarded Orbital a its own internal funds at risk, about $1.9 billion Commercial Resupply $590 million over the five-year course Services contract for eight flights of of the COTS agreement, in order to pressurized cargo only. develop the company’s low-Earth orbit transportation capabilities. Orbital Seeing that it would not need to

operated the program at a financial supply any unpressurized cargo to Orbital Sciences Corp. Credit: loss prior to the COTS demonstration the ISS in the foreseeable future, flight, hoping its initial investment Orbital requested that its UPCM

70 CHAPTER 5 – COMMERCIAL PARTNERS In the end, the partners agreed to detect cracks and repair them by to a “physical configuration audit” welding if necessary.337 In addition in which NASA representatives to the stress corrosion issue, a CAT conducted an in-person examination member at NASA White Sands Test of the partially assembled first and Facility also provided data that helped second stages, and approved prevent particle contamination of Orbital’s documentation showing the liquid oxygen that could result in the remaining first-stage parts were accidental ignition.338 accounted for and ready to be added to the existing architecture.335 Mid-Atlantic Regional In addition to these matters of negotiation, Orbital faced two primary The second major obstacle for Orbital technical hurdles in the course of its in the development of its commercial Space Act Agreement with NASA, orbital transportation system was discussed below. the development of the Mid-Atlantic Regional Spaceport (MARS) launch AJ-26 Engines site adjacent to the NASA Wallops Credit: NASA/Wallops Credit: The AJ-26 engines used to power Flight Facility on the eastern coast of Maryland Senator Barbara Mikulski the Antares first stage—part of Virginia. In 1995 the Commonwealth (center) cut the ribbon March 22, 2011, Orbital’s strategy to use already of Virginia created the Virginia to open the Horizontal Integration Facility at NASA’s Wallops Flight Facility. Built to available, proven hardware—proved Commercial Spaceflight Authority support medium-class launch vehicles, more cantankerous than the (VCSFA). After leasing a tract of Orbital Sciences Corp. was the first company had originally anticipated. land from NASA and acquiring the customer to use the facility for its Antares Early development tests at NASA necessary license from the Federal vehicle. On hand for the event were Stennis Space Center revealed Aviation Administration Office of (left to right), Bill Gerstenmaier, NASA Associate Administrator, NASA that after sitting in storage for Commercial Space Transportation, Administrator Charlie Bolden; and 35-plus years, some of the engine MARS was established in 1997 for David Thompson, CEO and President components had succumbed to the launch of small launch vehicles of Orbital Sciences Corporation. stress corrosion that resulted in a from Pad 0B, including Orbital’s split fuel manifold line. (This testing Minotaur rocket.339 through investors and loans.340 was conducted under the terms Orbital determined these positives of a separate, reimbursable Space Orbital elected to conduct its Antares outweighed some of the advantages Act Agreement with Stennis Space launches at MARS after reviewing offered by , in particular Center, in which Orbital paid NASA proposals from both MARS and Cape Canaveral’s well-developed for the use of its specialized testing Space Florida, which proposed to existing launch infrastructure for facilities which were not available from host the company’s launches from medium- and large-class rockets.341 a commercial provider.)336 Cape Canaveral. Factors in favor of MARS included its proximity to In September 2008, the old Pad In order to address the problem, Orbital’s headquarters in Dulles, 0A was razed in order to begin Orbital relied on the COTS Advisory Virginia; Orbital’s familiarity with construction on the infrastructure Team, materials and corrosion experts the Wallops site and organizational required for Antares. The process brought in by the Commercial Crew culture; and the political support of of developing MARS Pad 0A for a & Cargo Program Office to help Maryland Senator Barbara A. Mikulski. medium-class rocket, starting “from with specific problems. Together, Furthermore, the VCSFA promised to a green field,” was more expensive Aerojet and Orbital developed a fund MARS directly through the use and more time consuming than either “nondestructive evaluation program” of tax-free bonds, whereas Space MARS or Orbital had foreseen.342 of X-rays and eddy current inspections Florida would need to seek financing The liquid fuel farm that supplies

CHAPTER 5 – COMMERCIAL PARTNERS 71 Credit: NASA/Bill Ingalls Credit: The Mid-Atlantic Regional Spaceport, a commercial space launch facility, is located on Virginia’s Eastern Shore. Orbital Sciences Corp., NASA, state, and local officials coordinated efforts to transform Pad-0A into a facility that could support the medium-class Antares rocket.

propellant to the rocket presented Complicating matters was the Augmentation Milestones an especially troublesome area, complex nature of relationships Orbital received an additional as operations required a complex between federal and state agencies $118 million as a result of the fiscal and precise configuration of and the private corporation, as NASA, year 2011 augmentation of the components to ensure correct VCSFA, and Orbital coordinated to COTS budget, and NASA and the cleanliness levels, temperatures, prepare the facility for launch. To help company agreed to 10 additional pressures, and flow rates. Specific relieve the issue, NASA contributed milestones to accelerate development issues included “bad welds, the horizontal vehicle assembly and mitigate risks. valves that didn’t work, [and] building, and Orbital advanced about resonances in the fueling system that $45 million to the state of Virginia These additional SAA milestones caused it not to operate.”343 in order to complete development. were divided into three main tasks: The accumulation of small issues the addition of a Taurus II (Antares) Thompson reported that the cost resulted in what turned out to be maiden flight, installation of an was about three times higher and lengthy delays, but work was finally additional processor-in-the-loop the site took two years longer to 344 completed in October 2012. simulator, and a Proximity Flight complete than originally estimated. Equivalent Unit (PROX FEU) test

72 CHAPTER 5 – COMMERCIAL PARTNERS unit for ISS integration testing.345 “perfect” test flight of the rocket. The latter two items provided After two scrubs, the first due to a additional software to improve the disconnected data cable and the accuracy of modeling and operations, second due to high winds, Antares but for both NASA and Orbital the successfully launched from Pad 0A at most important milestone was the 5:00 p.m. local time on April 21, 2013. additional test of the launch vehicle. The separation of the first and second stages of the rocket occurred exactly The addition of a test of the rocket as planned, and 10 minutes after prior to attempting a launch of the launch the Cygnus mass simulator entire system allowed Orbital to was deployed and reached close to verify that this crucial element could its targeted orbit of approximately complete its role in the mission 150 to 160 miles. The inclination of before attempting the full journey to 51.6 degrees matched that of ISS ISS. According to Orbital officials, and the company’s upcoming final this test was one the company had demonstration mission.348 wanted to complete at the beginning of the program, but the available Describing the tension in the control NASA and internal funding did not room at Wallops, DeMauro said, allow for its inclusion in the original “I don’t recall ever being as nervous Space Act Agreement.346 as I was—not because I didn’t think it would work, just because all of us The Antares test flight launched a knew how important it was.”349 Eberly, Cygnus mass simulator, designed who had worked on the rocket since with the same weight, volume, and its inception as Taurus II in April 2007, center of gravity as the PCM that added, “We’d done our homework, would later be launched to ISS. Eberly but you can never be sure that explained, “The rocket launch is the everything’s going to work properly most astringent environment that a together.”350 When the moment of spacecraft will see in its lifetime,” so first-stage separation arrived, the adding thermometers, microphones, control room erupted in spontaneous and other instrumentation to applause, the managers and engineers measure factors such as vibration, relieved and elated to see all their acoustic, and thermal loads helped hard work culminate in a successful collect information to ensure mission, “all feeling like little kids again, Cygnus would be able to handle feeling completely renewed.”351 the launch environment in order

to successfully complete the ISS In addition to the Cygnus mass Orbital Sciences Corp. Credit: demonstration mission.347 simulator, Antares also deployed three The Antares rocket launched from experimental —called Pad-0A of the Mid-Atlantic Regional Spaceport on the NASA Wallops Flight Alexander, , and —that Antares Test Flight Facility in Virginia on April 21, 2013. used smartphones to photograph the The test launch marked the inaugural On February 22, 2013, Orbital Earth from space. Other picosatellites, flight of the Orbital Sciences Corp. completed a successful hot fire test of including the Dove-1 satellite rocket and the biggest rocket ever dedicated to amateur radio, provided launched from this facility. The Antares the Antares rocket on MARS Pad 0A, deployed a Cygnus mass simulator additional data for those interested and two months later the company’s and three experimental PhoneSats— and commitment to in “open[ing] space to a whole new Alexander, Graham, and Bell—that used resolving issues culminated in what generation of commercial, academic, smartphones to photograph the Earth 352 was described as a “flawless” and and citizen-space users.” from space.

CHAPTER 5 – COMMERCIAL PARTNERS 73 Cygnus Demo Mission

On September 18, 2013, Orbital conducted its second launch of the Antares rocket, this time aiming for the International Space Station with a fully-operational Cygnus as its payload. The company named the spacecraft for G. David Low in honor of the three-time Space Shuttle astronaut and former Orbital executive who had 353 NASA/Bill Ingalls Credit: passed away in March 2008. NASA Administrator (right) congratulated the Orbital Sciences Corp. launch team and management in the Range Control Center at the NASA Wallops Flight Ten minutes after launch, at Facility after the successful maiden launch of the company’s Antares rocket. 11:08 Eastern time, the Cygnus capsule separated from the second engineers discovered a discrepancy members to arrive via the Russian stage of Antares and began its in the navigation software used by Soyuz on September 25. journey to low-Earth orbit.354 Cygnus and ISS. Cygnus successfully performed Eleven days after the Antares launch, its first on-orbit tasks, for example The team decided the most prudent in the early hours of the morning on deployment of its solar arrays and course of action would be to delay Sunday, September 29, 2013, Cygnus an abort demonstration. However, the berthing by one week. This began its approach toward the Earth- approximately six hours before it was would allow sufficient time for the facing, or nadir, side of the International due to berth with ISS on the morning team to upload a software fix, and Space Station. After demonstrating of September 22, Orbital and NASA for three new crew its remaining on-orbit tasks, including

NASA astronaut Karen Nyberg (left) About 10 meters away, the ISS crew members used the Canadarm2 to grapple the and European Space Agency astronaut Orbital Sciences Corp. cargo module. The Cygnus remained at the ISS for three Luca Parmitano, both ISS Expedition weeks before it was released with disposables from the International Space Station. 37 flight engineers, monitored the As planned the Cygnus spacecraft destructively reentered the Earth’s atmosphere over approaching Cygnus spacecraft as it the Pacific Ocean. neared the ISS, on September 29, 2013.

74 CHAPTER 5 – COMMERCIAL PARTNERS retreat and hold capabilities, at unloading the vehicle’s 1,543 pounds 5:00 a.m. local time NASA Mission of cargo. On October 23, 2013, Control in Houston granted the Cygnus completed its three-week capsule permission to enter the stay by deorbiting from ISS, this Station’s 660-foot Keep Out Sphere. time loaded with disposables from the Station, and destructively The grapple that was planned for reentering Earth’s atmosphere over 11:15 a.m. GMT occurred slightly the Pacific Ocean. ahead of schedule, as American astronaut Karen Nyberg and Italian astronaut Luca Parmitano operated Ready for the Future the Station’s robotic Canadarm for a C3PO team Credit: In the course of Orbital’s Antares NASA’s commitment to work with successful grapple of the “beautiful and Cygnus development programs, commercial partners extends into the future. baby swan” at 11:02 a.m. GMT, Among those from the space agency who the company’s demonstration as ISS passed over the Indian continue to support this effort are (left to flight to ISS occurred after a Ocean.355 Afterward, C3PO Manager right) Marc Timm, COTS Program Executive, cumulative delay of almost three NASA Headquarters; Phil McAlister, Lindenmoyer described the mission years, as the terms of the original NASA Director of Commercial Spaceflight as “just beautiful,” as he praised Space Act Agreement planned Development; Dennis Stone, C3PO Program Orbital for its “professional, skilled” Integration Manager; and Sam Scimemi, for the ISS demonstration mission approach to addressing development Director for International Space Station at to occur in December 2010. and mission challenges “with such NASA Headquarters. Many of these delays were the expertise over the years.”356 result of development at least some degree of schedule issues outside of Orbital’s control, The next day, the astronauts and slips based on the partners’ original, and members of C3PO expected cosmonauts onboard the ISS began aggressive schedules. In the words of Orbital Project Executive Bruce Manners, “They make jokes about rocket science for a reason.”357 However, having cleared the hurdle of the demonstration mission, Orbital was now ready to commence regular resupply missions under its $1.9 billion Commercial Resupply Services contract.358 Culbertson discussed how future missions would be capable of carrying more cargo, over two and a half tons (5,000 pounds) by the fourth CRS mission, and focus more on scientific payloads for ISS research. Because future missions would not have to complete on-orbit demonstration tasks, these payloads could arrive at ISS within two to three days after launch. Credit: NASA/James Blair Credit: Frank Culbertson, (center), Executive Vice President and General Manager of Orbital’s Advanced Programs Group, provided details about the Cygnus demonstration mission at a press conference held at JSC. Seated next to him was C3PO Manager Alan Lindenmoyer, and ISS Flight Director Courtenay McMillan (right), who during the mission gave the go-ahead for the Cygnus to rendezvous and berth with the International Space Station.

CHAPTER 5 – COMMERCIAL PARTNERS 75 Space Act Agreement in February 2008 through June 2013, NASA contributed approximately $288 million in milestone funding for the COTS development work, while Orbital spent a total of approximately $590 million, contributing more than twice the NASA commitment to complete the program.

Orbital has more than three decades of experience with small launch Credit: NASA/Jay Westcott Credit: vehicles and satellites, although it NASA Administrator Charlie Bolden recognized the Commercial Orbital Transportation Services program and its commercial partners for innovative accomplishments and started off focusing on a single NASA outstanding contributions to the space agency. (Pictured left to right) Bolden presented program. Over time (especially after the NASA Group Achievement Award to Frank Culbertson, Executive Vice President and the Challenger accident in 1986) the General Manager, Orbital Sciences Corp. Advanced Programs Group; Gwynne Shotwell, company continued to grow and President, SpaceX; and Alan Lindenmoyer, Manager of NASA’s Commercial Crew & diversify, moving from small temporary Cargo Program. Bolden stated how “America’s best days in space exploration are ahead of us” during the awards ceremony held at NASA Headquarters in Washington, DC, facilities to a larger campus on Warp November 13, 2013. Drive in Dulles, Virginia in 1993.360

Culbertson explained, “We’re happy Several observers have pointed out If Rocketplane Kistler provides to take food and clothing…but how a relatively small government the example of an unsuccessful we want to make sure that we’re investment has resulted in the aerospace startup, and SpaceX a also able to provide the science development of a new low-Earth fledgling company in rapid growth, and the research that can be orbit delivery system—comprised Orbital shows one possibility for what accomplished on the Station,” of a medium-class launch vehicle, a mature aerospace company can adding, “We know and understand the Cygnus capsule, as well as the look like after 30 years of operation. and accept the responsibility that ground-support technologies and Now both COTS commercial partners this is critical to the continuation of infrastructure that allow those vehicles had the opportunity to finish a project the Station and the continuation to function—for both government conceived decades ago—private of U.S. leadership in space.”359 and private-sector customers. From cargo resupply services to support the time Orbital and NASA signed the NASA’s mission in low-Earth orbit.

This timeline illustrates the eight-year history of the COTS program, beginning with the first competition in 2006 and culminating with the final partner demonstration missions in 2013.

76 CHAPTER 5 – COMMERCIAL PARTNERS Collaboration

International Space Station Federal Aviation Administration

CHAPTER 6 – COLLABORATION 77 chapter 6 Unique in its operations, the Commercial Crew & Cargo Program Office (C3PO) worked with organizations within NASA, as well as other federal agencies, to stimulate the commercial space industry. Interactions with the International Space Station (ISS) Program Office and the Federal Aviation Administration (FAA) Office of Commercial Space Transportation proved that while COTS forged new relationships between NASA and industry, the program’s innovative methods could mesh with established tradition. Although not everyone accepted this new approach at the outset, the achievements of the Commercial Orbital Transportation Services (COTS) initiative remain evident, and lessons learned from the program continue to be utilized. International Space Station

As a multi-billion dollar asset, the collaborating with external organizations International Space Station maintains through its work integrating a strict set of requirements for International Partner resupply vehicles vehicles approaching within 660 feet to the Station’s modules. of its football field-sized structure, the so-called Keep Out Sphere (KOS), Before the development of U.S. to protect the Station’s structure, commercial cargo capabilities, equipment, scientific experiments, the ISS relied on four international and human crew. Potential issues for vehicles (in addition to the Space commercial cargo missions included Shuttle) to provide regular resupply vehicle collisions, services: the Russian Federal Space strikes, and plume impingement, Agency’s Soyuz and Progress i.e., visiting vehicle exhaust streams spacecraft, the European Space that could leave harmful deposits of Agency’s Automated Transfer Vehicle contaminants and/or damage delicate (ATV), and the Japan Aerospace structural elements of the Station Exploration Agency’s H-II Transfer 362 such as solar arrays.361 Vehicle (HTV). The Soyuz transports up to three people to and from the Under the COTS program, the Space ISS, but the Progress, ATV, and HTV Exploration Technologies Corp. can carry cargo only. Upon reentry (SpaceX), Orbital Sciences Corp., and into Earth’s atmosphere, these cargo Rocketplane Kistler (RpK) all proposed vehicles disintegrate and incinerate to perform the demonstration of waste materials returned from ISS. their low-Earth orbit capabilities by visiting the ISS, and therefore The International Partner experience were required to meet the Station’s laid the groundwork for the COTS visiting vehicle requirements. COTS visiting vehicles, as NASA personnel offered the possibility of a U.S.-based learned from working with their option for not only carrying additional Russian, European, and Japanese cargo, including powered payloads counterparts the need to minimize for science experiments, but also and clearly communicate even returning research samples back to seemingly basic aspects of the Earth for study. launch, rendezvous, and docking process (including standard The ISS Transportation Integration NASA procedures such as the Office (TIO) already had experience Certification of Flight Readiness).

78 CHAPTER 6 – COLLABORATION Credit: NASA/Bill Ingalls Credit: While the commercial partners developed their launch vehicles and cargo delivery systems, the ISS Transportation Integration Office worked closely with the companies to ensure a safe transport to and from the orbiting laboratory. NASA’s ability to conduct new scientific investigations for the ISS Program, led by Manager Mike Suffredini (above), significantly increased because of the rockets and spacecraft built by SpaceX and Orbital Sciences Corp. The ISS Program was extended until at least 2024 by President . In the near-term, all current and planned U.S. experiments aboard the International Space Station will be facilitated in some way by a SpaceX or Orbital Sciences Corp. resupply mission.

This helped ensure all the Lueders emphasized that she rationale behind each of the many International Partners were, as it “viewed the companies as a partner,” requirements for ISS docking and were, speaking the same language.363 working with them collaboratively to berthing. These questions forced the determine how both parties could ISS Program Office to consider the TIO Manager Kathryn L. Lueders meet their respective needs.365 For justification for each of the technical was assigned the role of COTS-ISS the COTS industry partners, this obligations imposed, ensuring the integration in October 2006, roughly meant developing their vehicles as requirements truly contributed to two months after the Round 1 Space expeditiously as possible, without mission safety, instead of maintaining Act Agreements were signed. She being hampered by superfluous a set list out of tradition. Frank became responsible for tailoring requirements that did not reduce the DeMauro, Orbital’s COTS/CRS the visiting vehicle requirements for risk of operations. For the ISS Program Program Director, referred to the commercial vehicles. To meet the Office, this meant ensuring the safety discussions as collaborations: “It’s early December deadline for the first of the Station and its inhabitants. important to point out that it wasn’t SpaceX System Requirements Review, stake-in-the-ground, no flexibility.”366 Lueders relied on the draft COTS ISS ISS TIO met with representatives Interface Requirements Document from each of the COTS partners These negotiations also allowed that had been developed as a guide to negotiate their visiting vehicle Station engineers to impart some of by C3PO Deputy Program Manager requirements (including RpK before their wisdom and lessons learned to Valin B. Thorn, using it as a starting off its Space Act Agreement with the partners. For example, Orbital was point to negotiate in tandem with the NASA was terminated in October able to simplify its avionics system as a selected COTS companies.364 2007). The companies were allowed result of working with the ISS Program the opportunity to question the Office.367 In fact, for both Orbital and

CHAPTER 6 – COLLABORATION 79 Orbital Vice President Antonio L. Elias described the interaction as one “of two organizations: one that knew a lot about commercial low- cost space, the other that knew a lot about traditional government procurement and tests, and both trying to find a way to do things in a satisfactory way.”373

The ISS Program Office also adapted to allow commercial partners to retain their intellectual property rights as specified under the terms of their COTS Space Act Agreements. TIO learned how to work with companies’ proprietary data from both the COTS program and the NASA (LSP) at the Kennedy Space Center, another Credit: NASA/Kim Shiflett Credit: Under the COTS program, the government and private sector invested funds, shared group that was accustomed to buying risks, and moved through technical challenges to successfully restore U.S. cargo services and having limited rights to transport capabilities for the ISS. Alan Lindenmoyer, Manager of NASA’s Commercial this type of information. Conversely, Crew & Cargo Program, described COTS as “a new era in spaceflight.” He is pictured the commercial partners learned above with Gwynne Shotwell, President of SpaceX, the first commercial partner to complete its COTS milestones. how to better compartmentalize their documentation, separating company technical design data from documents SpaceX, software compatibility In addition to the requirements, NASA needed for ISS integration. This was proved to be a formidable issue. and its commercial partners also especially important because some SpaceX also experienced issues negotiated how to verify that those COTS partner integration data was because it utilized a more recently requirements had been met. That not only shared with NASA, but also developed programming language, is, to use an example from SpaceX, NASA’s International Partners.374 rather than those used by NASA’s what kind of data was required to heritage systems.368 show that the Dragon spacecraft’s software was compatible with ISS SSP 50808 In some cases the NASA project avionics. According to SpaceX executives served as brokers between President Gwynne E. Shotwell, the In the summer of 2007, the ISS the partners and their counterparts verification process was a huge Program Office produced Space in the ISS Program Office. Michael J. challenge that was sometimes Station Program (SSP) 50808, the “Mike” Horkachuck, Project Executive “painful for both NASA and SpaceX,” ISS to COTS Interface Requirements for SpaceX, described how he was because “there are hundreds, if not Document. ISS Program Manager able to apply his knowledge of ISS a thousand or so, requirements.” Michael T. Suffredini determined that development history to “influence She added that there were years of SSP 50808 would be the only volume how hard the ISS team was pulling discussion on, “how do you prove private entities would need in order on a particular requirement, and try that you’ve met them?”371 to visit ISS, as opposed to producing to add a little bit of sanity to meeting individually-tailored books for each the letter of the law versus the overall However, in the end, SpaceX partner. One integrated volume intent.”369 Horkachuck explained employees reflected that they had “really makes the Station Program that he was able to “talk to the “an opportunity to grow together have to justify why that requirement is NASA side, whoever was raising the with the ISS office” during COTS there, and why it’s worded a certain concern, and understand, mediate and developed a harmonious way,” explained Lueders.375 our way through.”370 working relationship with NASA.372

80 CHAPTER 6 – COLLABORATION Like COTS, SSP 50808 reflected Commercial Resupply (CRS) contract was issued by the ISS NASA’s new way of doing business. Services Contracts Program Office, the customer of those The document continued to evolve services, independently of C3PO. as NASA added to the number of The original plan for NASA’s private enterprises aiming to visit the commercial initiative called for NASA originally planned to compete International Space Station, including its execution to occur in two and award CRS after the participating the companies that participated in consecutive phases. In Phase 1, COTS companies had successfully NASA’s follow-on commercial COTS, the commercial partners completed all the milestones of their crew programs. For example, Revision would develop and demonstrate Space Act Agreements and proven D, the updated version of SSP their low-Earth orbit transportation their ability to deliver cargo to a 50808 released in early 2012, added systems. Understanding that COTS destination in low-Earth orbit. But, specifications for docking directly to would create viable competitors for in the spring of 2007 a NASA team the Station, whereas previous versions a follow-on procurement, Phase 2 composed of Lindenmoyer, Lueders, had only addressed berthing to ISS would then entail the purchase of and Ramon Lugo, Deputy LSP with the aid of the robotic Canadarm. these fully-developed services through Manager, concluded that awarding A continued effort was made to make a traditional Federal Acquisition CRS after the COTS missions could the volume easier for new commercial Regulation-based services contract. adversely impact Station. providers to use and understand. This Commercial Resupply Services Based on the original schedule for the commercial partners’ In December 2008 NASA awarded Commercial Resupply Services (CRS) contracts to demonstration missions, and with both COTS partners. SpaceX was contracted for 12 missions and launched its first CRS flight on October 7, 2012. Shown below is the Falcon 9 rocket with the Dragon spacecraft the anticipated retirement of the on board prior to the second delivery, SpaceX CRS-2, that lifted off March 1, 2013. Shuttle looming, if NASA waited until those demonstration missions were complete, the Station would face a 27- to 30-month servicing gap due to the lead time required to start a new contract. This could mean a cargo shortfall of 48.8 metric tons (107,585 pounds) or more. Plus, if development delays occurred within the COTS program, the gap could increase Credit: NASA/Tony Gray and Robert Murray NASA/Tony Credit: even more. Therefore, the team recommended that the procurement for CRS take place much sooner than originally planned.376

According to the team’s analysis, the contract needed to be awarded by December 2008 at the latest. On August 7, 2007, the Space Operations Mission Directorate (SOMD) at NASA Headquarters issued a Request for Information, soliciting input from commercial companies on their potential to provide commercial cargo services to ISS.377 After three days of meetings with industry, NASA determined that sufficient interest existed in order to release a Request for Proposals for a commercial

CHAPTER 6 – COLLABORATION 81 resupply contract. The CRS Request were demonstrated], but I had to companies, in order to allow for for Proposals was issued on April because of the time criticality.”379 redundancy to ensure the Station 14, 2008, and ISS awarded the CRS received all 40 metric tons (88,185 contract on December 23, 2008— Unlike the COTS Space Act pounds) of supplies needed by the only a few months after the first Agreements, CRS was a end of the contract.381 As with the successful flight of the SpaceX Falcon procurement; NASA was buying first round of the COTS competition, 1 rocket, and less than a year after a definite service, with a contract SpaceX submitted the most highly Orbital signed its SAA with NASA.378 subject to the Federal Acquisition ranked proposal, receiving the highest Regulations. A different set of score for both the evaluation criteria William H. “Bill” Gerstenmaier, head personnel participated in the Source of 1) mission suitability, and 2) lowest of the Space Operations Mission Evaluation Board and procurement price (with the former prioritized as Directorate (SOMD) in 2008 at NASA process than were involved in the more important than the latter).382 Headquarters, later explained that contemporaneous COTS work. NASA “if we didn’t move out with some kind Deputy General Counsel Sumara Although the Source Evaluation of services contract there was going Thompson-King explained, “People, Board scored PlanetSpace marginally to be no ability to resupply the Space language, resources—we put up a higher than Orbital Sciences Corp. Station. This is where it became firewall of sorts to make sure that, as for both criteria, Gerstenmaier found serious. We absolutely needed this much as we could within the Agency that several weaknesses in the service; we were destined to retire and external to the Agency, they were PlanetSpace proposal outweighed the Shuttle.” He added, “We had no viewed as different processes.”380 its potential strengths. First, although choice. If we were going to deliver, PlanetSpace’s subcontractors we needed to go do the services Gerstenmaier served as the CRS Lockheed Martin Corp., The Boeing contract, move out, and move selection official, making the ultimate Company, and Alliant Techsystems, forward.” Gerstenmaier reemphasized decision regarding which of the three Inc. (ATK) had substantial past that “I didn’t want to do this companies that submitted proposals experience working on government procurement [before the capabilities would receive the award. In the end programs, the same could not be Gerstenmaier decided to select two said of PlanetSpace itself. Second, NASA found multiple issues with the company’s cost assumptions. For example, PlanetSpace would be awarded a fixed-price contract from NASA, but planned to pay its subcontractors on a cost-plus basis—resulting in a potentially significant financing gap which the company had no reasonable plan to address. NASA also found several of the company’s technical, schedule, and costs assumptions to be “unrealistically optimistic.”383

NASA’s Source Evaluation Board noted Orbital’s use of Aerojet AJ-26 engines—refurbished decades-old Credit: NASA/Paul E. Alers Credit: William H. “Bill” Gerstenmaier, as NASA Associate Administrator for the Human Exploration Russian NK-33s originally developed and Operations Directorate, provided updates to Congress on both the COTS and CRS for the Soviet Moon program—as a programs. He included details of the progress as well as explanations of what he called the weakness. This weakness was not “challenges associated with a technologically ambitious endeavor.” Gerstenmaier began ranked as significant because it was his career with NASA in 1977 and through the years led major efforts for the space agency somewhat mitigated by subcontractor including the Space Shuttle and International Space Station programs prior to 2005 when NASA named him to lead the agency’s Space Operations Mission Directorate. In 2012 Gerstenmaier’s duties expanded with his current role.

82 CHAPTER 6 – COLLABORATION Credit: NASA/Bill Ingalls Credit: NASA contracted with Orbital Sciences Corp. to complete eight missions to the ISS as part the Commercial Resupply Services (CRS) contract. The Antares rocket (shown above) with the Cygnus cargo capsule filled with crew provisions, spare parts, science experiments, and other hardware launched on January 9, 2014, for its CRS-1 mission.

Aerojet’s experience and the fact that Government increasingly critical to the Agency’s the engines were stored in a humidity- Accountability Office mission to maintain the International controlled environment. On the whole, Protest Space Station, Gerstenmaier made NASA found that this weakness was the risky decision to override so After losing to SpaceX and Orbital, balanced by the strengths of Orbital’s that the CRS contract could be PlanetSpace protested NASA’s existing processes and in-house implemented as quickly as possible. decision at the Government expertise. Orbital also proposed to Gerstenmaier spent hours on the Accountability Office (GAO), where, deliver ISS resupply services by 2012, stand justifying his decision, and as with the two protests of the a year earlier than PlanetSpace.384 as another credit to the legal team, COTS awards, the NASA legal teams NASA’s decision to override the at JSC and NASA Headquarters The fixed price Commercial automatic stay was one of the rare again successfully defended Resupply Services contracts were cases upheld at the Department of the space agency’s selection. thus awarded to the two COTS Justice Court of Federal Claims.387 partners, SpaceX and Orbital. Each The GAO issued its decision on April of the respective contracts began on 22, 2009, explaining that despite January 1, 2009, and ran through PlanetSpace’s claims of biased Collaborative Efforts the end of 2016, requiring delivery of treatment, the selection process had 386 The award of the CRS contracts to 20 metric tons (about 44,100 pounds) been fair and transparent. the COTS competitors facilitated to the International Space Station, For many on the legal team, the efforts within the ISS Program Office distributed over multiple flights. protest itself was less significant to ensure the companies’ vehicles SpaceX was contracted to deliver than NASA’s decision to override would be prepared for their future ISS the specified quantity of upmass the “automatic stay” provision that resupply flights. The transportation (cargo to ISS) over 12 missions for a requires the Agency to put the integration teams that verified that total price of $1.6 billion. Orbital was program on hold for 100 days while the COTS partners met integration contracted for eight missions for a the GAO makes its decision. Because requirements were able to transition total of $1.9 billion.385 ISS resupply services were seen as their technical knowledge of the

CHAPTER 6 – COLLABORATION 83 Dragon and Cygnus spacecraft to the management of the CRS contract. Lueders explained how, by “leverag[ing] off of that work that had already been done … we were able to optimize our resources and the contractors’ resources, and then optimize how we were relating with Alan’s [COTS] folks too.”388

After the CRS award, Lueders and International partners provided supplies to the ISS after America’s Space Shuttle Program TIO worked “hand-in-glove” with ended in July 2011. The European Space Agency built five Automated Transfer Vehicles Lindenmoyer and the COTS team in (ATV), pressurized modules with a cargo capacity of almost 17,000 pounds. Shown encouraging the commercial partners above is the Jules Verne, the first ATV that launched March 9, 2008, and docked with the to meet their technical milestones. ISS on April 3. On September 29, 2008, as it reentered the Earth’s atmosphere, the ATV incinerated as planned. The two offices held joint quarterly review meetings to present a united NASA front, sometimes playing “bad now Dragon and Cygnus. Further both SpaceX and the ISS office: cop, good cop,” with the commercial complicating matters was the fact ISS also needed additional time to partners in order to encourage that ISS had contracted missions determine how best to robotically their development.389 Antonio L. for vehicles that did not yet exist in extract external cargo from the Elias, Executive Vice President and flight-ready form. As the commercial Dragon spacecraft. Chief Technical Officer of Orbital, partners’ technical milestones observed that C3PO functioned as continued to slip, resulting in an Augmented Funding a “lubricant” for the ISS Program almost three-year development delay Office and commercial partners from original projections, the ISS In fiscal year 2011, Congress took “to mesh together.”390 While C3PO office adjusted its schedules and the rare and noteworthy step of maintained the role of investor, aiding cargo manifests to accommodate the approving the addition of $300 million development but offering payment necessary resupply. to the C3PO budget. (More details only upon milestone completion, of the augmentation can be found TIO approached the problem from Lueders’ office was able to enforce in Chapter 4: Program.) The COTS a position of trying to aid and stricter requirements in accordance team reviewed multiple potential encourage what they recognized was with the terms of the CRS contracts. uses of these unanticipated funds. a very demanding and challenging Lueders reported that, “Honestly, Actions under consideration included task for private industry. Lueders it was a great, great collaboration modifying the ISS Commercial used the term “balance” to describe between us.”391 Resupply Services contracts (for NASA’s approach to securing the example funding early cargo delivery, contracted delivery services without As with the definitions of and/or building additional capsule being so overbearing as to prevent requirements, the ISS Program Office mockups for training) and giving the companies from being “healthy” worked flexibly with the commercial money to other NASA organizations enough to carry out their missions. partners to schedule their resupply that supported the infrastructure for Instead of “driving them into the missions under the CRS contract. commercial cargo delivery.393 Even after the ISS office verified ground with launch slip costs,” the that vehicles conformed to SSP ISS team viewed the commercial As part of the original COTS 50808, vehicles could not fly to the partners as such, and arranged at agreements, NASA’s contributions to International Space Station at will. the beginning of the contract to be the commercial partners were fixed The ISS office maintained a complex able to negotiate launch schedules at the beginning of the program, and schedule for all visiting vehicles slated and missions profiles to better suit any cost increases incurred while to resupply the orbiting laboratory: the development needs of both the pursuing the milestones were solely 392 Soyuz, Progress, ATV, HTV, and companies and ISS. In one case, the responsibility of the commercial for example, a schedule slip benefited

84 CHAPTER 6 – COLLABORATION partners. Therefore, when additional commercial companies. The resulting funding became available, C3PO Federal “big, fat book of regulations” was determined that the best application added to the list of requirements the of these funds was to add milestones Aviation COTS commercial partners needed to the commercial partners’ COTS to comply with in order to launch Space Act Agreements specifically to Administration their ISS demonstration missions.402 reduce technical risk and accelerate Although these regulations might While NASA’s safety community development of their respective be seen as an additional burden, largely accepted how operations systems to deliver the needed cargo according to Dr. George C. Nield, pertaining to the ISS were conducted, to low-Earth orbit.394 FAA Associate Administrator for some noted the Agency’s lack of AST, the FAA also helped new jurisdiction in the case of an accident At the time of the augmentation, companies by providing a known on Earth.399 Because the industry COTS was still “owed” $12 million in regulatory environment that could partners’ launches and reentries funding from the original $500 million be accounted and planned for in were commercial, not government allocation. Therefore, the program companies’ business plans.403 For activities, these fell under the expected to receive $312 million in more established companies such authority of a different federal agency, fiscal year 2011 ($300 million plus as Orbital, employees were already the Federal Aviation Administration $12 million) for augmentation and accustomed to the licensing process, (FAA) Office of Commercial Space original program milestones. Instead, as it had become part of their regular Transportation (AST). C3PO received only a $300 million launch routine.404 allocation. This meant the program The space policy that President had to use $12 million of the $300 Ronald Reagan established in the early million augmentation for original Regulations 1980s (before the Challenger accident) milestones, leaving $288 million in strongly supported commercial space Any private entity launching from available additional funds.395 enterprises. The 1984 Commercial the U.S., or any U.S. company C3PO transferred $17.5 million to the Space Launch Act allowed and conducting launches abroad, is ISS Program Office in order to allow encouraged the development of required to demonstrate that the ISS to purchase cargo on the COTS private launch and reentry services, operation will not “jeopardize public demonstration missions, a service and created the AST under the health and safety, or safety of not permitted under the terms of the Department of Transportation “to form property” in order to receive either COTS Space Act Agreements.396 a single one-stop shop that would a launch or reentry license, an This left about $118 million worth of facilitate the process of a commercial experimental permit, or an operator’s 405 additional milestones to be added to entity conducting a launch.”400 The license. These regulations apply each partner’s Space Act Agreement. Office was charged with the dual tasks only to launch and reentry safety. From December 2010 to May to 1) regulate the U.S. commercial That is, they are intended to protect 2011, these additional milestones, space transportation industry, and the general public and property on including a thermal vacuum test 2) “encourage, facilitate, and promote the ground only, not any human for SpaceX and an additional test commercial space launches and participants of any potential suborbital flight for Orbital, were negotiated reentries by the private sector.”401 or orbital flights. with the partners and added to their In 1995, AST was transferred to the The requirement for COTS partners to respective Space Act Agreements.397 FAA, where the office continues to both promote commercial space and obtain launch licenses from the FAA Engineers in C3PO saw the ensure compliance with regulations was understood from the beginning of advantage of this mid-stage injection for all launch and reentry operations the initiative, and was reflected in both of funds, noting that at that point conducted on U.S. soil and abroad COTS announcements. During the the strengths and weaknesses in by U.S. companies. competition, an engineer from the FAA project development were becoming reviewed potential partners’ licensing more apparent, and “you can start Working with the U.S. Air Force, AST plans, and “let NASA know whether plugging holes in where there are codified the military’s best practices the company had already started 406 big weaknesses.”398 into common safety standards for discussions with the FAA.”

CHAPTER 6 – COLLABORATION 85 numerous commercial spaceflight and NewSpace conferences to meet with industry. Other activities that AST conducts to promote the commercial spaceflight sector include: hosting meetings of the Commercial Space Transportation Advisory Committee (COMSTAC), holding an annual Commercial Space Transportation Conference, publishing economic impact studies and launch forecast reports, and reaching out to potential launch license applicants.410

Nield explained, “We don’t ever compromise safety, but if you look at the encourage/facilitate/promote role, we’re trying to listen and understand what kinds of policies or activities the government is doing that are turning 411

Credit: George Nield George Credit: out to be obstacles to the industry.” NASA and the Federal Aviation Administration (FAA) have partnered to enable American By maintaining and encouraging industry to provide the government and private-sector customers with safe, reliable, and open lines of communication with cost-effective transportation to low-Earth orbit. (Left) Dr. George Nield, FAA Associate industry representatives, Nield was Administrator for Commercial Space Transportation, and Charlie Bolden, NASA Administrator, both participated in the 2012 Commercial Space Transportation Conference. able to earn the trust of commercial companies and overcome any initial suspicions they may have had about Limiting the number of regulations for amount will be the responsibility working with a government agency. the private sector was a deliberate of the U.S. government.409 Both strategy designed to encourage the government indemnification and As with its work with the ISS incipient commercial spaceflight the moratorium on regulations are Program, C3PO’s collaboration sector. The 2004 Commercial Space intended to encourage the industry with the FAA proved pivotal to the Launch Amendments Act updated the and make U.S. companies more success of COTS. The cooperative, legislation signed 20 years prior and competitive internationally, and partnership philosophy of both the included a “learning period” from 2004 in theory will be phased out as ISS Transportation Integration Office to December 2012 that limited the commercial launch companies gain and the FAA Office of Commercial FAA’s ability to impose regulations for more experience in space operations. Spaceflight mirrored the COTS crew and spaceflight participants.407 approach to working with the In February 2012, Congress extended commercial sector—enforcing safety 408 Promoting this moratorium until October 2015. Commercial Space where necessary, but also remaining cognizant of the need to critically Since 1988, the U.S. government In addition to regulating launch examine rules and regulations. has also provided indemnification and reentry operations, the to commercial providers of launch second half of the FAA Office of services. In the case of an accident, Commercial Spaceflight’s mandate the company will be only financially is to encourage and promote the liable for what has been determined commercial spaceflight sector. through the licensing process as Nield has continued AST’s mission “maximum probable loss.” Any further by, among his other duties, attending

86 CHAPTER 6 – COLLABORATION First Steps Toward Commercial Crew

Commercial Crew Development Commercial Crew Program

CHAPTER 7 – FIRST STEPS TOWARD COMMERCIAL CREW 87 chapter 7 With the development of ISS cargo delivery services underway, in 2009 the Commercial Crew & Cargo Program Office (C3PO) moved forward with the development of the technologies needed for commercial crew transportation. C3PO was allocated $50 million of stimulus funds from the 2009 American Recovery and Reinvestment Act “to support efforts within the private sector to develop system concepts and capabilities that could ultimately lead to the availability of commercial human spaceflight services.”412 Commercial Crew Development Following the same pattern as of the agreement, as well as the two COTS competitions, on companies’ connections to other 10 August 2009, NASA issued the members of industry. Commercial Crew Development (CCDev) Announcement for potential “By engaging with potential customers industry partners interested in early in development, there is a entering into funded Space Act higher likelihood that its development Agreements to develop the activities will contribute to accelerating vehicles and technologies needed a commercial crew transportation for crew transportation. C3PO capability,” Yoder wrote in his 414 also began formulating draft Selection Statement. For example, requirements and standards for multiple companies’ proposals commercial crew safety.413 relied on ULA’s rockets to launch their vehicles and would be ULA Of the 36 companies that submitted customers, indicating a promising proposals by the September 22 market for the launch provider. deadline, 18 made it through the Step 1 evaluation screening, including Yoder also looked for “tangible test HMX Inc., a name familiar from or demonstration missions,” and NASA’s Alternate Access to Station aimed to include a variety of different effort in 2000. types of technology systems in the selection portfolio.415 NASA sought Eight were then selected as finalists to encourage the development of to continue to the next step of due capabilities widely applicable to a diligence: Ball Aerospace, , range of spacecraft. The Boeing Company, Paragon Space Development Corp., Sierra Nevada Based on these criteria, on Corp., Space Exploration Technologies December 8, 2009, five companies Corp. (SpaceX), United Launch were selected for funded Space Alliance (ULA), and XCOR Aerospace. Act Agreements. As in the COTS program, these awards were For Selection Authority Geoffrey to be paid in increments upon L. Yoder, discriminating factors the successful completion of included whether or not the the agreements’ predetermined proposal would advance technology milestones. The largest award for crew transportation within the went to the Sierra Nevada Corp., approximately one-year timeframe which received $20 million for the

88 CHAPTER 7 – FIRST STEPS TOWARD COMMERCIAL CREW development of the Dream Chaser his Assistant Project Executive Stokes spacecraft, the only proposed lifting McMillan, served as the NASA Project body system. The Dream Chaser Executive for Blue Origin and Sierra was originally developed by COTS Nevada. Donald W. Totton served competitor SpaceDev, Inc., which as the NASA Project Executive for Sierra Nevada acquired in 2008. Boeing, Paragon, and ULA, and later continued to support the Agency’s Next, Boeing received $18 million commercial initiatives in the Systems to develop the Crew Space Engineering and Integration Office of Sierra Nevada Transportation (CST)-100 capsule. the Commercial Crew Program. NASA cited Boeing’s “experience as a systems integrator and its previous In February and March 2010, all work on the NASA human spaceflight the CCDev SAAs were amended program,” as one of the reasons for to accommodate a three-month the company’s selection.416 Yoder extension of the milestone completion interpreted Boeing’s use of the dates. Sierra Nevada and Paragon existing rockets as a strength, completed their last milestones but in the COTS Round 2 competition in December 2010, and Boeing Boeing CST that took place in 2008, Selection completed its last milestone in Authority Richard Gilbrech saw this as February 2011. a weakness because Boeing would be dependent on an external supplier. Both the Blue Origin and Boeing SAAs were further amended to ULA, a joint venture between Boeing extend the deadline for completion and Lockheed formed in December of their CCDev milestones to April 2006, received $6.7 million for an 30, 2011. C3PO Manager Alan J. Emergency Detection System for Lindenmoyer signed the ULA letter human rating its launch vehicles. of completion on April 5, about three Blue Origin, a startup founded by weeks before the deadline, and Amazon.com, Inc. mogul Jeff P. Blue Origin had one uncompleted Bezos, was awarded $3.7 million for milestone remaining when its SAA its “pusher” Launch Abort System expired at the end of the month.418 and composite pressure vessels. Finally, Paragon Space Development With this first step toward the development of key technologies Corp. received $1.4 million for a new Blue Origin modular Environmental Control and needed for future crew transportation Life Support System.417 systems successfully completed, the Agency was ready to proceed with its According to the CCDev Space Act program to support more full-scale Agreements that were signed by development of commercial crew Yoder on January 30, 2010, all the vehicles. These five companies now companies’ milestones were originally had the opportunity to participate in scheduled for completion by August the CCDev2 competition announced of that year, giving participants a in October 2010 and awarded in April Paragon Space Development little over half a year to pursue their 2011. CCDev2 marked a change Five companies (above) entered into development programs. in strategy for NASA’s commercial funded NASA Space Act Agreements endeavors, as the Agency elected for Commercial Crew Development C3PO brought in two additional to administer its future commercial (CCDev). As with the COTS program, project executives to monitor and incremental funding was paid based programs from the Kennedy Space upon the successful completion of support these new commercial Center (KSC) in Florida. predetermined milestones. partners. Scott D. Gahring, aided by

CHAPTER 7 – FIRST STEPS TOWARD COMMERCIAL CREW 89 Commercial Crew Program

The new Commercial Crew Program (CCP) was established Credit: NASA/Robert Markowitz Credit: at KSC “to help the aerospace Kathryn Lueders, Acting Program Manager for NASA’s Commercial Crew Program (CCP), industry in the United States develop answered questions during an event held by CCP partner Boeing. Prior to this position, space transportation systems that Lueders worked closely with the C3PO team while she served as manager of the ISS can safely launch astronauts to Program’s Transportation Integration Office, responsible for the commercial cargo resupply missions to the International Space Station. She was also responsible for integration of the the International Space Station international partner vehicles traveling to the ISS. In her current role, Lueders oversees the (ISS) and other low-Earth orbit NASA CCP helping private companies to develop a new U.S. capability to carry astronauts destinations.”419 CCP began with two into low-Earth orbit and to eventually take crews to the International Space Station. follow-on commercial programs— Commercial Crew Development 2 that NASA was able to provide what (CCDev 2) and Commercial Crew it deemed the necessary oversight integrated Capabilities (CCiCap). for the safety of crewed systems. So although NASA has retained some The KSC-based office applied some elements of the model established of the model first enacted by C3PO, by the COTS team at JSC, in other including the use of funded Space Act areas it has found the need to revert Agreements, as well as partnerships to more traditional means of working with multiple, competing companies. with the private sector. In April 2011, CCDev 2 split $270 million between Boeing ($92.3 million), NASA anticipated that the resulting Sierra Nevada ($80 million), SpaceX commercial crew “space taxi” services ($75 million), and Blue Origin ($22 would be available by 2017.422 Credit: SpaceX Credit: The crewed variant of the SpaceX Dragon million) for further development of will have a capacity for seven seats and is their crewed systems. In August being designed with an advanced launch 2012, for the CCiCap Space Act escape system. The company has plans Agreements NASA narrowed these for a propulsive landing system to allow four competitors to three: Boeing for a gentle touchdown to the ground. ($460 million), SpaceX ($440 million), and Sierra Nevada ($212.5 million).420

However, reasoning that carrying humans, not just cargo to ISS was of a fundamentally different nature, the Commercial Crew Program at KSC chose to utilize traditional procurements contracts in addition to SAAs. In December 2012, NASA awarded Certification Products

Credit: Sierra Nevada Corp. Credit: Contracts (CPC) to Boeing, Sierra Boeing Credit: Developed by the Sierra Nevada Nevada, and SpaceX, in the amount Boeing’s Crew Space Transportation Corporation, the Dream Chaser will launch 421 (CST)-100 spacecraft floated to a vertically on an Atlas V rocket and of approximately $10 million each. landing during a parachute at automatically land horizontally on a runway. These FAR-based contracts ensured the Delamar Dry Lake Bed near Alamo, The reusable lifting-body spacecraft is Nevada. The CST-100 is designed to designed to carry a crew of up to seven transport people and cargo to the ISS. people to and from low-Earth orbit.

90 CHAPTER 7 – FIRST STEPS TOWARD COMMERCIAL CREW Legacy

From Contingency to Dependency The COTS Model: A New Way Conclusion

CHAPTER 8 – LEGACY 91 chapter 8 After eight years of operations, the NASA Commercial Crew & Cargo Program Office (C3PO) at the Johnson Space Center (JSC) succeeded in inaugurating a new era in spaceflight. With its Commercial Orbital Transportation Services (COTS) initiative, C3PO demonstrated that the space agency could rely on non-government providers for safe, reliable, and cost-effective cargo delivery services to and from the International Space Station. From 2005 to 2013, C3PO acted as an investor and advisor with three separate and distinct companies: Space Exploration Technologies Corp. (SpaceX) (from 2006 to 2012), Rocketplane Kistler (from 2006 to 2007), and Orbital Sciences Corp. (from 2008 to 2013). Although Rocketplane Kistler was unable to complete its milestones, both SpaceX and Orbital developed space transportation systems capable of resupplying the International Space Station (ISS) after Space Shuttle retirement. Less than a year after the last Shuttle flight, the first cargo transported by a U.S. commercial provider arrived at the ISS. In addition to these needed ISS resupply services, the COTS program saved taxpayer funds. While the space agency invested a total of about $788 million in partners’ development programs, industry provided the majority of funds (approximately $1 billion) for the two new launch vehicles, automated cargo carriers, and ground systems that resulted from the government-industry collaboration. The partnerships also provided a boost to the nation’s economy by creating jobs in the commercial space sector and enabled the U.S. to recapture a share of the global launch market. For the companies, the spacecraft developed as a result of the agreements gave them the opportunity to capitalize on potential new markets. “The commercial space industry will be an engine of 21st century American economic growth and will help us carry out even more ambitious missions,” said NASA Administrator Charles F. “Charlie” Bolden. “America’s best days in space exploration are ahead of us thanks to the grit and determination of those in government, and the private sector, who dare to dream big dreams and have the skills to turn them into reality.”423 From Contingency to Dependency At the time of the first COTS award new program called Constellation. in 2006, Agency officials at NASA Included in the plan was a relatively Headquarters in Washington, small piece of NASA’s mission: “to DC, envisioned that commercial pursue commercial opportunities for companies would take over low- providing transportation and other Earth orbit transportation services services supporting the International as a part of the overarching Vision Space Station and exploration for Space Exploration. Announced missions beyond low-Earth orbit.”424 in January 2004, this Vision put the nation on a path of exploration to the NASA Administrator Michel Griffin Moon, then on to Mars, with NASA allocated only $500 million, spread building powerful spacecraft for a over five years, of the Agency’s

92 CHAPTER 8 – LEGACY multi-billion dollar budget for the COTS program. Griffin intended that the vehicles developed under this initiative would help provide ISS resupply at the end of the Space Shuttle program. Because of the relatively small allocation, members of C3PO at JSC saw that COTS was somewhat “off the radar” for many policy makers in Congress. They understood the development of commercial transportation capabilities as a “side bet” or “back burner” option for ISS resupply.425 In other words, COTS was a “high- risk” contingency being pursued as a backup for the vehicles being developed under Constellation or the Agency’s international partner cargo resupply vehicles.426

However, by the spring of 2011, NASA reported to Congress that the Agency was “depending on our commercial cargo partners. We need their COTS development efforts to succeed so that they can begin providing cargo resupply to the International Space Station.” In simple terms, the commercial cargo providers were “too important to fail.”427 Credit: NASA/Bill Ingalls Credit: Although there is no clear consensus President Barack Obama toured the SpaceX processing facility in Cape Canaveral, Florida, along with founder and CEO of the company (right) Elon Musk, in April 2010. on when exactly Congress began On that trip, the President also spoke at the NASA Kennedy Space Center where he to take more notice, team members delivered remarks on the new course his administration was charting to maintain U.S. cited mounting delays within the leadership in human spaceflight. In his speech, the President emphasized partnerships Constellation Program as bringing with the private sector to “make getting to space easier and more affordable.” greater attention to the COTS program and its objectives.428 Then, President Barack H. Obama, A few years later the Obama inaugurated in January 2009, steered administration policy was The Commercial Resupply Services U.S. space policy on a different reemphasized in a statement released (CRS) contracts awarded in course by cancelling the Constellation by the White House Office of Science December 2008 were another Program in February 2010 and and Technology Policy: “The growing contributing factor. Under the terms placing significantly more emphasis on potential of America’s commercial of the CRS contracts, Orbital was commercial space activities. Obama space industry and NASA’s use of awarded a contract worth $1.9 billion directed Bolden, the new NASA public-private partnerships are central to deliver 8 flights of cargo to ISS. Administrator, to lead a program that to President Obama’s strategy to SpaceX was awarded a contract would send astronauts to an ensure U.S. leadership in space worth $1.6 billion for 12 CRS delivery by 2025 instead of returning to the exploration while pushing the bounds flights using its capsule-shaped Moon, and facilitate the emergence of of scientific discovery and innovation Dragon spacecraft. a commercial space industry. in the 21st century.”429

CHAPTER 8 – LEGACY 93 Utilization of is “a gap that’s just now being the International closed” after the retirement of the Space Station Space Shuttle in July 2011.433

The U.S. segment of the ISS was In addition to using the commercial officially designated a National Lab in vehicles for NASA experiments, the NASA Authorization Act of 2005, advocates of this new way of doing and since then both Congress and business, including William H. “Bill” NASA have emphasized maximizing Gerstenmaier, NASA’s Associate the Station as a scientific research Administrator for Human Exploration platform once assembly was and Operations, stated how the ISS completed in May 2011. The COTS can serve as a gateway market for commercial partners have become private science customers to follow.434 “essential to ensuring the capacity to ferry experiments to and from the Stimulating the Station” with their new low-Earth orbit NASA/Bill Ingalls Credit: Commercial Use Lori Garver, NASA Deputy Administrator, 430 transportation systems. All current of Space and Robert T. Bigelow, President and and planned U.S. experiments founder of stood next aboard the Station will be facilitated In August 2011, NASA signed a to the mock-up of the Bigelow Expandable in some way by a CRS mission and a cooperative agreement with the Center Activity Module (BEAM) during a media briefing on January 16, 2013. At this COTS partner.431 for the Advancement of Science in event, Garver announced that NASA Space (CASIS), tasking the nonprofit had awarded a $17.8 million contract to ISS Transportation Integration to manage non-NASA research on Bigelow Aerospace to provide a prototype Office Manager Kathryn L. Lueders the ISS. CASIS is now working to find of the expandable habitat to be added reflected on how the SpaceX Dragon on the ISS for a two-year technology commercial opportunities for Station spacecraft has been able to not demonstration. The expandable habitat by marketing the Station’s capabilities only transport additional supplies is scheduled to arrive at the International to the science community and Space Station in 2015. to Station—graduating from more using the organization’s established basic internal pressurized cargo to contacts to “match investors and the addition of external pressurized low-Earth orbit activities were funded researchers.”435 Proposals submitted items and powered units for storing by pharmaceutical companies, freeing for Station must meet both scientific scientific experiments and samples— NASA to explore beyond.438 and economic criteria, i.e., market but also return some of these back viability—the same dual criteria used to Earth. By the fourth CRS mission, NASA also has announced plans to select the COTS commercial SpaceX planned to transport live to expand the International Space partners. NASA has also collaborated mice and rats to Station, a capability Station itself in the near future. with NanoRacks, a venture that has not available on existing Progress, In January 2013, NASA signed a been successful selling small payload ATV, or HTV vehicles.432 contract with Bigelow Aerospace, accommodation on, and small satellite founded by Budget Suite Hotels 436 Former ISS Program Manager launches from ISS. executive Robert T. Bigelow, to Randolph H. Brinkley similarly develop an inflatable Ideas for commercial research applauded the Station’s new that is scheduled to begin a two- on ISS have focused particularly capabilities for scientific inquiry. year trial attached to ISS as early as on pharmaceuticals research that In fact, Brinkley cited his concern 2015. Bigelow contracted SpaceX can benefit from microgravity for the scientific utility of the to launch the Bigelow Expanded experiments, such as new vaccines ISS without reliable up- and Activity Module (BEAM) on a Falcon and learning from changes in gene downmass capability as one of rocket.439 As the market in low-Earth expression that occur in space.437 the primary reasons he joined the orbit matures, commercial space Gerstenmaier foresaw a future in Rocketplane Kistler venture as its companies have begun buying which these experiments aboard president. He stated that this services from one another. Station became so valuable that all

94 CHAPTER 8 – LEGACY Free-Fliers in a healthier, more competitive industrial Low-Earth Orbit The COTS base … while creating new markets, new industries, and new jobs in order Phil McAlister, NASA Director Model: A to advance our national security and of Commercial Spaceflight economic future.”444 Development, observed that the New Way government’s investment resulted Both the SpaceX and Orbital low- in “two low-cost launch vehicles, The COTS model developed and Earth orbit transportation systems two autonomous spacecraft successfully executed by C3PO were developed with a total NASA capable of delivering cargo and has proven an example of a new COTS investment of just $788 million two privately developed launch way for how NASA can cooperate ($500 original funding plus $288 facilities,” providing a “very with private industry. In addition to million fiscal year 2011 augmentation). robust U.S. domestic cargo providing the space agency with C3PO achieved maximum use of its 440 transportation capability.” a needed service to fulfill its mission limited budget by allocating over 93 to the ISS, innovative partnerships percent of funds to partner milestone The COTS partners plan to use can benefit the government by payments, with the rest dedicated this newly-developed capability achieving maximum return on to program management, technical to offer microgravity services to investment from taxpayer funds. support, and overhead. the pharmaceutical industry and other markets in addition to the Key features of the COTS model And, by the end of the COTS ISS. SpaceX has marketed the include limited NASA oversight, a program, NASA had provided less DragonLab free-flier variant of its flexible and streamlined acquisition than one half of the cost for the orbital spacecraft to customers in process, and fixed-price incentives to commercial transportation systems’ the science community to house hold cost and schedule. Lindenmoyer development and demonstration, as 441 experiments in microgravity. expanded on these and other key seen in the figures below. Note that features of this form of public-private the government investment for Orbital Orbital officials have seen possibilities partnerships in a white paper that is includes funding sources other than for using the Cygnus capsule to sell included in the Appendix. COTS that were contributed toward “hosted payloads” to NASA and the launch and ground facilities at other government scientists. (In its Wallops Island, VA.445 current form, Cygnus can only send Return on Investment data back to Earth because the The NASA Air Force Cost Model In 2011, NASA Deputy Administrator capsule is destroyed upon reentry to (NAFCOM) estimate for the cost to Lori B. Garver emphasized how the Earth’s atmosphere.) Potential Orbital develop the SpaceX Falcon 9 vehicle, Agency was “working to invest the customers include researchers at based on the NASA environment Nation’s valuable tax dollars to assure the NASA Glenn Research Center and culture, ranged from as low studying how fire behaves in zero gravity conditions.442

According to Robert T. “Bob” SpaceX COTS Orbital COTS Richards, Orbital Vice President of Human Spaceflight Systems, the company also looked into the SpaceX Government Orbital Government potential to use components of $454M $396M $590M $425M the Cygnus capsule for “adjacent 53% 47% 58% 42% markets,” for example utilizing the rendezvous sensors and technology for eventual satellite servicing.443

Government funding sources provided less than one half of the cost for the development and demonstration of two commercial transportation systems.

CHAPTER 8 – LEGACY 95 as $443 million to as high as approximately $4 billion.446 However the final cost for developing and demonstrating the Falcon 9 rocket was only about $400 million—up to 10 times less than projected.447 Lisa P. Price, ISS Resources Branch Chief at JSC, reported that NASA was then able to acquire these U.S.-based cargo transportation services at a significantly lower cost than previous Space Shuttle flights.448

In a June 2009 report, the Government Accountability Office commended C3PO for its responsible use of government monies. Particularly noted was the very small percentage of the program’s budget applied to management and overhead. The report also found that C3PO “adhered to critical project management tools and activities,” describing how the COTS program did a creditable job of identifying, documenting, and mitigating risks; communicating with the commercial partners and providing them technical expertise; and by adhering to the established system of fixed-price milestone payments.449

Job Creation

The development of U.S.-based space transportation systems funded by the over $1 billion of combined government and industry funding of COTS encouraged job and economic growth in the domestic aerospace industry. For instance, in just one day in January 2013 SpaceX hired 90 new employees at its Hawthorne, California headquarters.450 In July 2013, the Silicon Valley Business Journal reported that Credit: SpaceX Credit: SpaceX completed its milestones for the COTS partnership with its C2+ mission, launched on May 22, 2012, from Cape Canaveral, Florida. Since then, SpaceX has captured a share of the global satellite launch market using the Falcon 9 developed under COTS.

96 CHAPTER 8 – LEGACY SpaceX was looking for 200 additional employees to complement its 3,000 member team.451

On the East Coast, the Mid-Atlantic Regional Spaceport (MARS) utilized by Orbital Sciences Corp. for the launches of its Antares rocket has been credited for significant economic impact, as part of the overall Virginia space industry that “contributes $7.6 billion in annual direct economic output and directly supports 29,638 jobs.”452 Maryland Senator Barbara A. Mikulski estimated that the Orbital missions to deliver cargo to ISS would bring 500 additional jobs to the Eastern Shore.453

Launch Markets

From its inception, one of the objectives of COTS was to “create a market environment in which commercial space transportation services are available to government and private sector customers.”454 As Sumara Thompson-King, NASA Deputy General Counsel, explained, “We didn’t view COTS as just supporting NASA. We thought that there would be other entities, both in the government and in the commercial sector, that would use those services.”455

While the space agency remains the only customer of low-Earth orbit delivery services, both SpaceX and Orbital have been able to sell launch services to customers outside NASA and the government.456

The question of U.S.-based launch capability was an important one for Marc G. Timm, COTS Program

Executive at NASA Headquarters, NASA/Bill Ingalls Credit: Orbital Sciences Corp. launched its Antares rocket and Cygnus cargo spacecraft towards the International Space Station on September 18, 2013, from the Mid-Atlantic Regional Spaceport, NASA Wallops Flight Facility, Virginia. In addition to providing commercial logistics to ISS, Antares is a new launch vehicle to help the United States compete in the global launch services market.

CHAPTER 8 – LEGACY 97 who observed that the availability of commercial rockets has allowed the U.S. “to become more globally competitive in the launch market.”457 Timm observed that the United States dominated the launch market in the 1980s, but by 2011 the U.S. government was the only purchaser of domestic launch services. The availability of the SpaceX Falcon and Orbital Antares rockets has the potential to bring some of those launches back to the U.S., along with some satellite manufacturing capabilities that have been outsourced in order to avoid the complications of dealing with U.S. International Traffic in Arms Regulations restrictions.458

As evidence of the growing domestic launch market, SpaceX has found both military and commercial customers for its Falcon 9 launch services—even prompting European- based Arianespace to increase the lift capacity of its rocket to make it more cost competitive.459 The Pentagon’s $900 million award of indefinite-quantity, indefinite-delivery contracts to Lockheed, Orbital, and SpaceX made headlines in December 2012, as a significant contract awarded to the COTS partners.460

In addition to this military contract, Orbital hopes to find new customers for Antares, particularly those that previously would have used the phased-out Delta II rocket. The Both COTS commercial partners reached their goal of providing cargo transportation systems that could resupply the ISS. (Top photo) In May 2012 the Dragon spacecraft company has also contracted launched on the SpaceX Falcon 9, separated from the rocket, then traveled to the secondary launch payloads on International Space Station, where it was grappled and berthed to the Harmony node Antares missions to ISS.461 on May 25. (Bottom photo) Sixteen months later, Orbital Sciences Corp. launched its Antares rocket on September 18, 2013 with the Cygnus cargo capsule that moved into a low-Earth journey to the ISS. The cargo vehicle was berthed to the International Space Station 11 days later, staying 3 weeks before being released. The deliveries signified the end of the COTS agreements; now, both companies use the systems built under COTS to bring supplies to the ISS as part of NASA’s Commercial Resupply Services contracts.

98 CHAPTER 8 – LEGACY an important and demonstrable role a Partnership Integration Council, Conclusion in the burgeoning commercial space chaired by the Deputy Administrator, transportation market. to foster consistent guidance, Throughout the first five decades governance, and processes across of the U.S. space program, the In its 2013 Annual Report, the NASA the Agency when considering new space transportation systems NASA Aerospace Safety Advisory Panel industry partnerships.469 depended on to pursue its goals (ASAP) led by Vice Admiral Joseph W. of exploration were owned and Dyer, USN (Ret.) included statements Building on the successful legacy of operated by the government. Space emphasizing the success of the COTS COTS, in early 2014, NASA’s Human policy analyst Jeff Foust observed program. The report pointed out that Exploration and Operations Mission that, “For a long time … we’ve seen it “was not simply the use of fixed- Directorate began several initiatives a lot of promises and PowerPoint price Space Act Agreements that led to continue partnerships with the presentations about proposed to the Program’s success, although commercial space industry, including (private) spacecraft,” continuing, that helped to enable the successful Lunar Cargo Transportation and “Now we’re seeing those PowerPoints outcome. Rather, NASA did a number Landing by Soft Touchdown (Lunar turn into actual hardware.”462 of things right along the way, such CATALYST) opportunities to spur as maintaining excellent program commercial cargo transportation Only time will tell if this most recent management, appointing well-qualified capabilities to the surface of the moon, surge of promising activity in the technical representatives [as project and Collaborations for Commercial private spaceflight sector will executives], providing the right amount Space Capabilities (CCSC) to help produce the much-awaited thriving of insight, requesting the right amount pioneer paths to Mars and other deep commercial space transportation of information, and having the right space destinations. industry. However, there are some number of Government attendees at indicators pointing to an optimistic industry meetings.”466 Though not complete, commercial future. Anticipating the commercial space advocates have witnessed a space industry’s growing momentum, Calling the COTS program “extremely “victory” in the NASA cultural change Embry-Riddle Aeronautical University successful,” the ASAP agreed that in progress.470 In the words of NASA offered the first degree program in while it would not be appropriate for Deputy Administrator Lori B. Garver, Commercial Space Operations in every government program to use a NASA is “like a big ship and we don’t the fall of 2013.463 And, a report by COTS-type management philosophy, turn easily, but when we do it’s also the stated that “we would encourage NASA (and hard to turn back. This program, the world space economy grew 6.7 other Government agencies) to while just a teeny-tiny fraction of our percent from 2011 to 2012, especially consider adopting similar approaches budget, has caused a shift in Agency in the area of commercial space where possible.”467 thinking, and hopefully the thinking of infrastructure and support.464 all of us about how we’re going to go NASA Headquarters acknowledged forward in space.”471 With this initial success achieved, the this new way of business by revising direction of commercial enterprise NASA Policy Directive (NPD) 1000.5, Said Lindenmoyer, “NASA knows in space still contains unforeseen the Policy for NASA Acquisition, to all too well there will be failures and market potential. As Harvard recognize the role that partnerships setbacks ahead. But we also know Business School professor Clayton can play in meeting the space that through the trusted partnerships M. Christensen observed in his agency’s mission needs. This new we have forged with our industry book The Innovator’s Dilemma, “Not approach required NASA to “consider colleagues, problems will be solved only are the market applications for the full spectrum of acquisition and a new era in commercial space disruptive technologies unknown at approaches,” including procurement, will begin.”472 the time of their development, they grants, cooperative agreements, and are unknowable.”465 What is known Space Act Agreements.468 NASA at this stage is that COTS has played has also taken steps to establish

CHAPTER 8 – LEGACY 99 Volume 24, Issue 49

Three months after the last COTS demonstration mission, SpaceNews printed the above editorial, calling COTS a success and stating that the two partners were “well on their way to securing the program’s legacy as a winner for both government and industry.”473 The figure of $850 million includes the total of approximately $800 million received for the COTS cargo demonstrations, plus the $50 million allocation for the Commercial Crew Development (CCDev) Program.

100 CHAPTER 8 – LEGACY Appendix

Acknowledgments COTS Model for NASA Public-Private Partnerships Chronology COTS Oral History Interviews Bibliography Endnotes

APPENDIX 101 appendix Acknowledgments

NASA Commercial Crew & Cargo Program Office (C3PO) acknowledges and thanks the following for providing the use of images for this publication: Gary C. Hudson, Alan Marty, George Nield, Boeing, Orbital Sciences Corporation, Sierra Nevada Corp., SpaceX, Thales Alenia Space. Also, from C3PO Team members: Alan Lindenmoyer, Valin Thorn, Dennis Stone, Mark Erminger, Warren Ruemmele, and Kevin Meehan. Photo credit is noted on images; all others are from a NASA imagery repository.

C3PO thanks Perry Jackson of the JSC Graphics group for his design of this book; and to John Bretschneider and Todd Hegemier for their assistance in gathering information.

102 APPENDIX But we have not seen the growth of the commercial COTS Model for space transportation industry as we have with the first 50 years of commercial aviation. The commercial space NASA Public-Private communications sector has grown into a thriving multi- billion dollar industry and we have purchased commercial Partnerships launch vehicles and payload services for many years now. The transportation of people to space remains an Alan Lindenmoyer ambitious goal only achieved by due to Manager, Commercial Crew & Cargo Program extreme cost and risk barriers. April 18, 2010 Since NASA blazed the trail for human spaceflight and the technology exists, the question becomes can industry Background capitalize on this opportunity if NASA seeds the market with funding to reduce the cost barrier and offers the In 2004, President Bush established the U.S. Space space station as a predictable and reliable market for Exploration Policy which called for a return to the moon the transportation services? Perhaps with a substantial by 2020 and the Space Shuttle to be retired by the end Government investment, NASA experience, and the of 2010 after completion of the International Space promise of follow-on contracts, the industry will grow Station (ISS) assembly. Since the shuttle was planned similarly to what was seen in the late 19th and early 20th to provide routine crew rotation and cargo resupply centuries with railroads and aviation. services throughout the service life of the station, this led to a shortfall of ISS resupply capabilities and a gap The premise of what became known as Commercial in U.S. human spaceflight. The Progress, HTV, and ATV Orbital Transportation Services, or COTS, is different than International Partner cargo transportation capabilities the commercialization of a NASA technology transfer. were no longer sufficient to meet the logistics needs of COTS challenges American industry to develop, own, and the station and the ISS would become dependent on the operate their own space transportation systems that could Russian Soyuz vehicles for crew rotation and rescue until be suitable for use by NASA and other customers. NASA the Constellation vehicles became operational. would define the needs and safety expectations of the transportation service, but commercial companies would Soon after Mike Griffin became the new NASA define the concept of operations and all of the detailed Administrator in 2005, he challenged U.S. private industry requirements and specifications for the entire system to develop cargo and eventually crew space transportation including ground operations, launch, orbital operations, capabilities that could meet the needs of the ISS. The reentry, and recovery. NASA would become a true partner Administrator established the Commercial Crew & Cargo in the commercial venture to provide specific expertise, Program Office (C3PO) at JSC under the Exploration lessons learned, and other requested information. We would Systems Mission Directorate (ESMD) and allocated $500 also make our vast infrastructure of facilities and laboratories million over five years to stimulate the development available on a marginal cost reimbursable basis. and demonstration of commercial capabilities. Once demonstrated, NASA would purchase the emerging The purpose of this paper is to define what is meant by services to meet the U.S. obligations for servicing the ISS commercial in the context of a space transportation system soon after the shuttle was retired in 2010. acquisition and the key features of what became the COTS model for NASA public-private partnerships. Introduction U.S. Space Laws and Policies For over 50 years NASA has been the vanguard of human spaceflight. From the first flights of Mercury to a Since it was NASA’s intent to ultimately purchase permanent presence on the International Space Station, commercial transportation services, as opposed to a NASA and its industry partners have pioneered some of Government developed capability, the C3PO acquisition the greatest accomplishments in history. The resulting planning team researched the Federal Acquisition technology spinoffs coupled with American and Regulations (FAR) and other U.S. laws and policies for entrepreneurial opportunities have transformed our world. guidance on how to structure the acquisition. The key These spinoffs are typically what come to mind when one findings from this research are as follows. speaks of the commercialization of space technology.

APPENDIX 103 According to the Commercial Space Act of 1998, (3) Any item that would satisfy a criterion expressed in paragraphs (1) or (2) of this definition, but for— …the Federal Government shall acquire space transportation services from U.S. commercial providers whenever such services (i) Modifications of a type customarily available in the are required in the course of its activities. commercial marketplace; or …space transportation services shall be considered to be a (ii) Minor modifications of a type not customarily commercial item. available in the commercial marketplace made to meet Federal Government requirements. Minor modifications The law allows exceptions to these requirements if the means modifications that do not significantly alter the nongovernmental function or essential physical characteristics Administrator determines that… of an item or component, or change the purpose of a (1) a payload requires the unique capabilities of the process. Factors to be considered in determining whether a Space Shuttle; modification is minor include the value and size of the modification and the comparative value (2) cost effective space transportation services that meet and size of the final product. Dollar values and percentages specific mission requirements would not be reasonably available may be used as guideposts, but are not conclusive evidence from United States commercial providers when required; that a modification is minor; (3) the use of space transportation services from United (Note: only items 1-3 were excerpted here for brevity.) States commercial providers poses an unacceptable risk of loss of a unique scientific opportunity; The FAR Part 12 goes on to prescribe the procedures for (4) the use of space transportation services from United the acquisition of commercial items which includes the States commercial providers is inconsistent with national security objectives; use of firm-fixed price contracts and other provisions to (5) the use of space transportation services from United streamline the acquisition process. States commercial providers is inconsistent with international agreements for international collaborative efforts relating to The Commercial Space Launch Act (as amended in 2004) science and technology; is also relevant to commercial space acquisitions. The (6) it is more cost effective to transport a payload in conjunction purpose of this law is… with a test or demonstration of a space transportation vehicle owned by the Federal Government; or (1) to promote economic growth and entrepreneurial activity through use of the space environment for peaceful purposes; (7) a payload can make use of the available cargo space on a Space Shuttle mission as a , and such (2) to encourage the United States private sector to provide payload is consistent with the requirements of research, launch vehicles, reentry vehicles, and associated services by - development, demonstration, scientific, commercial, and (A) simplifying and expediting the issuance and transfer of educational programs authorized by the Administrator. commercial licenses; (B) facilitating and encouraging the use of Government- These exceptions allowed NASA to use the Space developed space technology; and Shuttle and International Partner vehicles for servicing the (C) promoting the continuous improvement of the safety ISS throughout the assembly phase. However, with the of launch vehicles designed to carry humans, including promise of emerging new U.S. commercial capabilities, through the issuance of regulations, to the extent permitted by this chapter; the Administrator determined that these exceptions may no longer apply after the ISS construction is completed (3) to provide that the Secretary of Transportation is to oversee and coordinate the conduct of commercial launch and reentry and the shuttle is retired. This law defines U.S. commercial operations, issue permits and commercial licenses and transfer providers to be more than 50% owned by U.S. nationals commercial licenses authorizing those operations, and protect or a subsidiary of a foreign company subject to certain the public health and safety, safety of property, and national security and foreign policy interests of the United States; and conditions determined by the Secretary of Transportation. (4) to facilitate the strengthening and expansion of the United States space transportation infrastructure, including the The team then turned to the FAR which defines a enhancement of United States launch sites and launch-site commercial item to mean … support facilities, and development of reentry sites, with (1) Any item, other than real property, that is of a type Government, State, and private sector involvement, to support customarily used by the general public or by non-governmental the full range of United States space-related activities. entities for purposes other than governmental purposes, and— Item 3 is a key aspect of this law since historically most (i) Has been sold, leased, or licensed to the general public; or NASA missions were declared to be carried out by and for (ii) Has been offered for sale, lease, or license to the general public; the Government and not subject FAA licensing. (2) Any item that evolved from an item described in Other important national policies and law include the U.S. paragraph (1) of this definition through advances in technology or performance and that is not yet available in the commercial Space Transportation Policy of 2005 which emphasizes use marketplace, but will be available in the commercial of launch vehicles manufactured in the U.S.; the National marketplace in time to satisfy the delivery requirements Space Policy of 2006 which reiterates U.S. commitment under a Government solicitation; to encouraging and facilitating a growing entrepreneurial

104 APPENDIX U.S. commercial space sector; and the Iran, North Korea, are available to Government and private sector customers. and Syria, Nonproliferation Act (INKSNA) which restricts The vision would extend by the purchase of Russian space systems supporting the ISS enabling an expanding and robust U.S. commercial space (restrictions currently waived through July 2016). transportation industry. If successful, NASA’s expanded vision and mission to reduce the cost of access to space These laws and policies form the governing framework that could open new markets and seed a vibrant and thriving must be addressed when planning any commercial space new industry for the long term benefit of all Americans. acquisition for NASA. Of course NASA would also directly benefit by freeing up encumbered resources that could be refocused on the Acquisition Approach more difficult challenges of human exploration beyond LEO.

The acquisition team determined that the cargo or crew After receiving positive and constructive feedback from transportation services needed to service the ISS were industry endorsing the proposed new acquisition approach, not yet available in the marketplace as a commercial item the C3PO conducted COTS competitions where companies from U.S. commercial providers. Although launch services could bid on the development and demonstration on any have been sold to the general public for many years, the combination of the following four basic space transportation additional capabilities necessary to deliver payloads to and capabilities to service a human destination in LEO. from a human destination in low-Earth orbit (LEO) were Capability A: the delivery and disposal on unpressurized/ not yet offered for public sale. The necessary complex external cargo, B: the delivery and disposal on pressurized/ technologies such as automated rendezvous and docking internal cargo, C: the delivery and return of pressurized/ among other things, were under development and test, internal cargo, and D: crew transportation. In order to fund but were not at the maturity level needed to be purchased the maximum number of companies possible with the under a firm-fixed price commercial service contract. limited funds available, NASA required the demonstration of cargo capabilities before crew. The crew proposals would At this point the team decided to pursue the acquisition become options to the SAA should NASA receive additional of commercial space transportation capabilities in two funding and elect to exercise the option at some later phases. The first phase would be a period of development time. The demonstrations would culminate with an orbital and demonstration to enable and accelerate advances in flight demonstration of the selected capabilities. The ISS technology such that the emerging capabilities could evolve was offered as a test bed and orbital destination for these and become available in time to satisfy the Government capabilities if companies chose to meet the ISS visiting needs. This would then meet the second condition for the vehicle requirements. In addition to financial payments definition of a commercial item as described in the FAR based on the successful achievement of pre-negotiated definition above and enable the subsequent purchase of milestones, companies awarded SAAs would also receive services in a follow-on second phase. NASA technical expertise to assist with ISS integration and share knowledge, experience, and lessons learned over our In the first phase, NASA decided to take on the role of an 50 years of human spaceflight. investor, technical consultant, and partner instead of a traditional Government customer that pays full development The resulting funded SAAs represent a new way of doing costs and fees to a prime contractor. Since NASA did not business with the private sector. The COTS model for intend to purchase any goods or services in the first phase public-private partnerships is fundamentally different than of the program, the C3PO used NASA’s other transaction traditional Government contracting in many ways. Since the authority in the form of funded Space Act Agreements outcome cannot be assured, it has advantages and risks (SAA) as the optimal legal instrument to provide financial that must be carefully assessed before a determination and technical resources to commercial companies. is made on whether or not this approach is suitable for a specific acquisition. As the mission of the program became clear, the C3PO established the following three major program objectives: 1) implement Space Exploration policy with investments to Features of the COTS Space stimulate the commercial space industry, 2) facilitate U.S. Act Agreements private industry demonstration of cargo and crew space Most of the terms and conditions of the COTS SAAs were transportation capabilities with the goal of achieving safe, specially crafted to optimize the commercial development reliable, cost effective access to low-Earth orbit, and 3) nature of the agreements for the mutual benefit of NASA create a market environment where commercial services and the commercial partners. The ability to customize

APPENDIX 105 the agreements for this specific purpose is perhaps the to apply corporate research and development funds single largest advantage of the SAA. But NASA must first to bring a product to market. NASA learned to think determine that no other legal instrument including, but not like an investor when soliciting and evaluating the limited to; procurement contracts, grants, and cooperative COTS proposals. A successful venture requires a agreements are appropriate for the stated purpose. The company to have a solid value proposition, a strong primary purpose of the COTS agreements is to stimulate business case, and the financial and intellectual capital the commercial space industry to develop and demonstrate necessary to be the first to market or capture a share innovative, cost effective space transportation capabilities. of an existing market. We expected companies to have The agreements are for demonstrations and not for the “skin in the game” in order for us to share the cost risk acquisition of goods or services. as a lead investor. The degree to which companies were willing and credibly able to contribute financially The key features and advantages of the COTS SAAs to the demonstrations was an important factor in the are as follows: selection. The selected COTS companies committed several hundred million dollars in addition to NASA’s 1) Enables a portfolio investment in multiple, diverse funding which further enabled our ability to invest in commercial partners. multiple companies. The investment in this context is analogous to the risks 3) Enables known/limited cost risk using pay for versus rewards inherent in any financial portfolio. As performance milestones. in most financial investments, there is no guarantee that a return will be provided, but a diversified portfolio The COTS SAAs utilize a series of pre-negotiated increases the chances of a positive outcome over time. milestones as the sole basis for performance evaluation NASA’s strategy in COTS was to enable the ability to and incremental payments. Upon award, NASA agreed fund a range of companies including large, established to pay up to a fixed maximum amount over the life of companies representing lower technical risk balanced the agreement thereby establishing a known and limited by small or emerging companies with higher risk. The financial risk. The SpaceX SAA includes 22 milestones expectation was that if successful, the higher risk for payments totaling up to $278M. The Orbital SAA companies could result in a transformational payoff by includes 19 milestones totaling up to $170M. The offering significantly lower service prices. A balanced milestones measure key progress events throughout portfolio would also allow NASA a greater chance to the design and development cycle and are typically invest in multiple companies since NASA’s contribution spaced at least one per quarter. The milestones include to the development costs for small companies would a clear and concise description of the event, objective likely be less than that required of large businesses. success criteria, and a planned completion date to Funding the maximum possible number of companies enable an easy assessment of technical and schedule was a key risk mitigation strategy in COTS since it progress. Payments are made after NASA determines is common in high risk ventures that only the best that the milestone was completed in accordance with and strongest companies will survive and succeed. the established success criteria. This clear and simple Companies were selected based on NASA’s level of payment process avoids subjective cost and fee confidence in their ability to meet both the technical evaluations and simplifies fiscal year budget planning. goals as well as the execution of their business plan. More importantly, since NASA’s contribution is capped In contrast, FAR contracts are typically evaluated and at a pre-negotiated maximum limit, any overrun at any scored based on the degree to which companies point in the project becomes the responsibility of the meet a definitive set of requirements as well as past commercial partner. NASA’s milestone payments remain performance and cost. This would most likely favor fixed regardless of the actual costs incurred by the companies with lower overall risk and those with a company. Regarding schedule delays, the milestones history of doing business with Government. were initially defined as events only but completion dates were added during negotiations so a planning 2) Leverages NASA investment with additional company baseline could be established. According to the terms provided capital. of the SAA, once a milestone is missed, NASA must The COTS SAAs require that NASA not be the ascertain the cause of the failure and determine if only source of funding necessary to complete the additional efforts are in the Government’s best interest. demonstrations. As with most new business ventures, Delays in completing the milestones are not sufficient companies typically seek financial investors or approval cause for termination as long as NASA determines that

106 APPENDIX reasonable progress is being made. It should also be of the few organizations in the Government granted noted that NASA recognized the schedules proposed other transaction authority to enter into agreements by the COTS partners were extremely aggressive and outside the FAR. If and only when no other instrument delays would be expected. is deemed appropriate, NASA can utilize this authority to carry out its mission. Because the use of SAAs was 4) Mitigates cost impacts due to evolving requirements. deemed most appropriate for COTS partnerships, this has allowed NASA to streamline the acquisition and One of the most elegant features of a funded SAA execution process. Reducing some of the so called partnership in a design and development environment “red tape” and other requirements for doing business is that the system requirements are permitted to evolve with the Government has leveled the playing field. and mature without the constant administration of The COTS competitions were structured such that contract change orders and equitable adjustments. large, established companies with a long history of Since NASA only provided top level system performance Government contracts could compete equally and fairly goals and objectives, representative of one customer’s with small, even startup emerging companies who have needs for such services, this allowed companies to little or no experience with Government acquisitions. freely innovate and optimize their system throughout For example, instead of evaluating a company’s past the design cycle. Instead of constantly evaluating and performance on similar work, NASA focused on the independently analyzing system performance against skills and demonstrated abilities of the management detailed design requirements and specifications NASA team proposed to lead the effort. While still assuring typically applies on a contract, NASA monitors the federal funds are awarded fairly and are disbursed under progress of the design to assure that the system is strict control, the flexibility of the SAAs enabled each being built and tested in accordance with the original step of the process to be specially tailored. This resulted scope of the agreement. Even the ISS safety and in decreased overhead costs to both the Government interface requirements have evolved over time with and the commercial partner and a streamlined mutual agreement. Since the inception of the SAAs, acquisition schedule. NASA has processed over 70 changes to the COTS Interface Requirements Document (IRD) without a single 6) Simplifies program management/oversight with objective dollar of equitable adjustment. The reason for this is milestone success criteria. commercial companies volunteered to meet the IRD in their COTS proposal. The ISS was offered, but not Because the milestones listed in the SAAs are the sole required to be used as the orbital flight destination. basis for monitoring progress and making payments Companies serious about producing a transportation to the commercial partner, this greatly simplifies and system with NASA as a reliable customer took on the streamlines program management. The C3PO employs challenge of meeting the ISS requirements for the best only 14 direct and matrixed personnel to oversee possible opportunity to be awarded a lucrative service and manage the two COTS SAAs and five recently contract. Also over these last four years, the SAAs were awarded Commercial Crew Development SAAs which only modified six times to document mutually agreeable also used the COTS model. These include program / content changes, again without any adjustment in total project managers and deputies, program integration, payments. It is highly doubtful that NASA would be safety, procurement, financial, and administrative able to achieve the flexibility of implementing these type personnel. Additional insight is gained during informal changes without cost adjustments under a contract. day to day communications with the partners as well as more formal quarterly program management 5) Enables streamlined/flexible acquisition process. reviews, but the official basis for assessing progress and making payments are the SAA milestones. The Government acquisitions under the FAR are designed milestones form the basis for NASA’s limited program to assure federal funds are awarded fairly and are oversight responsibilities. The program also budgets disbursed in strict accordance with a contract terms and for approximately 10 additional FTE to provide specific conditions. The regulations typically require contracts technical expertise as needed from the NASA centers to contain certain standard clauses regarding specific and procured program technical support. reporting requirements and deliverables, systems to validate contractor costs, and other paperwork and 7) Minimum requirements encourage innovation processes to provide the necessary and appropriate and enables reduced/appropriate level of NASA controls on such a massive system. NASA is one oversight/insight.

APPENDIX 107 NASA holds ourselves accountable for the validation intellectual property developed by companies under and verification of each and every requirement we the agreements. Similarly, the Government will not take impose on our contractors. Many thousands of title to property acquired or developed using funding requirements are typically invoked on any complex provided under the agreement. These provisions assure space system development. Ultimately, NASA certifies companies will retain the benefit of their investment and that the requirements have been met to our satisfaction further encourages the development of the commercial and the system is ready for its mission. This system space industry. If however, the agreements are of checks and balances provides us with the highest terminated for failure to perform, NASA may exercise all assurance of mission success but at the expense rights to property and data. of a large workforce, cost, and schedule. Indeed it is this experience and expertise behind each of our 10) Limited termination liability. requirements that make up the incredible workforce Unlike most contracts, NASA may not unilaterally NASA employs today. The COTS model seeks to terminate the agreements for the convenience of the minimize the firm system performance requirements Government. In other words NASA cannot walk away leaving the commercial partner responsible for the from the agreement except for reasons that are beyond flow down and verification of most all requirements. our control (such as failure of Congress to appropriate By sharing our needs as a primary, but not necessarily sufficient funding). Likewise, the commercial partners the only customer early on, commercial partners are are obligated to meet the terms and conditions of free to optimize their systems to best fit their business the agreements or they will be terminated for failure case. Because the level of insight is driven by our to perform. If the Government is forced to unilaterally mutual goal of helping the partnership succeed, terminate, the maximum financial liability shall not exceed NASA is able to closely manage and prioritize the the total amount of the next milestone. The agreements level of technical support we provide. The ISS safety also allow for mutual agreement to terminate if ever and interface requirements are an exception to this needed. These limited termination provisions were found approach. The closure of ISS requirements requires to be very important and advantageous to companies close oversight and must be verified by NASA to seeking additional outside investments. the same extent as any of our other contracted requirements. Even so, ISS requirements number into 11) FAA licensing/liability/indemnification/enforcement. the hundreds, not thousands and NASA is able to accomplish the necessary oversight function with a The COTS flight demonstrations are not NASA missions much smaller number of people. carried out by and for the Government and therefore fall under the FAA licensing regulations. The FAA is directed 8) Maximizes incentive to hold cost and schedule. by law to encourage and promote entrepreneurial space activity and is further directed to simplify and expedite Since COTS payments are made only after the the issuance of licenses. This determination relieves successful completion of a defined milestone, NASA from conducting our launch oversight of these companies are required to raise the capital necessary missions and prepares the companies for follow-on to accomplish the work up front. This approach builds commercial space transportation services under the in an automatic incentive for companies to complete FAA regulations. the effort on or under cost and as soon as possible so they can be reimbursed and move forward to the next milestone. COTS companies are also highly incentivized Lessons Learned to hold cost and schedule because of our strategy to invest in multiple companies. This engages the engine 1) In October 2007, NASA terminated its $207 million of competition where companies strive to offer the best SAA with Rocketplane Kistler (RpK) for failure to meet value and capture a share of existing markets or create milestones just over a year after award. RpK committed new markets as soon as possible. to raise an additional $500 million in order to complete the development and demonstration of its K1 reusable 9) Commercial friendly intellectual/physical property and launch vehicle but was unable to close the necessary data rights. rounds of financing. NASA recognized the risk associated with raising this large amount of capital and The COTS SAAs include special provisions for purposely limited the initial milestones until the funding minimal Government retention, licensing, and use of was secured. RpK completed the first three milestones

108 APPENDIX and received $32 million in payments. As the program an appropriate legal way to accommodate such was designed to do, the termination was conducted equipment transfers under a SAA. swiftly resulting in minimum financial and schedule loss. Within four months, NASA conducted a second round 3) NASA saw significant growth in service prices from competition and awarded the remaining $170 million to those projected in the COTS proposals to those Orbital Sciences Corporation. finally negotiated in the CRS contracts. Some of the growth may be due to additional requirements in the RpK informed NASA that the primary reason they were contracts. Another factor may be that the systems unable to complete the financing was because NASA were matured since the initial proposals and the could not guarantee or even commit to the follow-on pricing was more accurately reflective of the actual ISS resupply service contract. Investors in the financial costs incurred and projected costs to complete. Since markets were simply not willing to take on this high the prices projected in the COTS proposals were not risk venture without an assured return on investment. binding, future evaluation teams should consider the They recognized NASA was the only reliable customer large uncertainty range in these prices if they are used for these services since other markets have had as part of the selection criteria. Also, NASA should limited development and have yet to materialize. This carefully plan the point in the development cycle concern was expressed by most companies seeking when a Request for Proposals for service contracts is outside or corporate investment when NASA received issued. Ideally, NASA should wait until the capability is RFI responses from industry in preparation for the ISS demonstrated, but this would likely result in an 18-24 Commercial Resupply Services contracts. month gap before an operational mission is flown due to vehicle production lead time. Conversely, issuing Therefore, given that the requirement for additional RFPs too early will lead to inaccurate price projections company investment is an important part of this form and perhaps schedule delays and penalties due to of partnership, NASA should not expect companies unexpected development issues. to raise funds from financial markets unless we are willing to commit to purchase their services. The transition from development partnerships to Summary operational service contracts is important to any The COTS model for public-private partnerships has future acquisition planning using this approach. NASA paved the way for the procurement of commercial space should consider ways to assure selected partners will transportation services. What started as an unknown be offered follow-on contracts if they are successful in experiment four years ago has resulted in a new medium demonstrating their capabilities. class launch vehicle poised to launch in the days ahead, 2) Another lesson learned from COTS is that NASA does another under construction and soon ready for test, and not have the statutory authority to provide Government a sure promise of two highly advanced cargo carrying Furnished Equipment (GFE) under the SAA. Even spacecraft planned to visit the space station in the year though GFE for certain rendezvous and proximity ahead. This was made possible because NASA was willing operations equipment was contemplated in the original to risk $500 million as a bold lead investor confident in agreements, transferring this equipment has been its commercial partners. This strategic investment was problematic. Conversely, NASA also does not have the significant enough to break through the barriers to entry authority to receive deliverables from the partner under in this extremely difficult and risky business, yet modest the SAA. For example, NASA was unable to accept enough to be affordable and fiscally responsible. NASA additional UHF Communications Units developed knows all too well there will be failures and setbacks ahead. by SpaceX for ISS proximity communications with But we also know that through the trusted partnerships we commercial spacecraft. The additional units were to have forged with our industry colleagues, problems will be be provided in exchange for other associated NASA solved and a new era in commercial space will begin. services and could have been used for the Orion project or perhaps other visiting vehicles.

Therefore, NASA should clearly identify and list the hardware and software deliverables that are necessary to be exchanged prior to signing the initial agreement. Alternatively, NASA should seek legislation or determine

APPENDIX 109 Chronology

1800s – 1900s 2000s

1863 – 1869 Construction of the First 2001 – 2002 Space Launch Initiative (SLI) Transcontinental Railroad Alternate Access to Space Station (AAS) 1925 Contract Air Mail Act (Kelly Act) 2002 SpaceX founded 1958 NASA founded Federal Aviation Administration (FAA) founded 2/1/2003 Columbia disaster 1/14/2004 Vision for Space Exploration announced 1970s and 1980s 9/2004 Concept Exploration & Refinement Studies 10/4/2004 Ansari X Prize awarded 1979 First Joint Endeavor Agreement 12/23/2004 Commercial Space Launch Amendments Act 4/12/1981 First Space Shuttle launch (STS-1) 1982 Reagan’s National Space Policy 4/1982 Orbital Sciences Corp. founded 2005

9/1984 NASA Office of Commercial 4/25/2005 ISS Commercial Cargo Services Industry Day Programs established 10/5/2005 First COTS “kickoff” meeting 10/30/1984 Commercial Space Launch Act 10/28/2005 COTS Space Flight Demonstrations 1/28/1986 Challenger disaster synopsis released 8/15/1986 Commercial payloads banned from Shuttle 11/2005 Commercial Crew & Cargo Program Office established at JSC Exploration Systems Architecture Study 1990s (ESAS) Final Report 11/5/1990 Launch Services Purchase Act 12/5/2005 COTS Draft Announcement released 1993 Kistler Aerospace Corp. founded 12/21/2005 JSC Request for Proposal for Venture Capitalist Consulting Services 2/1995 Report of the Space Shuttle Management Independent Review Team (Kraft Report) 10/28/1998 Commercial Space Act of 1998 2006 6/1999 Decadal Planning Team formed 1/18/2006 COTS Round 1 Announcement released 1/25/2006 COTS ISS Integration & Interface Requirements Document released 3/3/2006 COTS Round 1 proposals due 5/5/2006 COTS Round 1 finalists selected 7/14/2006 COTS Round 1 negotiations completed 8/18/2006 Space Act Agreements signed with SpaceX and Rocketplane Kistler 12/19/2006 COTS Round 1 GAO protest successfully defended

110 APPENDIX 2007 2010

1/2007 and 2/2010 Constellation Program cancelled 6/2007 Unfunded Space Act Agreements signed 6/4/2010 First launch of the SpaceX Falcon 9 rocket 10/18/2007 Rocketplane Kistler Space Act 10/11/2010 NASA Authorization Act of 2010 allocated Agreement terminated $300 million COTS augmentation funding 10/22/2007 COTS Round 2 Announcement released 12/8/2010 SpaceX C1 demonstration mission 11/22/2007 COTS Round 2 proposals due 2012 2008 5/22/2012 – 1/28/2008 COTS Round 2 GAO protest 5/31/2012 SpaceX C2+ final COTS successfully defended demonstration mission 2/19/2008 Space Act Agreement signed with 10/8/2012 – Orbital Sciences Corp. 10/28/2012 First SpaceX Cargo Resupply Services mission 5/2008 – 10/2008 Unfunded Space Act Agreements terminated 9/28/2008 First launch of the SpaceX Falcon 1 rocket 2013 12/23/2008 Commercial Resupply Service (CRS) contracts awarded 4/21/2013 Orbital Sciences Corp. Antares rocket demonstration flight

9/18/2013 – 2009 10/23/2013 Orbital Sciences Corp. final COTS demonstration mission 4/22/2009 CRS protest successfully defended 8/10/2009 Commercial Crew Development (CCDev) Announcement released 2014

9/22/2009 CCDev proposals due 1/9/2014 – 10/2009 Report of the Review of United States 2/19/2014 First Orbital Sciences Corp. Cargo Human Spaceflight Plans Committee Resupply Services mission (Augustine Commission) 12/8/2009 CCDev selection

APPENDIX 111 SpaceX COTS Milestones

SpaceX Augmented COTS Milestones

Amended SAA Plan Initial SAA Plan

Actual Completion Date*

* Actual Completion Date is when NASA verified that the partner completed the milestone.

112 APPENDIX Orbital COTS Milestones

Orbital Augmented COTS Milestones

Amended SAA Plan Initial SAA Plan

Actual Completion Date*

* Actual Completion Date is when NASA verified that the partner completed the milestone.

APPENDIX 113 COTS Oral History Interviews

The NASA Johnson Space Center History Office conducted a series of oral history interviews to gather information from key individuals involved with the Commercial Crew & Cargo Program. Interviews were conducted by Rebecca Hackler and Rebecca Wright. To access the transcripts from the interview sessions, go to the JSC History Portal, http://www.jsc.nasa.gov/history/oral_histories/c3po.htm.

NASA Lori Garver NASA Deputy Administrator Bill Gerstenmaier NASA Associate Administrator, Human Exploration and Operations Marc Timm NASA HQ COTS Program Executive Alan Lindenmoyer C3PO Manager Valin Thorn C3PO Deputy Program Manager Dennis Stone C3PO Program Integration Manager Mike Horkachuck C3PO Project Executive – SpaceX Bruce Manners C3PO Project Executive – RpK, Orbital Sciences Lisa Price COTS Financial Team Manager, ISS Program Transportation Integration Office HQ Legal Team Mike Wholley, NASA Chief Counsel Sumara Thompson-King, Deputy General Counsel Courtney Graham, Associate General Counsel for Commercial and Intellectual Property Law Karen Reilley, Attorney, Contracts and Procurement Amy Xenofos Chief Counsel for General Law and External Partnerships, Johnson Space Center Jon Arena Counsel, Johnson Space Center

Others Mike Griffin NASA Administrator, April 2005 - January 2009 Alan Marty Venture Capitalist, Managing Director, Legacy Venture George Nield Federal Aviation Administration Associate Administrator for Commercial Space Transportation Brett Alexander Blue Origin, Business Development/Strategy Jim Muncy President, PoliSpace, co-founder Space Frontier Foundation

SpaceX Gwynne Shotwell President, Chief Operating Officer Hans Koenigsmann Vice President of Mission Assurance Tim Buzza Vice President of Launch and Test David Giger Director, Dragon Propulsion and Product Development John Couluris Senior Director, Launch and Mission Operations Peter Capozzoli Mission Manager

Rocketplane Kistler Randy Brinkley President Joe Cuzzupoli Chief Engineer George French Chief Executive Officer

Orbital Sciences Corp. David Thompson President, Chairman, Chief Executive Officer Antonio Elias Executive Vice President and Chief Technical Officer Frank Culbertson Executive Vice President and General Manager Advance Programs Group Bob Richards Vice President of Human Spaceflight Systems Frank DeMauro Vice President and Program Director COTS/CRS Program (Cygnus) Mike Pinkston Antares Space Launch Vehicle, Managers & Kurt Eberly

114 APPENDIX Lambright, W. Henry. “Launching a New Mission: Michael Griffin and Bibliography NASA’s Return to the Moon,” Organizational Transformation Series, IBM Center for The Business of Government, 2009. Accessed September 30, 2013, http://www.businessofgovernment.org/sites/ General Reference: default/files/ReturntotheMoon.pdf

Bromberg, Joan Lisa. NASA and the Space Industry. Baltimore: NASA. A Journey to Inspire, Innovate, and Discover. Report of John Hopkins University Press, 1999. the President’s Commission on Implementation of United States Space Exploration Policy. Washington, DC: June 2004. Accessed Finch, Edward Ridley, and Amanda Lee Moore. Astrobusiness: September 30, 2013. http://www.nasa.gov/pdf/60736main_M2M_ A Guide to the Commerce and Law of . New York: report_small.pdf. Praeger, 1984. NASA. Exploration Systems Architecture Study: Final Report. McCurdy, Howard E. Faster, Better, Cheaper: Low-Cost NASA-TM-2005-214062. November 2005. Accessed September Innovation in the U.S. Space Program. Baltimore: John Hopkins 30, 2013. http://www.nasa.gov/pdf/140649main_ESAS_full.pdf University Press, 2001. NASA. Vision for Space Exploration. Washington, DC: NASA, NASA. “Budget Documents, Strategic Plans and Performance February 2004. Accessed September 30, 2013. http://www.nasa. Reports.” Accessed September 30, 2013. http://www.nasa.gov/ gov/pdf/55583main_vision_space_exploration2.pdf. news/budget/index.html. NASA Marshall Space Flight Center. “Archived Historical Fact NASA. “News Release Archives.” Accessed September 30, 2013. Sheets.” Accessed September 30, 2013. http://www.nasa.gov/ http://www.nasa.gov/news/releases/archives/index.html. centers/marshall/news/background/archived_factsheets.html.

NASA. “Commercial Crew & Cargo Program Office.” Accessed Rumerman, Judy A. “Commercial Programs.” In NASA Historical September 30, 2013. http://www.nasa.gov/offices/c3po/home/. Data Book, Vol. VI: NASA Space Applications, Aeronautics NASA Johnson Space Center. “Commercial Orbital Transportation and and Technology, Services Demonstration (COTS).” Space Act Agreements. Tracking and Data Acquisition/Support Operations, Accessed September 30, 2013. http://www.nasa.gov/centers/ Commercial Programs, and Resources, 1979–1988. johnson/news/contracts/cots.html. Washington, DC: National Aeronautics and Space Administration SP-4012,1999). Accessed September 30, 2013. http://history. nasa.gov/SP-4012/vol6/ch5.pdf.

Chapter 1: Laying the Foundation Thorn, Valin, Neil Lemmons, and Matt Scheutz. “ISS Commercial Cargo Service: Requirements & Constraints Summary.” Crumbly, Chris, and Michelle Bailey. “NASA’s Alternate Access PowerPoint presentation at ISS Commercial Cargo Service to Station Concept.” PowerPoint presentation, 53rd International Industry Day Conference, Houston, TX, April 25, 2005. Accessed Astronautical Congress, Houston, TX, October 10-19, 2002. September 30, 2013. http://ntrs.nasa.gov/archive/nasa/casi.ntrs. Fought, Bonnie E. “Legal Aspects of the Commercialization of nasa.gov/20060055384_2006256513.pdf. Space Transportation Systems.” Berkeley Technology Law Journal 3 (1988). Accessed September 30, 2013. http://www.law. berkeley.edu/journals/btlj/articles/vol3/fought.html. Chapter 2: Concept to Reality

Garber, Stephen, and Glen Asner. “NASA’s Decadal Planning Team Christensen, Clayton M. The Innovator’s Dilemma: The and the Policy Formulation of the Vision for Space Exploration.” Revolutionary Book That Will Change the Way You Do NASA History Program Office. Accessed September 30, 2013. Business. New York: Harper Business, 2011. http://history.nasa.gov/DPT/DPT.htm. Griffin, Michael. “NASA and the Business of Space.” Speech, Government Accountability Office.Space Transportation: 52nd annual conference of the American Astronautical Society, Challenges Facing NASA’s Space Launch Initiative. GAO- November 2005. In Leadership in Space: Selected Speeches 02-1020. September 17, 2002. Accessed September 30, 2013. of NASA Administrator Michael Griffin, May 2005–October http://www.gao.gov/products/GAO-02-1020. 2008. Washington, DC: NASA SP-2008-564, 2008). Accessed September 30, 2013. http://history.nasa.gov/leadership.pdf. Oral History Workshop: Commercial Space Policies of the 1980s. Moderated by Woody Kay. November 1, 1999. Gunasekara, Surya Gablin. “Other Transaction” Authority: NASA’s Transcript. NASA Headquarters Historical Reference Collection, Dynamic Acquisition Instrument for the Commercialization of Washington, DC. Manned Spaceflight or Cold War Relic?”Public Contract Law Journal 40 (2011): 893-909.

APPENDIX 115 Chapter 3: Competition NASA Office of Inspector General.Commercial Cargo: NASA’s Management of Commercial Orbital Transportation Services Government Accountability Office.Decision, Matter of: and ISS Commercial Resupply Contracts. Report No. IG-13- Exploration Partners, LLC. B-298804. December 19, 016, June 13, 2013. Accessed September 30, 2013. http://oig. 2006. Accessed September 30, 2013. http://www.gao.gov/ nasa.gov/audits/reports/FY13/IG-13-016.pdf. assets/380/378416.pdf. U.S. Congress. House. Commercial Launch Vehicles: NASA Government Accountability Office.Decision, Matter of: Taking Measures to Manage Delays And Risks: Hearing Rocketplane Kistler. B-310741. January 28, 2008. before the Subcommittee on Space and Aeronautics. Accessed September 30, 2013. http://www.gao.gov/ 112th Cong., 1st sess., May 26, 2011. Statement of Cristina T. assets/390/381890.pdf. Chaplain, GAO Director of Acquisition and Sourcing Management. Accessed September 30, 2013. http://www.gao.gov/ assets/130/126310.pdf. Chapter 5: Commercial Partners US Congress. House. NASA’s Commercial Cargo Providers; Orbital Sciences Corp. An Adventure Begins: Orbital’s First 25 Are They Ready to Supply the Space Station in the Post- Years. Dulles, VA: Orbital Sciences Corp., 2007. Shuttle Era?: Hearing before the Subcommittee on Space and Aeronautics. 112th Cong., 1st sess., May 26, 2011. Statement Orbital Sciences Corp. “Orbital Sciences Corp.” Accessed of William H. Gerstenmaier, Associate Administrator for Space September 30, 2013. http://www.orbital.com. Operations. Accessed September 30, 2013. http://science. Rocketplane Kistler. “Rocketplane Kistler.” Accessed September house.gov/sites/republicans.science.house.gov/files/documents/ 30, 2013. http://www.rocketplanekistler.com. hearings/052611_Gerstenmaier%20Testimony.pdf.

Space Exploration Technologies Corp. “SpaceX.” Accessed US Congress. Senate. Hearing before the Subcommittee September 30, 2013. http://www.spacex.com. on Science and Space. 112th Cong., 2d sess., June 20, 2012. Statement of Michael Lopez-Alegria, President of the Commercial Spaceflight Federation. Accessed September 30, Chapter 6: Collaboration 2013. http://www.hq.nasa.gov/legislative/hearings/2012%20 hearings/6-20-2012%20LOPEZ-ALEGRIA.pdf. Federal Aviation Administration. “Office of Commercial Space US Congress. Senate. Issues Facing the U.S. Space Program Transportation.” Last modified August 20, 2013. Accessed after Retirement of the Space Shuttle: Hearing before the September 30, 2013. http://www.faa.gov/about/office_org/ Subcommittee on Space, Aeronautics, and Related Sciences. headquarters_offices/ast/. 110th Cong., 1st sess., November 15, 2007. Statement of Government Accountability Office.Commercial Space Michael D. Griffin, NASA Administrator. Accessed September Launches: FAA Needs Continued Planning and Monitoring to 30, 2013. http://www.hq.nasa.gov/legislative/hearings/2007%20 Oversee the Safety of the Emerging Industry. hearings/11-15-07%20Griffin.pdf. GAO-07-16, October 2006. Accessed September 30, 2013. http://www.gao.gov/assets/260/252808.pdf. Chapter 7: First Steps Toward Government Accountability Office.Decision, Matter of: Commercial Crew PlanetSpace, Inc. B-401016, April 22, 2009. Accessed September 30, 2013. http://gao.gov/assets/390/385763.pdf. NASA. “Commercial Crew Program.” Accessed NASA. Seeking a Human Spaceflight Program Worthy of September 30, 2013. http://www.nasa.gov/exploration/ a Great Nation: Final Report of the Review of U.S. Human commercial/crew/index.html. Spaceflight Plans Committee. Washington, DC: NASA, US Congress. Senate. Assessing Commercial Space 2009. Accessed September 30, 2013, http://www.nasa.gov/ Capabilities: Hearing before the Subcommittee on Science pdf/396093main_HSF_Cmte_FinalReport.pdf. and Space. 111th Cong., 2d sess., March 18, 2010. Statement of Bryan O’Connor, NASA Chief of Safety and Mission Assurance. Accessed September 30, 2013. http://www.gpo.gov/fdsys/pkg/ CHRG-111shrg66983/pdf/CHRG-111shrg66983.pdf.

116 APPENDIX Chapter 8: Legacy

Garver, Lori. “Business at the Speed of Innovation.” Speech, Government Accountability Office.Commercial Partners Are Making Progress, but Face Aggressive Schedules to Demonstrate Critical Space Station Cargo Transport Capabilities. GAO-09-618, June 2009. Accessed September 30, 2013. http://www.gao.gov/new.items/d09618.pdf.

NASA Aerospace Safety Advisory Panel. Annual Report for 2013. January 15, 2014. Accessed February 24, 2014. http://oiir. hq.nasa.gov/asap/documents/2013_ASAP_Annual_Report.pdf.

NASA Office of Inspector General.NASA’s Efforts to Maximize Research on the International Space Station. Report No. IG- 13-019, July 8, 2013. Accessed September 30, 2013. http://oig. nasa.gov/audits/reports/FY13/IG-13-019.pdf.

US Congress. Senate. Issues Surrounding the Transition from the Space Shuttle to the Next Generation of Human Space Flight Systems: Hearing before the Subcommittee on Space, Aeronautics, and Related Sciences. 110th Cong., 1st sess., March 28, 2007. Statement of Allen Li, GAO Director of Acquisition and Sourcing Management. Accessed September 30, 2013. http://www.gao.gov/assets/120/116060.pdf.

APPENDIX 117 10 Bromberg, 128. For more on the Commercial Space Launch Endnotes Act and the formation of AST see Ronald K. Gress, “The Early Years, AST – A Historical Perspective,” in 2002 Commercial Space Transportation Lecture Series (Washington, DC: Introduction Office of the Associate Administrator for Commercial Space Transportation, April 2003), 2–20, accessed September 30, 1 Gwynne E. Shotwell, interview by Rebecca Wright, 2013, http://www.faa.gov/about/office_org/headquarters_ January 15, 2013, transcript, Commercial Crew & Cargo offices/ast/reports_studies/archives/media/Volume_1.pdf and Program Office History Project, JSC History Collection, Courtney A. Stadd, interview by Rebecca Wright, January 8, University of Houston-Clear Lake, Houston, TX (hereafter 2003, transcript, NASA Headquarters Oral History Project, cited as C3PO OHP). JSC History Collection, University of Houston-Clear Lake, 2 David W. Thompson, interview by Rebecca Wright, June 3, Houston, TX (hereafter cited as NASA HQ OHP). 2013, transcript, C3PO OHP. 11 Bromberg, 153; Gump, 27. For more on Reagan’s 3 Michael Griffin, “NASA and the Business of Space” (speech commercial space policy after Challenger see Bonnie E. made at the 52nd annual conference of the American Fought, “Legal Aspects of the Commercialization of Space Astronautical Society, November 2005), in Leadership in Transportation Systems,” Berkeley Technology Law Journal Space: Selected Speeches of NASA Administrator Michael 3 (1988), accessed September 30, 2013, http://www.law. Griffin, May 2005–October 2008 (Washington, DC: NASA berkeley.edu/journals/btlj/articles/vol3/fought.html. SP-2008-564, 2008), 179, accessed September 30, 2013, 12 For more information on concepts for private space modules, http://history.nasa.gov/leadership.pdf. as well as the ISF and related Congressional hearings, see Bromberg, 163–173. See also Stadd, interview. Chapter 1 13 For more on the SpaceHab, Inc. concept see Bromberg, 165. 4 Wayne Hale and Frank Bauer, “Government Insight/ Oversight for Commercial Crew Transportation,” 14 Howard E. McCurdy, Faster, Better, Cheaper: Low-Cost Rev. N, March 2010, 1, accessed September 30, Innovation in the U.S. Space Program (Baltimore: John 2013, http://www.nasa.gov/pdf/469245main_ Hopkins University Press, 2001), 94. GovernmentInsightForCommercialCrewTransportation. 15 Bromberg, 178; “First private space shuttle unveiled,” BBC pdf. For more on NASA’s early relationships with industry News, March 2, 1999, accessed September 30, 2013, http:// see Joan Lisa Bromberg, NASA and the Space Industry news.bbc.co.uk/2/hi/science/nature/289106.stm. For more (Baltimore: John Hopkins University Press, 1999), 45–74. on space companies that emerged in the 1990s see Bretton 5 Bromberg, 115. Alexander, interview by Rebecca Wright, March 18, 2013, transcript, Commercial Crew & Cargo Program Office History 6 Ronald Reagan, “Statement on Signing the Commercial Project, JSC History Collection, University of Houston-Clear Space Launch Act,” October 30, 1984. Online by Gerhard Lake, Houston, TX (hereafter cited as C3PO OHP). Peters and John T. Woolley, The American Presidency Project, accessed September 30, 2013, http://www. 16 Bromberg, 181. presidency.ucsb.edu/ws/?pid=39335. For more on Reagan’s 17 Ibid., 182. space policy see Edward Ridley Finch, Jr. and Amanda Lee Moore, Astrobusiness: A Guide to the Commerce and Law of 18 The NASA Space Shuttle and the Reusable Launch Vehicle Outer Space (New York: Praeger, 1984), 56–58. Programs: Hearing before the Subcommittee on Science, Technology, and Space, United States Senate, 104th Cong., 7 For more on Space Services, Inc. see Bromberg, 116–117 1st sess., May 16, 1995 (statement of John Mansfield, NASA and David P. Gump, Space Enterprise: Beyond NASA (New Associate Administrator for Space Access and Technology), York: Praeger, 1990), 37–38. 13, accessed September 30, 2013, http://ia700303. 8 For more on the Shuttle privatization proposals of the Space us.archive.org/24/items/hearingonnasaspa1995unit/ Transportation Company (SpaceTran) and Astrotech see hearingonnasaspa1995unit.pdf. Bromberg, 134–137. 19 Bromberg, 181–183. The Kraft Report asserted that the 9 Judy A. Rumerman, comp., “Commercial Programs,” in safety procedures instituted after Challenger had become NASA Historical Data Book, vol. 6, NASA Space Applications, excessively cumbersome for efficient Shuttle operations. Aeronautics and Space Research and Technology, Tracking In 1996, following the Kraft Report recommendations, and Data Acquisition/Support Operations, Commercial NASA awarded the Space Flight Operations Contract Programs, and Resources, 1979–1988 (Washington, DC: to , a joint venture between The NASA SP-4012,1999), 355, accessed September 30, 2013, Boeing Company and Lockheed Martin Corp., to take http://history.nasa.gov/SP-4012/vol6/ch5.pdf. See also over the majority of consolidated Shuttle operations and Bromberg, 121–124. assess commercial markets. Report of the Space Shuttle

118 APPENDIX Management Independent Review Team (Washington, DC: c00-g.txt. For a commercial space advocate’s account of SLI NASA, 1995), accessed September 30, 2013, http://www. and AAS see Greg Klerkx, “Back to the Future,” in Lost in fas.org/spp/kraft.htm. Space: The Fall of NASA and the Dream of a New (New York: First Vintage Books, 2005), 115–141. 20 Dan Mulville, “Commercial Space Transportation” (Federal Aviation Administration), C-SPAN Video Library, February 30 Robert T. Richards, interview by Rebecca Hackler, June 10, 1998, accessed September 30, 2013, http://www.c- 4, 2013, transcript, C3PO OHP. See also Antonio L. Elias, spanvideo.org/program/SpaceTr. interview by Rebecca Hackler, June 3, 2013, transcript, C3PO OHP. 21 For more on the Rotary Rocket Company see McCurdy, 145–147; “First private space shuttle unveiled”; and Daniel 31 The concepts developed under the Space Launch Initiative R. Mulville, interview by Rebecca Wright, June 13, 2013, also contributed to Marshall’s follow-on Orbital Space Plane transcript, NASA HQ OHP. crew rescue and transfer vehicle project. See “OSP Facts,” Marshall Space Flight Center, FS-2003-05-64-MSFC, May 22 Mulville, “Commercial Space Transportation.” 2003, accessed September 30, 2013, http://www.nasa. 23 Commercial Space Act of 1998, Public Law 105–303, 105th gov/centers/marshall/news/background/facts/ospfacts. Cong., 2d sess. (October 28, 1998), §201(a), accessed html. Other commercial initiatives included the Constellation February 24, 2014, http://www.nasa.gov/offices/ogc/ Services International (CSI) concept to use a vehicle based commercial/CommercialSpaceActof1998.html. For more on at the International Space Station for satellite servicing. CSI the space transportation studies see “NASA Contracts for submitted a proposal for the COTS Round 1 competition in Future Space Transportation Studies,” NASA Headquarters 2006, but was not awarded a Space Act Agreement. James Press Release, September 4, 1998, accessed September 30, A.M. Muncy, interview by Rebecca Wright, June 21, 2013, 2013, http://www.nasa.gov/home/hqnews/contract/1998/ transcript, C3PO OHP. c98-n.txt; “The Space Launch Initiative: Technology to 32 George W. Bush, preface to the Vision for Space Exploration Pioneer the Space Frontier,” Marshall Space Flight Center, (Washington, DC: NASA, February 2004), accessed FS-2002-04-87-MSFC, April 2002, accessed September September 30, 2013, http://www.nasa.gov/pdf/55583main_ 30, 2013, http://www.nasa.gov/centers/marshall/news/ vision_space_exploration2.pdf; NASA Authorization Act of background/facts/slifactstext02.html. 2005, Public Law 109–155, 109th Cong., 1st sess. (Dec. 24 NASA EXploration Team, “Charting America’s Course 30, 2005), §108, accessed September 30, 2013, http:// for Exploration & Discovery in the Twenty-first Century” www.gpo.gov/fdsys/pkg/PLAW-109publ155/pdf/PLAW- (PowerPoint presentation). Online by Stephen Garber and 109publ155.pdf. Emphasis added. Glen Asner, “NASA’s Decadal Planning Team and the Policy 33 Michael D. Griffin, interview by Rebecca Wright, January 12, Formulation of the Vision for Space Exploration,” NASA 2013, transcript, C3PO OHP. History Program Office, accessed September 30, 2013, http://history.nasa.gov/DPT/DPT.htm. 34 Muncy, interview; Alexander, interview; Valin B. Thorn, interview by Rebecca Hackler, December 17, 2012, 25 “Space Launch Initiative.” transcript, C3PO OHP; Lori B. Garver, interview by Rebecca 26 NASA FY 2001 Appropriations: Hearing before the Wright, June 26, 2013, transcript, C3PO OHP. Subcommittee on VA, HUD, and Independent Agencies, 35 Gump, 17. United States Senate, 106th Cong., 2d sess., April 13, 2000 (statement of Daniel S. Goldin, NASA Administrator), 36 “Taking the Vision to the Next Step,” NASA Feature, October 5, NASA Headquarters Historical Reference Collection, 5, 2004, accessed September 30, 2013, http://www.nasa. Washington, DC. gov/missions/solarsystem/vision_concepts.html. 27 Government Accountability Office, Space Transportation: 37 W. Henry Lambright, “Launching a New Mission: Michael Challenges Facing NASA’s Space Launch Initiative, GAO- Griffin and NASA’s Return to the Moon,” Organizational 02-1020, September 17, 2002, 3, accessed September 30, Transformation Series, IBM Center for The Business of 2013, http://www.gao.gov/assets/240/235577.pdf. Government, 2009, 11, accessed September 30, 2013, http://www.businessofgovernment.org/sites/default/files/ 28 HMX, Inc. “Alternate Access to Station,” Final Briefing ReturntotheMoon.pdf; Alexander, interview. NAS8-00172 (PowerPoint presentation, November 17, 2000), 3. Courtesy of Gary C. Hudson, email 38 Alexander, interview; Gary C. Hudson, email communication communication to JSC History Office, March 4, 2013. to JSC History Office, March 4, 2013. For more details on the t/Space architecture concept, see Transformational 29 “Space Launch Initiative”; “Small Companies to Study Space Corp., “Sustainable Lunar Exploration Requires a Potential Use of Emerging Launch Systems for Alternative Competition-Based Open Architecture,” Concept Exploration Access to Space Station,” NASA Marshall Space Flight Center & Refinement BAA (PowerPoint presentation, September 13, Press Release, August 24, 2000, accessed September 30, 2004), accessed September 30, 2013, http://www.nasa.gov/ 2013, http://www.nasa.gov/home/hqnews/contract/2000/ pdf/65852main_tSpace.pdf.

APPENDIX 119 39 Mark Stucker, “A Preliminary Strategy for Inclusion of to over three times the amount agreed on in 2006. On 30 April Innovative Access in NASA ESMD’s Spiral 1 Acquisitions” 2013, NASA signed a contract with Roscosmos to purchase (PowerPoint presentation, December 16, 2004), Commercial rides for its astronauts on the Soyuz through June 2015 at Crew & Cargo Program Office, Houston, TX. a cost of roughly $70 million per seat, a substantial increase from the already pricey $63 million of the previous agreement 40 “Space Flight Summary: International Space Station,” NASA signed in 2011. See Frank Morring, Jr. “NASA To Pay FY 2005 Budget Summary, EC 5-17, February 3, 2004, $424 Million For Six Soyuz Seats,” Aviation Week & Space accessed September 30, 2013, http://www.nasa.gov/ Technology, May 1, 2013, accessed September 30, 2013, pdf/55411main_28%20ISS.pdf. http://www.aviationweek.com/Article.aspx?id=/article-xml/ 41 “NASA Special Notice: International Space Station asd_05_01_2013_p01-02-575108.xml. Commercial Cargo Services,” SpaceRef.com, April 7, 2005, 49 Griffin, interview. accessed September 30, 2013, http://www.spaceref.com/ news/viewsr.html?pid=16081. 50 “Meet the CIA’s Venture Capitalist,” Bloomberg Businessweek, May 9, 2005, accessed September 30, 2013, 42 Valin Thorn, Neil Lemmons, and Matt Scheutz, “ISS http://www.businessweek.com/stories/2005-05-09/meet- Commercial Cargo Service: Requirements & Constraints the-cias-venture-capitalist. Summary” (PowerPoint presentation at ISS Commercial Cargo Service Industry Day, Houston, TX, April 25, 2005), 51 Bromberg, 51. accessed September 30, 2013, http://ntrs.nasa.gov/archive/ 52 Griffin, interview. nasa/casi.ntrs.nasa.gov/20060055384_2006256513.pdf. See also Thorn, interview. 53 Stucker, “Preliminary Strategy,” 15; Griffin, interview; Scott J. Horowitz, interview by Rebecca Wright, March 1, 2013, 43 NASA FY 2007 Budget Request, February 6, 2006, transcript, JSC Oral History Project, JSC History Collection, accessed September 30, 2013, http://www.nasa.gov/ University of Houston-Clear Lake, Houston, TX. pdf/142458main_FY07_budget_full.pdf. See also Alan Lindenmoyer, “Commercial Crew/Cargo Project Strategy 54 Commercial Space Act of 1998, Public Law 105–303, Briefing” (PowerPoint presentation to NASA Headquarters, 105th Cong., 2d sess. (Oct. 28, 1998), §202, accessed November 15, 2005), 6, Commercial Crew & Cargo Program September 30, 2013, http://www.gpo.gov/fdsys/pkg/PLAW- Office, Houston, TX. 105publ303/pdf/PLAW-105publ303.pdf. 44 “Space Launch Initiative.” 55 Chris Crumbly and Michelle Bailey, “NASA’s Alternate Access to Station Concept” (PowerPoint presentation at the 53rd 45 Ibid. For more on the perspective and arguments of International Astronautical Congress, Houston, TX, October commercial space advocates see Bromberg, 187–190. 10–19, 2002), 2. Marshall Space Flight Center History Office, 46 Oral History Workshop: Commercial Space Policies of the Huntsville, Alabama. Emphasis in the original. See also Alan 1980s, moderated by Woody Kay, November 1, 1999, J. Lindenmoyer, interview by Rebecca Wright, October 31, transcript, NASA Headquarters Historical Reference 2012, transcript, C3PO OHP. Collection, Washington, DC. 56 Bromberg, 157. 47 Conference Report, National Aeronautics and Space 57 Ibid., 157–159. See also Stadd, interview. Administration Authorization Act of 2000, H.R. Rep. 106– 843, 106th Cong., 2d sess., Sept. 12, 2000, 30, accessed 58 National Aeronautics and Space Administration Authorization September 30, 2013, http://www.gpo.gov/fdsys/pkg/CRPT- Act, Fiscal Year 1991, Public Law 101–611, 101st Cong., 106hrpt843/pdf/CRPT-106hrpt843.pdf. 2d. sess. (November 16, 1990), Title II—Launch Services Purchase, §204. 48 Since the retirement of the Space Shuttle fleet in July 2011, the U.S. has relied solely on the Russian Soyuz to transport 59 See for example Thorn, interview. its ISS crew members to and from their long-duration stays 60 Stucker, 5. aboard the orbiting laboratory. Under the original ISS bilateral agreements, the Russian Federal Space Agency (Roscosmos) 61 Griffin, interview. provided flights to U.S. astronauts at no cost to NASA through 62 Rumerman, 361. the year 2005. At that point, the U.S. Congress needed to 63 Crumbly and Bailey, 3. secure an exemption to the 2000 Iran Nonproliferation Act in order to allow the space agency to purchase hardware and/or 64 Gump, 22. services from Russia, and in January 2006 NASA was able to 65 Surya Gablin Gunasekara, “Other Transaction” Authority: contract with Roscosmos to secure Soyuz flights at the rate of NASA’s Dynamic Acquisition Instrument for the $21.8 million per passenger. In less than a decade, the price Commercialization of Manned Spaceflightor Cold War for flights aboard the Soyuz increased exponentially, soaring Relic?” Public Contract Law Journal 40 (2011): 896.

120 APPENDIX 66 See Lindenmoyer, interview. 75 Scott J. Horowitz, interview by Rebecca Wright, March 1, 2013, transcript, JSC Oral History Project, JSC History 67 Crumbly and Bailey, 3 and 13–14. “” Collection, University of Houston-Clear Lake, Houston, TX. is a term from the 1997 book The Innovator’s Dilemma by Clayton M. Christensen. The book’s principles would have a 76 Gerstenmaier, interview. significant influence on the COTS program. 77 “Alan Lindenmoyer, Manager,” NASA Commercial Crew 68 Crumbly and Bailey, 5 and 10. & Cargo Program Office, last modified October 30, 2012, accessed September 30, 2013, http://www.nasa.gov/offices/ 69 Stucker, 7. c3po/about/alindenmoyer.html; Lindenmoyer, interview. Chapter 2 78 For more details on the formulation of the COTS program see Marc G. Timm, interview by Rebecca Wright, June 12, 2013, 70 Alan J. Lindenmoyer, interview by Rebecca Wright, October transcript, C3PO OHP. 31, 2013, transcript, Commercial Crew & Cargo Program 79 Marc Timm, “Commercial Crew & Cargo Program: Program Office History Project, JSC History Collection, University of Overview” (PowerPoint presentation at Commercial Space Houston-Clear Lake, Houston, TX (hereafter cited as C3PO Transportation Advisory Committee meeting, Washington, DC, OHP). May 18, 2007), 4, accessed September 30, 2013, http://www. 71 Michael D. Griffin, NASA FY 2006 Operating Plan letter to faa.gov/about/office_org/headquarters_offices/ast/advisory_ Congress, February 6, 2006, 8, accessed September 30, committee/meeting_news/media/CCCProgram_TIMM- 2013, http://images.spaceref.com/news/2006/2006.02.06. COMSTAC_%205-16-07.ppt. fy06.plan.griffin.pdf. See also Griffin, interview and Horowitz, 80 Timm, interview; Alan Lindenmoyer, “Commercial Crew/ interview. In the traffic-model analysis of a December Cargo Transportation Procurement Development Team 2006 NASA ISS SPEAR (Strategic Planning Evaluation Kickoff Briefing” (PowerPoint presentation at Johnson Space and Resource Analysis) report, future COTS vehicles were Center, Houston, Texas, October 5, 2005), Commercial Crew identified as the primary option for meeting the anticipated & Cargo Program Office, Houston, TX. cargo shortfall after Shuttle retirement. At that time, COTS was projected to start resupplying ISS in 2010, while the 81 NASA’s Exploration Systems Architecture Study: Final Orion Crew Exploration Vehicle would not be ready until Report, NASA-TM-2005-214062, November 2005, i, 2015. International Space Station Program, ISS Strategic accessed September 30, 2013, http://www.nasa.gov/ Planning and Resource Analysis (SPEAR2006), December pdf/140649main_ESAS_full.pdf; Timm, interview. 28, 2006, A-20. JSC Library: Scientific and Technical 82 “A--Commercial Orbital Transportation Services (COTS) Information (STI) Center, Houston, TX. Space Flight Demonstrations,” NASA Solicitation NASA- 72 William H. Gerstenmaier, interview by Rebecca Wright, June SNOTE-051028-001, originally posted on October 28, 2005, 12, 2013, transcript, C3PO OHP. See also Amy V. Xenofos, accessed September 30, 2013, https://www.fbo.gov/spg/ interview by Rebecca Hackler, December 7, 2012, transcript, NASA/JSC/OPDC20220/NASA-SNOTE-051028-001/listing. C3PO OHP and Michael C. Wholley, interview by Rebecca html. For Lindenmoyer’s description of the capabilities see Hackler, March 19, 2013, transcript, C3PO OHP. Lindenmoyer, interview. 73 Michael J. Horkachuck, interview by Rebecca Wright, 83 All capability descriptions from: Commercial Orbital November 6, 2013, transcript, C3PO OHP. See also Alan J. Transportation Services (COTS) Demonstrations, Lindenmoyer, interview and Amy V. Xenofos, interview. Announcement Number COTS-01-05, Commercial Crew/ Cargo Project Office, January 18, 2006 (As Amended 74 Alan Lindenmoyer and Brant Sponberg, “Commercial Crew/ February 17, 2006), A1-A2, accessed September 30, 2013, Cargo Project: Status Report to Administrator” (PowerPoint available at http://www.nasa.gov/offices/c3po/about/cots_ presentation, October 19, 2005), 2, Commercial Crew & demo_competition.html. Cargo Program Office, Houston, TX. Some commercial advocates argued that piloted crew vehicles would have 84 See Valin B. Thorn, interview by Rebecca Hackler, December been easier to develop first, rather than the complicated 17, 2012, transcript, C3PO OHP. automated rendezvous systems required for cargo only. 85 Jonathan A. Arena, interview by Rebecca Hackler, April 22, Bretton Alexander, interview by Rebecca Wright, March 18, 2013, transcript, C3PO OHP. See also Xenofos, interview and 2013, transcript, C3PO OHP; Gary C. Hudson, “It’s a Trap! Wholley, interview. Monopsony and NewSpace” (PowerPoint presentation at 86 Sumara M. Thompson-King, Courtney B. Graham, and Karen Space Access 2011 Conference, , Arizona, April 7–9, M. Reilley, interview by Rebecca Hackler, March 19, 2013, 2011), 5. Courtesy of Gary C. Hudson, email communication transcript, C3PO OHP. to JSC History Office, March 6, 2013.

APPENDIX 121 87 Wholley, interview. See also Thompson-King, Graham, and the Agency’s traditional human spaceflight culture. However, Reilley, interview and Arena, interview. by that point an office had already been established at JSC. Marty, interview. 88 National Aeronautics and Space Act of 1958 (Unamended), Public Law 85-568, 85th Cong., 2d sess. (July 29, 1958), 98 Marty, interview; Lindenmoyer, interview. §203, accessed September 30, 2013, http://history.nasa. 99 Marty, interview. gov/spaceact.html. Emphasis added. 100 Michael D. Griffin, interview by Rebecca Wright, January 12, 89 Xenofos, interview. For more on the use of Other Transaction 2013, transcript, C3PO OHP. Authority in the Federal government, see Congressional Research Service, Other Transaction (OT) Authority, by L. 101 Marty, interview. See also Lindenmoyer, interview. Elaine Halchin, RL34760, July 15, 2011, accessed September 102 Bruce A. Manners, interview by Rebecca Hackler, December 30, 2013, http://www.fas.org/sgp/crs/misc/RL34760. 5, 2013, transcript, C3PO OHP; Dennis Stone, email pdf and Surya Gablin Gunasekara, “Other Transaction” communication to JSC History Office, July 21, 2013. Authority: NASA’s Dynamic Acquisition Instrument for the Commercialization of Manned Spaceflightor Cold War Relic?” 103 Marty, interview. Around the same time as the first COTS Public Contract Law Journal 40 (2011): 894. award, in September 2006, NASA founded its own venture capital firm, Red Planet Capital, to invest in companies 90 Xenofos, interview. that were developing technologies that could be of use 91 Joint Sponsored Research Agreements had been used in the in NASA’s future missions to Mars. The project was shut past to provide funding to outside entities under NASA’s OTA, down less than a year later due to concerns about the but COTS was the first time funded Space Act Agreements government competing with the private sector. “NASA had been established as such. NASA Headquarters attorney Forms Partnership with Red Planet Capital, Inc.,” NASA Courtney B. Graham explained that under COTS, the Agency News Release 06-317, September 20, 2006, accessed was “acting as an arm’s-length investor to stimulate the September 30, 3013, http://www.nasa.gov/home/ development of that capability, rather than working jointly hqnews/2006/sep/HQ_06317_red_capital.html; Marc with someone on something that’s of mutual interest to both Kaufman, “NASA Invests in Its Future With Venture Capital parties.” Thompson-King, Graham, and Reilley, interview. Firm,” Washington Post, October 31, 2006, accessed September 30, 2013, http://www.washingtonpost.com/wp- 92 Oral History Workshop: Commercial Space Policies of the dyn/content/article/2006/10/30/AR2006103001069.html. 1980s, moderated by Woody Kay, November 1, 1999, See also Marty, interview and Thompson-King, Graham, transcript, NASA Headquarters Historical Reference and Reilley, interview. Collection, Washington, DC. 104 National Aeronautics and Space Administration Authorization 93 Dennis A. Stone, interview by Rebecca Hackler, November Act of 1985, Public Law 98–361, 98th Cong., 2d sess. (July 26, 2012, transcript, C3PO OHP. 16, 1984), §110(c), accessed September 30, 2013, http:// 94 NASA JSC Solicitation: Venture Capitalist Consulting uscodebeta.house.gov/statutes/1984/1984-098-0361.pdf. Services, Solicitation Number: NNJ06139211R, posted In 2010 the Space Act was amended so that this phrasing December 21, 2005, accessed September 30, 2013, http:// was now found in §20102(c). National Aeronautics and www.spaceref.com/news/viewsr.html?pid=19046. Space Act, Public Law 111–314, 111th Cong., 2d sess. (December 18, 2010), accessed September 30, 2013, http:// 95 Alan Marty, interview by Rebecca Hackler, January 18, 2013, www.gpo.gov/fdsys/pkg/BILLS-111hr3237enr/pdf/BILLS- transcript, C3PO OHP. 111hr3237enr.pdf. 96 The book’s first edition was published by the Harvard 105 COTS Announcement, COTS-01-05. School Business Press in 1997 as The Innovator’s Dilemma: When New Technologies Cause Great Firms to Fail. For the 106 Ibid., Also Timm, interview. Joan Lisa Bromberg noted that in edition referenced in this work see Clayton M. Christensen, traditional contract procurements “arrogant” proposals, i.e., The Innovator’s Dilemma: The Revolutionary Book That those that did not strictly conform to government-defined Will Change the Way You Do Business (New York: Harper Request for Proposal requirements, often resulted in greater Business, 2011). creativity. Joan Lisa Bromberg, NASA and the Space Industry (Baltimore: John Hopkins University Press, 1999), 43. 97 Marty reported that his original recommendation to Griffin, as they discussed the initiative during an informal conversation 107 Lindenmoyer, interview. at a White House dinner, was to base the COTS program 108 COTS Announcement, COTS-01-05, A21. out of the NASA Ames Research Center in Moffett Field, California, to remove the program as far as possible from 109 Marty, interview.

122 APPENDIX 110 According to NASA attorney Amy V. Xenofos, one company 121 Valin B. Thorn, interview by Rebecca Hackler, December did in fact propose to, instead of visiting the ISS, launch 17, 2012, transcript, Commercial Crew & Cargo Program a spent stage to orbit and then dock with it in order to Office History Project, JSC History Collection, University of demonstrate its low-Earth orbit capabilities. Xenofos, Houston-Clear Lake, Houston, TX (hereafter cited as C3PO interview. See also Manners, interview. OHP); Bruce A. Manners, interview by Rebecca Hackler, December 5, 2013, transcript, C3PO OHP. 111 COTS Announcement, COTS-01-05, 19. 122 Amy V. Xenofos, interview by Rebecca Hackler, December 7, 112 “Valin Thorn, Deputy Manager,” NASA Commercial Crew 2012, transcript, C3PO OHP. & Cargo Program Office, last modified August 17, 2011, accessed September 30, 2013, http://www.nasa.gov/ 123 Dennis Stone, email communication to JSC History Office, offices/c3po/about/vthorn.html; Thorn, interview. July 15, 2013. 113 Valin Thorn, Neil Lemmons, and Matt Scheutz, “ISS 124 Thorn, interview. See also Joan Lisa Bromberg, NASA and Commercial Cargo Service: Requirements & Constraints the Space Industry (Baltimore: John Hopkins University Summary” (PowerPoint presentation at ISS Commercial Press, 1999), 7. Cargo Service Industry Day Conference, Houston, 125 Participant Evaluation Plan, Commercial Orbital TX, April 25, 2005), accessed September 30, 2013, Transportation Services Demonstrations, Announcement http://ntrs.nasa.gov/archive/nasa/casi.ntrs.nasa. Number COTS-01-05, 5-6, Commercial Crew & Cargo gov/20060055384_2006256513.pdf. Program Office, Houston, TX. 114 Thorn, interview. 126 Participant Evaluation Plan, 11. See also Dennis A. Stone, 115 Commercial Orbital Transportation Service: ISS Integration & interview by Rebecca Hackler, November 26, 2012, Interface Requirements Document, SSP 50784, Version 1.0, transcript, C3PO OHP. January 25, 2006, 15, Commercial Crew & Cargo Program 127 “COTS 2006 Demo Competition,” Commercial Crew & Cargo Office, Houston, TX. Program Office, last updated March 2, 2012, accessed 116 Lindenmoyer, interview. November 21, 2013, http://www.nasa.gov/offices/c3po/ about/cots_demo_competition.html. Chapter 3 128 Scott J. Horowitz, interview by Rebecca Wright, March 1, 2013, transcript, JSC Oral History Project, JSC History 117 Commercial Orbital Transportation Services (COTS) Collection, University of Houston-Clear Lake, Houston, TX. Demonstrations, Announcement Number COTS-01-05, See also Michael C. Wholley, interview by Rebecca Hackler, Commercial Crew/Cargo Project Office, January 18, 2006 March 19, 2013, transcript, C3PO OHP. (As Amended February 17, 2006), accessed September 30, 2013, available at http://www.nasa.gov/offices/c3po/about/ 129 Jeff Foust, “Small Steps Forward for NewSpace,” The Space cots_demo_competition.html. The amendments released Review, April 24, 2006, accessed September 30, 2013, in February were fairly minor, consisting of clarifications http://www.thespacereview.com/article/609/1. regarding instructions for electronic proposal submittal 130 Participant Evaluation Plan, 8. (§5.1.3 and §5.1.5) and the use of government-furnished 131 Ibid., 9; Scott J. Horowitz, Commercial Orbital Transportation equipment (Appendix B). Services (COTS) Final Selection Statement, August 18, 2006, 118 COTS Announcement, COTS-01-05, 8-9. The requirement Attachment A, Commercial Crew & Cargo Program Office, for U.S. funding would prove to be one of the factors in RpK’s Houston, TX. failed quest to meet its financial milestones. 132 Alan J. Lindenmoyer, interview by Rebecca Wright, October 119 At the time of the announcement, the Iran and Syria 31, 2012, transcript, C3PO OHP. Nonproliferation Act prohibited payments to Russia for ISS- 133 Participant Evaluation Plan, 17. See also Lindenmoyer, related services after December 2011; on 14 January 2013, interview. Congress extended NASA’s waiver from the Iran North Korea and Syria Nonproliferation Act (INKSNA), allowing the 134 Horowitz, Final Selection Statement, 1; Alan Marty, interview Agency to purchase ISS services from Russia through 2020. by Rebecca Hackler, January 18, 2013, transcript, C3PO Space Exploration Sustainability Act, Public Law 112-273, OHP. 112th Congress, 2d sess. (January 14, 2013), §4, accessed 135 Dennis Stone, email communication to JSC History Office, September 30, 2013, http://www.gpo.gov/fdsys/pkg/ July 15, 2013. PLAW-112publ273/pdf/PLAW-112publ273.pdf. 136 Participant Evaluation Plan, 22. 120 Dennis Stone, email communication to JSC History Office, July 15, 2013. 137 Ibid., 17.

APPENDIX 123 138 NASA Administrator Michael Griffin later expressed 155 Alan J. Lindenmoyer, interview by Rebecca Wright, surprise that some major aerospace contractors failed November 7, 2012, transcript, C3PO OHP. See also to submit competitive proposals. Those that did submit Manners, interview. proposals requested more than the available NASA 156 Stone, interview. In the words of NASA General Counsel Mike funding. Michael D. Griffin, interview by Rebecca Wright, Wholley, “It was well begun as first done.” Wholley, interview. January 12, 2013, transcript, C3PO OHP. See also Wholley, interview. Economist Clayton M. Christensen observed that 157 Commercial Orbital Transportation Services, Phase 1 small markets—such as the relatively insignificant $500 Demonstrations, Announcement Number JSC-COTS-2, million COTS funding—do not provide enough growth Commercial Crew & Cargo Program Office, October opportunities for large companies. In other words, “an 22, 2007, accessed September 30, 2013, available at opportunity that excites a small organization isn’t large http://www.nasa.gov/offices/c3po/about/cots_demo_ enough to be interesting to a very large one. One of the competition_2007.html. Emphasis added. Also Xenofos, bittersweet rewards of success is that as companies interview. While the Round 1 Announcement (COTS-01-05) become large, they lose the capability to enter small stated that “NASA intends to use its Space Act authority emerging markets.” Clayton M. Christensen, The Innovator’s to enter into at least one and preferably multiple funded Dilemma: The Revolutionary Book That Will Change the Way agreements,” the Round 2 Announcement stated, “NASA You Do Business (New York: Harper Business, 2011), 190. intends to use its Space Act authority to enter into at least one and potentially multiple funded agreements.” 139 Stone, interview. See also Jonathan A. Arena, interview by Rebecca Hackler, April 22, 2013, transcript, C3PO OHP. 158 COTS Announcement, JSC-COTS-2, 18–19. 140 Xenofos, interview; Sumara M. Thompson-King, Courtney B. 159 Xenofos, interview. Graham, and Karen M. Reilley, interview by Rebecca Hackler, 160 Douglas R. Cooke, Selection Statement for the Commercial March 19, 2013, transcript, C3PO OHP. Orbital Transportation Services Phase 1 Demonstrations 141 In the case of SpaceHab, Inc., however, the level of confidence (Announcement Number JSC-COTS-2), February 15, 2008, rating actually decreased after the face-to-face due diligence 3, Commercial Crew & Cargo Program Office, Houston, TX. meetings. Horowitz, Final Selection Statement, Attachment B. 161 Cooke, Selection Statement, 11. 142 Marc G. Timm, interview by Rebecca Wright, June 12, 2013, 162 Ibid. transcript, C3PO OHP. 163 Antonio L. Elias, interview by Rebecca Hackler, June 3, 2013, 143 Horowitz, Final Selection Statement, 4-5. transcript, C3PO OHP. 144 Ibid. 164 Cooke, Selection Statement, 12. 145 Dennis Stone, email communication to JSC History Office, 165 Manners, interview. July 15, 2013. 166 Government Accountability Office, Decision, Matter of: 146 Horowitz, interview. Rocketplane Kistler, B-310741, January 28, 2008, 3, 147 Horowitz, Final Selection Statement, 5. This was true despite accessed September 30, 2013, http://www.gao.gov/ the fact that RpK, like SpaceX, proposed the development of assets/390/381890.pdf. all four capabilities and SpaceDev proposed only C and D. 167 Ibid., 5. See also Xenofos, interview and Thompson-King, 148 The Space Act Agreements of all three of NASA’s COTS Graham, and Reilley, interview. commercial partners are available online. “Commercial Orbital 168 See Brian Berger, “NASA Signs Space Act Agreements with Transportation Services Demonstration (COTS),” JSC Library, Three More Firms,” Space.com, June 19, 2007, accessed accessed September 30, 2013, http://www.nasa.gov/ September 30, 2013, http://www.space.com/3975-nasa- centers/johnson/news/contracts/cots.html. signs-space-act-agreements-firms.html. 149 Lindenmoyer, interview; Thorn, interview. 169 Thompson-King, Graham, and Reilley, interview. 150 Government Accountability Office, Decision, Matter of: 170 Arena, interview. See also Xenofos, interview. Exploration Partners, LLC, B-298804, December 19, 2006, accessed September 30, 2013, http://www.gao.gov/ 171 Thompson-King, Graham, and Reilley, interview. See also assets/380/378416.pdf. Arena, interview. 151 Xenofos, interview. 172 Arena, interview; Stone, interview. 152 Ibid.; Thompson-King, Graham, and Reilley, interview; 173 Cooke, Selection Statement. Arena, interview. 174 Thomas B. Pickens III (CEO of SpaceHab, Inc.) to Alan 153 Thompson-King, Graham, and Reilley, interview. Lindenmoyer, May 29, 2008, Commercial Crew & Cargo Program Office, Houston, TX. 154 Arena, interview.

124 APPENDIX 175 Charles Miller (President and CEO of Constellation Services 186 Seeking a Human Spaceflight Program Worthy of a Great International, Inc.) to Alan Lindenmoyer, July 15, 2008, Nation: Final Report of the Review of U.S. Human Spaceflight Commercial Crew & Cargo Program Office, Houston, TX. Plans Committee (Washington, DC: NASA, 2009), 57, accessed September 30, 2013, http://www.nasa.gov/ 176 Charles Duelfer (CEO of the Transformational Space Corp.) pdf/396093main_HSF_Cmte_FinalReport.pdf. Emphasis to Alan Lindenmoyer, October 16, 2008, Commercial Crew & added. Cargo Program Office, Houston, TX. 187 “Fiscal Year 2011 Budget Estimate,” NASA, February 2010, Chapter 4 accessed September 30, 2013, http://www.nasa.gov/news/ budget/2011.html. 177 Scott J. Horowitz, Program Formulation Authorization 188 Marc G. Timm, interview by Rebecca Wright, June 12, 2013, Document, Commercial Crew & Cargo Program, 3, August transcript, C3PO OHP. 14, 2006, Commercial Crew & Cargo Program Office, Houston, TX. 189 The National Aeronautics and Space Administration Authorization Act of 2010, Public Law 111–267, 111th 178 The SAA between NASA and SpaceX also included an option Cong., 2d sess. (October 11, 2010), §§101 and 401, for COTS Capability D, a Crewed Vehicle Demonstration accessed September 30, 2013, http://www.nasa.gov/ valued at $308 million, that was never activated. Space Act pdf/649377main_PL_111-267.pdf. Agreement between NASA and SpaceX for Commercial Orbital Transportation Services Demonstration, Appendix 190 Price, interview. 1: Executive Summary, 3, accessed September 30, 2013, 191 When the COTS program was initiated the Commercial http://www.nasa.gov/centers/johnson/pdf/189228main_ Crew & Cargo Program Office was under the Exploration setc_nnj06ta26a.pdf. Systems Mission Directorate (ESMD) at NASA Headquarters. 179 Lisa P. Price, email communication to JSC History Office, After the retirement of the Space Shuttle in July 2011, the September 19, 2013. See also Consolidated Appropriations System Operations Mission Directorate (SOMD) merged with Act, 2008, Public Law 110–161, 110th Cong., 1st sess. ESMD to form the Human Exploration and Operations (HEO) (December 26, 2007), accessed September 30, 2013, http:// Mission Directorate under Associate Administrator William H. www.gpo.gov/fdsys/pkg/PLAW-110publ161/pdf/PLAW- “Bill” Gerstenmaier. 110publ161.pdf. 192 Bruce A. Manners, interview by Rebecca Hackler, December 180 Alan J. Lindenmoyer, interview by Rebecca Wright, October 5, 2013, transcript, C3PO OHP. 31, 2012, transcript, Commercial Crew & Cargo Program 193 Michael J. Horkachuck, interview by Rebecca Hackler, Office History Project, JSC History Collection, University of January 16, 2013, transcript, C3PO OHP. Houston-Clear Lake, Houston, TX (hereafter cited as C3PO 194 Manners, interview. OHP). See also Lisa P. Price, interview by Rebecca Hackler, May 14, 2013, transcript, C3PO OHP. 195 Lori B. Garver, interview by Rebecca Wright, June 26, 2013, transcript, C3PO OHP. 181 Price, interview. 196 Horkachuck, interview, January 16, 2013. 182 NASA’s Commercial Cargo Providers; Are They Ready to Supply the Space Station in the Post-Shuttle Era?: Hearing 197 Manners, interview. before the Subcommittee on Space and Aeronautics, 198 Michael J. Horkachuck, interview by Rebecca Wright, United States House of Representatives, 112th Cong., 1st November 6, 2013, transcript, C3PO OHP. sess., May 26, 2011 (statement of William H. Gerstenmaier, Associate Administrator for Space Operations), accessed 199 Horkachuck, interview, January 16, 2013. September 30, 2013, http://science.house.gov/sites/ 200 Horkachuck, interview, November 6, 2012. republicans.science.house.gov/files/documents/ 201 Bryan D. O’Connor, interview by Rebecca Wright, December hearings/052611_Gerstenmaier%20Testimony.pdf. 18, 2012, transcript, JSC Oral History Project, JSC History 183 William H. Gerstenmaier, interview by Rebecca Wright, June Collection, University of Houston-Clear Lake, Houston, TX; 12, 2013, transcript, C3PO OHP. Jeffrey H. Cyphert, email communication to JSC History 184 Bretton Alexander, interview by Rebecca Wright, March 18, Office, July 24, 2013. 2013, transcript, C3PO OHP. 202 Mark D. Erminger, email communication to Commercial Crew 185 Review of the U.S. Human Spaceflight Plans Committee & Cargo Program Office, November 20, 2013. (Public Meeting, Ronald Reagan Building and International 203 Horkachuck, interview, November 6, 2012. Trade Center Amphitheater, Washington, DC, August 12, 204 Ibid. 2009), transcript, 69-70, accessed September 30, 2013, http://www.nasa.gov/382774main_081209_DC_Transcript.txt. 205 David W. Thompson, interview by Rebecca Wright, June 3, 2013, transcript, C3PO OHP.

APPENDIX 125 206 Kurt Eberly and Michael R. Pinkston, interview by Rebecca 221 Michael J. Horkachuck, interview by Rebecca Wright, Wright, June 3, 2013, transcript, C3PO OHP. November 6, 2013, transcript, C3PO OHP. 207 Peter Capozzoli, interview by Rebecca Wright, January 16, 222 Hans Koenigsmann, interview by Rebecca Hackler, January 2013, transcript, C3PO OHP. 15, 2013, transcript, C3PO OHP. 208 Horkachuck, interview, November 6, 2013. 223 Tim Buzza, interview by Rebecca Wright, January 15, 2013, transcript, C3PO OHP. 209 Ibid.; Manners, interview. 224 Horowitz, Final Selection Statement, Attachment B. 210 Eberly and Pinkston, interview. 225 “Falcon 1 Overview,” Space Exploration Technologies Corp., 211 Timm, interview. accessed March 29, 2013, http://www.spacex.com/falcon1. 212 Manners, interview. php. This page was removed from the SpaceX website after 213 John E. Bretschneider (Booz Allen Hamilton), email the last date of access and is no longer publically available. communication to JSC History Office, September 25, 2013. For more on the first successful Falcon 1 launch, see Aaron Rowe, “SpaceX Did It — Falcon 1 Made it to Space,” Wired, 214 Horkachuck, interview, November 6, 2012. September 28, 2008, accessed September 30, 2013, http:// 215 Antonio L. Elias, interview by Rebecca Hackler, June 3, 2013, www.wired.com/wiredscience/2008/09/space-x-did-it/. transcript, C3PO OHP. 226 Koenigsmann, interview.

Chapter 5 227 See “Falcon 9,” Space Exploration Technologies Corp., accessed September 30, 2013, http://www.spacex.com/ 216 See David Giger, interview by Rebecca Hackler, falcon9; “SpaceX Achieves Orbital Bullseye with Inaugural January 15, 2013, transcript, Commercial Crew & Cargo Flight of Falcon 9 Rocket,” Press Release, Space Exploration Program History Project, JSC History Collection, University Technologies Corp., June 7, 2010, accessed September 30, of Houston-Clear Lake, Houston, TX (hereafter cited as 2013, http://www.spacex.com/press/2012/12/19/spacex- C3PO OHP). achieves-orbital-bullseye-inaugural-flight-falcon-9-rocket. 217 Scott J. Horowitz, Commercial Orbital Transportation 228 Koenigsmann, interview. Services (COTS) Final Selection Statement, August 18, 2006, 229 “Dragon,” Space Exploration Technologies Corp., accessed Attachment B, Commercial Crew & Cargo Program Office, September 30, 2013, http://www.spacex.com/dragon; Houston, TX. “Dragon Lab Fact Sheet,” Space Exploration Technologies 218 Musk’s confident persona, sometimes even described as Corp., accessed September 30, 2013, http://www.spacex. “brash,” has been credited as an instrumental factor in the com/sites/spacex/files/pdf/DragonLabFactSheet.pdf. company’s success. For more on Musk see “Elon Musk, the 230 Denise Chow, “5 Fun Facts About Private Rocket Company Rocket Man with a Sweet Ride,” Smithsonian Magazine, SpaceX,” Space.com, May 21, 2012, accessed September December 2012, accessed September 30, 2013, http:// 30, 2013, http://www.space.com/15799-spacex-dragon- www.smithsonianmag.com/science-nature/Elon-Musk-the- capsule-fun-facts.html; W.J. Hennigan, “SpaceX’s Rocket-Man-With-a-Sweet-Ride-179998091.html. ‘Secret’ Payload? A Wheel of Cheese,” Los Angeles 219 “About SpaceX: Company,” Space Exploration Times Technology Blog, December 9, 2010, accessed Technologies Corp., accessed September 30, 2013, September 30, 2013, http://latimesblogs.latimes.com/ http://www.spacex.com/about. technology/2010/12/spacexs-secret-payload.html. 220 In December 2012, SpaceX made headlines when it was 231 Clayton M. Christensen, The Innovator’s Dilemma: The awarded launch contracts with the U.S. Air Force, a market Revolutionary Book That Will Change the Way You Do previously dominated by established launch contractors Business (New York: Harper Business, 2011), 16. such as Boeing and United Launch Alliance. Aaron Metha, 232 Jennifer Reingold, “Hondas in Space,” Fast Company, “SpaceX president discusses Air Force launches,” Defense February 1, 2005, accessed September 30, 2013, http:// News, December 12, 2012, accessed September 30, www.fastcompany.com/52065/hondas-space. 2013, http://www.defensenews.com/article/20121212/ 233 John Couluris, interview by Rebecca Hackler, January 15, DEFREG02/312120007/SpaceX-President-Discusses-U-S- 2013, transcript, C3PO OHP. Air-Force-Launches; Ryan Grim and Jason Cherkis, “Elon Musk Battles Entrenched Rivals Over NASA Contracts,” 234 Giger, interview. Huffington Post,February 20, 2013, accessed September 235 Couluris, interview. 30, 2013, http://www.huffingtonpost.com/2013/02/20/elon- musk-spacex_n_2727312.html. 236 Koenigsmann, interview 237 Horkachuck, interview, November 6, 2012.

126 APPENDIX 238 “NASA’s Marshall Center Concludes Wind Tunnel Testing 254 Horkachuck, interview, November 6, 2012. to Aid in SpaceX Design,” NASA 255 “Space Shuttle Mission STS-127: A Porch in Space,” Marshall Space Flight Center, Press Release 12-058, May 23, NASA Press Kit,” June 2009, 83-84, accessed November 2012, accessed September 30, 2013, http://www.nasa.gov/ 14, 2013, http://www.nasa.gov/pdf/358018main_ Centers/marshall/news/news/releases/2012/12-058.html. sts127_press_kit.pdf; “SpaceX’s DragonEye Navigation 239 Gwynne E. Shotwell, interview by Rebecca Wright, January Sensor Successfully Demonstrated On Space Shuttle,” 15, 2013, transcript, C3PO OHP. Press Release, Space Exploration Technologies Corp., September 24, 2009, accessed November 8, 2013, http:// 240 Horowitz, Final Selection Statement, 3. www.spacex.com/press/2012/12/19/spacexs-dragoneye- 241 A copy of the company’s Space Act Agreement and its navigation-sensor-successfully-demonstrated-space- subsequent amendments is available at Commercial Orbital shuttle; Chris Bergen, “STS-133: SpaceX’s DragonEye Transportation Services Demonstration (COTS), JSC Library, Set for Late Installation on Discovery,” NASASpaceflight, accessed September 30, 2013, http://www.nasa.gov/ July 19, 2010, accessed November 8, 2013, http:// centers/johnson/news/contracts/cots.html. www.nasaspaceflight.com/2010/07/sts-133-spacexs- 242 Alan Marty, interview by Rebecca Hackler, January 18, 2013, dragoneye-late-installation-discovery/. transcript, C3PO OHP. 256 Warren P. Ruemmele, email communication to Commercial 243 Shotwell, interview. Crew & Cargo Program Office, November 8, 2013. 244 John E. Bretschneider (Booz Allen Hamilton), email 257 Couluris, interview; Capozzoli, interview; Horkachuck, communication to JSC History Office, June 13, 2013. interview, November 6, 2012. 245 Michael J. Horkachuck, email communication to Commercial 258 Horkachuck, interview, November 6, 2012; Giger, Crew & Cargo Program Office, November 17, 2013. interview; Capozzoli, interview. See also Hearing before the House Subcommittee on Space and Aeronautics, 246 Horkachuck, interview, November 6, 2012. In interviews “NASA’s Commercial Cargo Providers; Are They Ready with engineers at SpaceX, employees denied such fears, to Supply the Space Station in the Post-Shuttle Era?” always expressing confidence in NASA’s commitment to Hearing Charter, 112th Cong., 1st sess., May 26, 2011, the partnership. Koenigsmann, interview; Peter Capozzoli, 7-8, accessed September 30, 2013, http://science.house. interview by Rebecca Wright, January 16, 2013, transcript, gov/sites/republicans.science.house.gov/files/documents/ C3PO OHP. hearings/052611_charter_1.pdf. 247 Alan J. Lindenmoyer, interview by Rebecca Wright, 259 Horkachuck, interview, November 6, 2012; Valin B. Thorn, November 7, 2012, transcript, C3PO OHP. According to interview by Rebecca Hackler, December 17, 2012, Selection Authority Scott Horowitz, none of the Round 1 transcript, C3PO OHP. competitors scored higher than a 20 percent confidence level for the feasibility of completing their proposals on time 260 Douglas R. Cooke, Selection Statement for the Commercial and on budget. Scott J. Horowitz, interview by Rebecca Orbital Transportation Services Phase 1 Demonstrations Wright, March 1, 2013, transcript, JSC Oral History Project, (Announcement Number JSC-COTS-2), February 15, 2008, JSC History Collection, University of Houston-Clear Lake, 3, Commercial Crew & Cargo Program Office, Houston, TX. Houston, TX. 261 Geoffrey L. Yoder, Selection Statement for Commercial Crew 248 Alan Lindenmoyer, “COTS Status” (PowerPoint presentation Development (Announcement Number JSC-CCDev-1), at NASA Advisory Council meeting, Ames Research Center, December 8, 2009, 19–20, Commercial Crew & Cargo Moffett Field, CA, August 2, 2011), 3, accessed September Program Office, Houston, TX. 30, 2013, http://www.nasa.gov/pdf/580727main_4%20-%20 262 For more on SpaceX’s work with ISS astronauts see Couluris, Lindenmoyer%20COTS%20Status_508.pdf. interview. For details of the launch delays see Chris Bergin, 249 Shotwell, interview. The Associate Administrator of NASA’s “SpaceX, NASA Managers Decide on May 7 Launch Human Exploration and Operations Directorate disagreed, Date Following Slip,” NASASpaceflight,April 23, 2012, stating the company did not believe those tests were accessed September 30, 2013, http://www.nasaspaceflight. necessary. William H. Gerstenmaier, interview by Rebecca com/2012/04/spacexnasa-new-falcon-9-launch-date-slip/. Wright, June 12, 2013, transcript, C3PO OHP. 263 Shotwell, interview. 250 Buzza, interview. 264 For a detailed review of the mission, see Chris Bergin, 251 Horkachuck, interview, November 6, 2012. “SpaceX’s Dragon Berthed on the ISS to Complete Historic Arrival,” NASASpaceflight, May 25, 2012, 252 Ibid. accessed September 30, 2013, http://www. 253 Michael J. Horkachuck, interview by Rebecca Hackler, nasaspaceflight.com/2012/05/spacexs-dragon-historic- January 16, 2013, transcript, C3PO OHP. attempt-berth-with-iss/.

APPENDIX 127 265 See Capozzoli, interview; Kathryn L. Lueders, interview by 277 “The Space Launch Initiative: Technology to Pioneer the Rebecca Hackler, April 17, 2013, transcript, C3PO OHP. Space Frontier,” Marshall Space Flight Center, FS-2002-04- 87-MSFC, April 2002, accessed September 30, 2013, http:// 266 Shotwell, interview; Alan J. Lindenmoyer, interview, www.nasa.gov/centers/marshall/news/background/facts/ November 7, 2012. slifactstext02.html. 267 Buzza, interview. 278 Future of Space Launch Vehicles, Hearing; Brian Berger, 268 “Successful Launch Kicks Off SpaceX’s Historic Mission,” “Entrepreneurial Rocket Firms Face Different Hurdles,” Press Release, Space Exploration Technologies Corp., May Space.com, May 31 2004, accessed September 30, 2013, 22, 2012, accessed September 30, 2013, http://www. http://www.freerepublic.com/focus/f-news/1145377/posts. spacex.com/press/2012/12/19/successful-launch-kicks- 279 Future of Space Launch Vehicles, Hearing. spacexs-historic-mission. 280 Ibid.; Berger, “Entrepreneurial Rocket Firms.” 269 Joan Lisa Bromberg, NASA and the Space Industry (Baltimore: John Hopkins University Press, 1999), 178. 281 George D. French, interview by Rebecca Hackler, May 1, 2013, transcript, C3PO OHP. 270 “Kistler Aerospace Corporation’s K-1,” GlobalSecurity.org, page last modified July 21, 2011, accessed September 30, 282 Ibid. 2013, http://www.globalsecurity.org/space/systems/kistler. 283 Ibid., Lon L. Rains, “Rocketplane’s Majority Owner Buys htm. For more on the Kistler Corp. and the K-1 see Greg Kistler,” Space.com, February 27, 2006, accessed Klerkx, “Back to the Future,” in Lost in Space: The Fall of September 30, 2013, http://www.space.com/2092- NASA and the Dream of a New Space Age (New York: First rocketplane-majority-owner-buys-kistler.html. Vintage Books, 2005), 115–141. 284 Horowitz, Final Selection Statement, Attachment B. 271 See Bruce A. Manners, interview by Rebecca Hackler, December 5, 2013, transcript, C3PO OHP. Mueller explained 285 The Orbital Sciences Corp. briefly worked with Rocketplane the choice of the Woomera launch site as a result of the Kistler as a subcontractor during RpK’s COTS development. difficulty of attaining launch and reentry permits for domestic Orbital officials, aware of RpK’s financial circumstances, launch sites. However, the FAA Office of Commercial Space “parted ways” with the company before the termination Transportation still has jurisdiction over launches conducted of RpK’s Space Act Agreement with NASA. David W. by U.S. companies abroad. Space Shuttle and the Future of Thompson, interview by Rebecca Wright, June 3, 2013, Space Launch Vehicles: Hearing before the Subcommittee transcript, C3PO OHP. Also Antonio L. Elias, interview by on Science, Technology, and Space, United States Senate, Rebecca Hackler, June 3, 2013, transcript, C3PO OHP. 108th Cong., 2d sess., May 5, 2004 (statement of George 286 Space Act Agreement Amendment One between NASA E. Mueller, CEO of Kistler Aerospace Corp.), accessed and Kistler Aerospace Corp. and Rocketplane Limited, September 30, 2013, http://www.Rocketplane Kistler.com/ Inc. for Commercial Orbital Transportation Services newsinfo/pressreleases/060404SenateResponse.html. Demonstration (COTS), accessed September 30, 2013, 272 Space Act Agreement between NASA and Kistler Aerospace http://www.nasa.gov/centers/johnson/pdf/389028main_ Corporation and Rocketplane Limited, Inc. for Commercial kistler_amend1.pdf; “Rocketplane-Kistler (RpK),” NASA Orbital Transportation Services Demonstration (COTS), C3PO; Bruce Manners, “RpK SAA Progress and Plan,” Appendix 1: Technical Approach Summary, 40-42, accessed Commercial Crew & Cargo Program Office, August 16, September 30, 2013, http://www.nasa.gov/centers/johnson/ 2007, 4-5, Commercial Crew & Cargo Program Office, pdf/189226main_kistler_nnj06ta27s.pdf; “Rocketplane- Houston, TX. See also French, interview. Kistler (RpK),” Commercial Partners, NASA C3PO, accessed 287 Manners, “RpK SAA Progress and Plan, 5”; George French, September 30, 2013, http://www.nasa.gov/offices/c3po/ email communication to Commercial Crew & Cargo Program partners/rpk/; “Kistler Aerospace Corporation’s K-1.” Office, November 20, 2013. 273 Randolph H. Brinkley, interview by Rebecca Hackler, May 1, 288 Alan Marty, interview. 2013, transcript, C3PO OHP. 289 Manners, interview; Jonathan A. Arena, interview by Rebecca 274 Joseph W. Cuzzupoli NASA Biographical Data Sheet Hackler, April 22, 2013, transcript, C3PO OHP. (January 1999), Joseph W. Cuzzupoli Biographical File, JSC History Collection, University of Houston-Clear Lake, 290 Arena, interview. University Archives, Houston, TX; Joseph W. Cuzzupoli, 291 Manners, “RpK SAA Progress and Plan,” 5-6. interview by Rebecca Hackler, April 29, 2013, transcript, 292 Manners, interview; Arena, interview. C3PO OHP. 293 Horowitz, interview. 275 Manners, interview. 294 Arena, interview. 276 Warren Fester, “Loral Signs on with Kistler,” SpaceNews, February 3-9, 1997; “Kistler Aerospace Corporation’s K-1.”

128 APPENDIX 295 “NASA Extends Contract with Russia’s Federal Space 313 Robert T. Richards, interview by Rebecca Hackler, June 4, Agency,” NASA Headquarters Press Release, Contract 2013, transcript, C3PO OHP. Release: C07-18, April 9, 2007, accessed September 30, 314 Ibid.; “The Space Launch Initiative: Technology to Pioneer the 2013, http://www.nasa.gov/home/hqnews/2007/apr/HQ_ Space Frontier,” Marshall Space Flight Center, FS-2002-04- C07-18_Roscosmos.html; Randolph H. Brinkley to Scott J. 87-MSFC, April 2002, accessed September 30, 2013, http:// Horowitz, September 20, 2007, 2. Courtesy of Randolph H. www.nasa.gov/centers/marshall/news/background/facts/ Brinkley, email communication to JSC History Office, May slifactstext02.html; 25, 2013. 315 Thompson, interview. 296 Brinkley, interview. 316 See Elias, interview; Richards, interview. 297 French, interview. See also Lindenmoyer, interview, November 7, 2012. 317 Kurt Eberly and Michael R. Pinkston, interview by Rebecca Wright, June 3, 2013, transcript, C3PO OHP; Elias, interview. 298 Randolph H. Brinkley to Scott J. Horowitz, September 20, 2007, 4. 318 “Fact Sheet: Taurus,” Orbital Sciences Corp., accessed September 30, 2013, http://www.orbital.com/NewsInfo/ 299 Brinkley, interview. Publications/Taurus_fact.pdf. 300 Manners, interview; Sumara M. Thompson-King, Courtney B. 319 “Fact Sheet: Antares,” Orbital Sciences Corp., accessed Graham, and Karen M. Reilley, interview by Rebecca Hackler, September 30, 2013, http://www.orbital.com/NewsInfo/ March 19, 2013, transcript, C3PO OHP. Publications/Antares_fact.pdf; Karl Tate, “Private Antares 301 Doug Messier, “Rocketplane Global Filed for Bankruptcy,” Rocket & Cygnus Spacecraft Explained (Infographic),” Space. Parabolic Arc, July 7, 2010, accessed September 30, 2013, com, April 14, 2013, accessed September 30, 2013, http:// http://www.parabolicarc.com/2010/07/07/rocketplane- www.space.com/20526-antares-rocket-cygnus-spacecraft- global-files-bankruptcy/. explained.html. 302 French, interview; Jennifer Palmer, “Rocketplane Emerges 320 “Fact Sheet: Antares”; Eberly and Pinkston, interview. from Bankruptcy, Keeps Reaching for Moon,” NewsOK 321 Elias, interview. (Oklahoma), Janury 14, 2013, accessed September 30, 2013, http://newsok.com/rocketplane-emerges-from-bankruptcy- 322 Peter B. Selding, “Dutch Space To Build Solar Arrays for keeps-reaching-for-moon/article/3745490/?page=1; Doug Cygnus,” SpaceNews, November 12, 2009, accessed Messier, “Rocketplane Global Out of Bankruptcy, Seeks September 30, 2013, http://www.spacenews.com/article/ Funding for Space Plane,” Parabolic Arc, February 28, 2012, dutch-space-build-solar-arrays-cygnus#.UcCzY_nVA1I. accessed September 30, 2013, http://www.parabolicarc. In August 2013, Orbital announced that for its fifth ISS com/2012/02/28/rocketplane-global-out-of-bankruptcy- resupply mission, the enhanced version of the Cygnus PCM seeks-funding-for-space-plane/. would instead utilize solar arrays originally developed by Alliant Techsystems, Inc. (ATK) for NASA’s Orion capsule. 303 Cuzzupoli, interview. Dan Leone, “Ousted from First Orion Flight, Circular ATK 304 Brinkley, interview. Solar Arrays Still Set to Power Cygnus,” SpaceNews, August 1, 2013, accessed September 30, 2013, 305 Bromberg, 119-120; Dave Thompson, “An Exciting http://www.spacenews.com/article/civil- Adventure Is In Store (1982-1986),” in An Adventure Begins: space/36576ousted-from-first-orion-flight-circular-atk-solar- Orbital’s First 25 Years (Dulles, VA: Orbital Sciences Corp., arrays-still-set-to-power. 2007), 6-15. 323 Space Act Agreement between NASA and Orbital 306 Thompson, interview. Corporation for Commercial Orbital Transportation Services 307 Bromberg, 119-120; Elias, interview. Demonstration (COTS), Appendix 1, E3. Technical Approach, 308 Thompson, “An Exciting Adventure,” 10. accessed September 30, 2013, http://www.nasa.gov/ centers/johnson/pdf/214893main_Orbital_COTS_Ph1_ 309 Ibid., 14; Bromberg, 155; Elias, interview. Redacted_SAA_2_27_08.pdf. 310 David P. Gump, Space Enterprise: Beyond NASA (New York: 324 Frank DeMauro, interview by Rebecca Hackler, June 4, 2013, Praeger, 1990), 1. transcript, C3PO OHP. 311 Ibid., 35-36. 325 Eberly and Pinkston, interview. 312 Elias, interview. For more on the Pegasus rocket see 326 Ibid. “Fact Sheet: Pegasus,” Orbital Sciences Corp., accessed September 30, 2013, http://www.orbital.com/SpaceLaunch/ 327 Frank L. Culbertson, interview by Rebecca Wright, June 4, Pegasus/ and Antonio Elias, “The Pegasus Rocket: We Said 2013, transcript, C3PO OHP. We’d Do It… And We Did It! (1987–1990),” in An Adventure 328 Ibid. Begins: Orbital’s First 25 Years, 18–31.

APPENDIX 129 329 SpaceUp Houston, 2013 Commercial Spaceflight Panel, Part 347 Eberly and Pinkston, interview. See also DeMauro, interview. 1 - COTS/CCiCap, Houston, TX, February 8, 2013, accessed 348 “Orbital Successfully Launches First Antares Rocket,” Press September 30, 2013, http://livestre.am/4kEmv. Release, Orbital Sciences Corp., April 21, 2013, accessed 330 Thompson, interview. See also David W. Thompson, “Space September 30, 2013, http://www.orbital.com/NewsInfo/ Enterprise and Capital Formation” (paper presented at the release.asp?prid=852; Jonathan Amos, “Orbital’s Antares Financing Business in Space Conference, Arlington, VA, Rocket Makes Test Flight,” BBC News, April 21 2013, March 27, 1984), discussed in Edward Ridley Finch, Jr. accessed September 30, 2013, http://www.bbc.co.uk/news/ and Amanda Lee Moore, Astrobusiness: A Guide to the science-environment-22193330; William Graham, “Antares Commerce and Law of Outer Space (New York: Praeger, Conducts a Flawless Maiden Launch,” NASASpaceflight, 1984), 48-49. April 21, 2013, accessed September 30, 2013, http://www. nasaspaceflight.com/2013/04/orbital-antares-debut-launch- 331 Garrett Pierce, “Financings, Acquisitions, and Divestitures: attempt/; Brock Vergakis, “Rocket That Will Carry Cargo Ship No Bucks, No Buck Rogers (1988-2003),” in An Adventure Test Launched,” , April 21, 2013, accessed Begins: Orbital’s First 25 Years, 100. September 30, 2013, http://bigstory.ap.org/article/rocket- 332 David W. Thompson, email communication to JSC will-carry-cargo-ship-test-launched-1. History Office, November 19, 2013; Thompson, interview; 349 DeMauro, interview. Culbertson, interview. 350 Eberly and Pinkston, interview. 333 See Elias, interview. A copy of Orbital’s Space Act Agreement and its subsequent amendments is available at Commercial 351 DeMauro, interview. Orbital Transportation Services Demonstration (COTS), JSC 352 Ben Evans, “Antares Mission Flies Low-Cost Smartphone Library, accessed September 30, 2013, http://www.nasa. Satellites,” America Space, April 24, 2013, accessed gov/centers/johnson/news/contracts/cots.html. September 30, 2013, http://www.americaspace. 334 Manners, interview. com/?p=34813. 335 Eberly and Pinkston, interview. 353 Ben Evans, “Orbital Sciences Primed for First Cygnus Cargo Mission to Space Station,” America Space, 336 Ibid. September 16, 2013, accessed September 20, 2013, 337 Culbertson, interview. http://www.americaspace.com/?p=42271. Orbital’s funded 338 Ibid.; Eberly and Pinkston, interview. Space Act Agreement with NASA was signed on Low’s 52nd birthday, February 19, 2008. Low died of colon cancer 339 “History of MARS,” Mid-Atlantic Regional Spaceport, less than one month later on March 15, 2008. accessed September 30, 2013, http://www.marsspaceport. com/mid-atlantic-spaceport-history. 354 Dan Leone, “Cygnus on Way to Station, Orbital Sciences on Way to Collecting from NASA,” SpaceNews, 340 The State of Virginia allocated $10 million via infrastructure September 18, 2013, accessed September 20, 2013, bonds through the Virginia Public Building Authority to http://www.spacenews.com/article/launch- “Improve Wallops Island Flight Facilities” for the 2008 to report/37284cygnus-on-way-to-station-orbital-sciences-on- 2010 biennium. See “Capital Projects for the 2008–2010 way-to-collecting-from-nasa. Biennium,” Commonwealth of Virginia Department of Transportation, accessed September 30, 2013, 355 Ben Evans, “A Beautiful Swan Came Calling: Orbital’s http://dpb.virginia.gov/budget/buddoc09/pdf/partb/ Cygnus Cargo Ship Arrives at Space Station,” America Rpt0510aDetailTablesCapital.pdf. Space, September 29, 2013, accessed October 1, 2013, http://www.americaspace.com/?p=43097. See also Chris 341 Elias, interview. Bergen, “Orbital’s Cygnus successfully berthed on the 342 Thompson, interview. ISS,” NASASpaceflight,September 29, 2013, accessed October 1, 2013, http://www.nasaspaceflight.com/2013/09/ 343 Elias, interview. cygnus-second-attempt-berth-iss/ and Jonathan Amos, 344 “Orbital Begins Antares Rocket Operations at Mid-Atlantic “Orbital’s Cygnus freighter reaches International Space Regional Spaceport,” Press Release, Orbital Sciences Station,” BBC News, September 29, 2013, accessed Corp., October 1, 2012, accessed September 30, 2013, October 1, 2013, http://www.bbc.co.uk/news/science- http://www.orbital.com/NewsInfo/release.asp?prid=829; environment-24306173. Thompson, interview; Elias, interview; Eberly and Pinkston, 356 NASA Television, “Recapping the Flight of Cygnus” (Press interview; Manners, interview. Conference, Johnson Space Center, Houston, Texas, 345 Alan Lindenmoyer, “COTS Status.” September 29, 2013), accessed October 1, 2013, http:// 346 For more on Orbital’s application of the augmentation www.youtube.com/watch?v=Hslr5jkR568. funding see Thompson, interview; Elias, interview; and 357 Manners, interview. Richards, interview.

130 APPENDIX 358 Mark Carreau, “NASA Approves Orbital Sciences For ISS 370 Michael J. Horkachuck, interview by Rebecca Wright, Commercial Resupply Missions,” Aviation Week & Space November 6, 2013, transcript, C3PO OHP. Technology, October 1, 2013, accessed October 2, 2013, 371 Shotwell, interview. See also Lueders, interview. http://www.aviationweek.com/Article.aspx?id=/article-xml/ asd_10_01_2013_p01-02-622251.xml. Although Orbital was 372 Hans Koenigsmann, interview by Rebecca Hackler, January prepared to complete the first CRS mission by December 15, 2013, transcript, C3PO OHP. 2013, the launch was delayed until January due to technical 373 Elias, interview. issues aboard the ISS. “NASA Postpones Orbital Launch, Sets Spacewalks to Repair Faulty Pump Module,” NASA, 374 Lueders, interview; Buzza, interview. December 17, 2013, accessed February 24, 2014, http:// 375 Lueders, interview. www.nasa.gov/content/nasa-postpones-orbital-launch-sets- 376 Ibid.; William Gerstenmaier, “Need for Commercial Cargo spacewalks-to-repair-faulty-pump-module/. to ISS” (PowerPoint presentation at Commercial Space 359 NASA Television, “Recapping the Flight of Cygnus.” Transportation Advisory Committee meeting, Washington, 360 Orbital Sciences Corp., An Adventure Begins: Orbital’s First DC, May 18, 2007), 3, accessed September 30, 2013, http:// 25 Years (Dulles, VA: Orbital Sciences Corp., 2007), 63. www.faa.gov/about/office_org/headquarters_offices/ast/ advisory_committee/meeting_news/media/COMSTAC_ Gerstenmaier%205_18_07.ppt. Chapter 6 377 Issues Facing the U.S. Space Program after Retirement 361 John K. Trainor, “International Space Station Program: Safety of the Space Shuttle: Hearing before the Subcommittee Review Process” (PowerPoint presentation, December on Space, Aeronautics, and Related Sciences, United 6, 2006), 3, Commercial Crew & Cargo Program Office, States Senate, 110th Cong., 1st sess., November 15, Houston, TX. 2007 (statement of Michael D. Griffin, NASA Administrator), accessed September 30, 2013, http://www.hq.nasa.gov/ 362 The first ATV mission did not launch until March 9, 2008, legislative/hearings/2007%20hearings/11-15-07%20Griffin. roughly a year and a half after the first COTS Space Act pdf; Michael Suffredini, “ISS Commercial Resupply Services” Agreements were signed. The final ATV mission is scheduled (PowerPoint presentation for , June 17, for 2014. “Automated Transfer Vehicle,” European Space 2009), accessed September 30, 2013, http://www.nasa.gov/ Agency, accessed November 8, 2013, http://www.esa. pdf/361840main_13a%20-%20UPDATED%20Augustine%20 int/Our_Activities/Human_Spaceflight/ATV. The first HTV CRS%20final.pdf; Randolph H. Brinkley to Scott J. Horowitz, mission launched in September 2011. “HTV-1 Mission,” September 20, 2007, 2. Courtesy of Randolph H. Brinkley, Japan Aerospace Exploration Agency, accessed November email communication to JSC History Office, May 25, 2013. 8, 2013, http://iss.jaxa.jp/en/htv/mission/htv-1/. Griffin stated in his testimony that the RFI was issued on July 363 Kathryn L. Lueders, interview by Rebecca Hackler, April 7, 2007, but the other available sources state the date of 17, 2013, transcript, Commercial Crew & Cargo Program issue as August 7, 2007. Office History Project, JSC History Collection, University of 378 Suffredini, “ISS Commercial Resupply Services,” 4; Lueders, Houston-Clear Lake, Houston, TX (hereafter cited as C3PO interview. NASA Headquarters attorney Courtney Graham OHP). discussed how the timing of the CRS contract has led to 364 Ibid. the mistaken assumption within NASA that there is a natural 365 Ibid. transition from Space Act Agreement to contract in what is often referred to as the COTS/CRS model, when in actuality 366 Frank DeMauro, interview by Rebecca Hackler, June 4, there is no requirement for a follow-on procurement. Sumara 2013, transcript, C3PO OHP. For more details and examples M. Thompson-King, Courtney B. Graham, and Karen M. from the SpaceX perspective see John Couluris, interview Reilley, interview by Rebecca Hackler, March 19, 2013, by Rebecca Hackler, January 15, 2013, transcript, C3PO transcript, C3PO OHP. OHP; David Giger, interview by Rebecca Hackler, January 15, 2013, transcript, C3PO OHP; and Tim Buzza, interview by 379 William H. Gerstenmaier, interview by Rebecca Wright, June Rebecca Wright, January 15, 2013, transcript, C3PO OHP. 12, 2013, transcript, C3PO OHP. See also Lueders, interview. 367 DeMauro, interview; Antonio L. Elias, interview by Rebecca 380 Thompson-King, Graham, and Reilley, interview. Hackler, June 3, 2013, transcript, C3PO OHP; Frank L. 381 Gerstenmaier, interview. Culbertson, interview by Rebecca Wright, June 4, 2013, 382 Government Accountability Office, Decision, Matter of: transcript, C3PO OHP. PlanetSpace, Inc., B-401016; B-401016.2, April 22, 368 Gwynne E. Shotwell, interview by Rebecca Wright, January 2009, accessed September 30, 2013, http://gao.gov/ 15, 2013, transcript, C3PO OHP. assets/390/385763.pdf. 369 Michael J. Horkachuck, interview by Rebecca Hackler, 383 Ibid., 1. January 16, 2013, transcript, C3PO OHP. 384 Ibid., 7.

APPENDIX 131 385 “NASA Awards Space Station Commercial Resupply Services Transportation Lecture Series (Washington, DC: Office Contracts,” Contract Release: C08-069, NASA Headquarters of the Associate Administrator for Commercial Space Press Release, December 23, 2008, accessed September Transportation, April 2003), 2-20, accessed September 30, 30, 2013, http://www.nasa.gov/home/hqnews/2008/dec/ 2013, http://www.faa.gov/about/office_org/headquarters_ HQ_C08-069_ISS_Resupply.html. offices/ast/reports_studies/archives/media/Volume_1.pdf. 386 GAO, Decision, Matter of: PlanetSpace, Inc. 402 George C. Nield, interview by Rebecca Hackler, March 20, 2013, transcript, C3PO OHP. Nield began his tenure 387 Gerstenmaier, interview; Thompson-King, Graham, and at the FAA in 2003 as Deputy Associate Administrator Reilley, interview. for AST, and in 2008 was promoted to the Associate 388 Lueders, interview. Administrator for Commercial Spaceflight. Nield previously 389 Ibid. See also Alan J. Lindenmoyer, interview by Rebecca worked in the Space Shuttle Program at the NASA Johnson Wright, November 7, 2012, transcript, C3PO OHP. Space Center, followed by a few years at Orbital Sciences Corp. as the Senior Scientist for the Advanced Programs 390 Elias, interview. Group. “Dr. George C. Nield,” Office of Commercial Space 391 Lueders, interview. Transportation, Federal Aviation Administration, last modified April 22, 2008, accessed September 30, 2013, http://www. 392 Ibid. faa.gov/about/key_officials/nield/. 393 Commercial Cargo Augmentation White Paper, May 19, 403 George Nield, interview by David Livingston, The Space 2010, 3, Commercial Crew & Cargo Program Office, Show (podcast), Broadcast 984, July 20, 2008, accessed Houston, TX. September 30, 2013, http://www.thespaceshow.com/detail. 394 NASA attorney Amy V. Xenofos described how she worked asp?q=984. with C3PO and other members of the legal team to ensure 404 Kurt Eberly and Michael R. Pinkston, interview by Rebecca the additional milestones fit within the scope of the original Wright, June 3, 2013, transcript, C3PO OHP. COTS Announcement and proposals. Amy V. Xenofos, interview by Rebecca Hackler, December 7, 2012, transcript, 405 “Licenses, Permits & Approvals,” Office of Commercial Space C3PO OHP. Transportation, Federal Aviation Administration, last modified July 30, 2012, accessed September 30, 2013, http://www. 395 Budget analysis by C3PO Resource Analysts Todd M. faa.gov/about/office_org/headquarters_offices/ast/licenses_ Hegemier and Lisa P. Price. permits/safety_approvals/. 396 For the legal perspective on carrying cargo on the COTS 406 George C. Nield, email communication to JSC History Office, demonstration flights see Xenofos, interview. November 5, 2013. 397 Commercial Launch Vehicles: NASA Taking Measures 407 Commercial Space Launch Amendments Act of 2004, Public to Manage Delays And Risks: Hearing before the Law 108-492, 108th Cong., 2d. sess., (December 23, 2004), Subcommittee on Space and Aeronautics, United States accessed September 30, 2013, http://www.faa.gov/about/ House of Representatives, 112th Cong., 1st sess., office_org/headquarters_offices/ast/media/PL108-492. May 26, 2011 (statement of Cristina T. Chaplain, GAO pdf. See also “House Approves H.R. 3752, The Commercial Director of Acquisition and Sourcing Management), Space Launch Amendments Act of 2004,” House of accessed September 30, 2013, http://www.gao.gov/ Representatives Press Release, March 4, 2004, accessed assets/130/126310.pdf. September 30, 2013, http://www.spaceref.com/news/ 398 Horkachuck, interview, January 16, 2013. viewpr.html?pid=13774. 399 Bryan D. O’Connor, interview by Rebecca Wright, December 408 FAA Modernization and Reform Act of 2012, Public Law 18, 2012, transcript, JSC Oral History Project, JSC History 112–95, 112th Cong., 2d. sess. (February 12, 2012), Collection, University of Houston-Clear Lake, Houston, TX. §827, accessed September 30, 2013, http://www. 400 Cheryl Pellerin, “U.S. Agency Proposes Rules for Commercial faa.gov/regulations_policies/reauthorization/media/ Human Space Flights,” IIP Digital, January 13, 2006, accessed PLAW-112publ95[1].pdf. See also Hearing before the September 30, 2013, http://iipdigital.usembassy.gov/st/ Subcommittee on Science and Space, United States english/article/2006/01/20060112141230lcnirellep0.3723871. Senate, 112th Cong., 2d sess., June 20, 2012 (statement html#ixzz2Scxepl3O. of Michael Lopez-Alegria, President of the Commercial Spaceflight Federation), accessed September 30, 2013, 401 “About the Office,” Office of Commercial Space http://www.hq.nasa.gov/legislative/hearings/2012%20 Transportation, Federal Aviation Administration, last modified hearings/6-20-2012%20LOPEZ-ALEGRIA.pdf. February 13, 2013, accessed September 30, 2013, http:// www.faa.gov/about/office_org/headquarters_offices/ast/ 409 See Jeff Foust, “Doubting Indemnification,”Space Politics about/. See also Ronald K. Gress, “The Early Years, AST (blog), March 27, 2012, accessed September 30, 2013, – A Historical Perspective,” in 2002 Commercial Space http://www.spacepolitics.com/2012/03/27/doubting- indemnification/; Michael Lopez-Alegria, statement.

132 APPENDIX 410 Government Accountability Office, Commercial Space Chapter 8 Launches: FAA Needs Continued Planning and Monitoring to Oversee the Safety of the Emerging Space Tourism Industry, 423 “NASA Hails Success of Commercial Space Program GAO-07-16, October 2006, accessed September 30, 2013, Private Space Station Resupply Underway, Plans Readied http://www.gao.gov/assets/260/252808.pdf. for Astronauts,” NASA Press Release, November 13, 2013, accessed November 14, 2013, http://www.nasa.gov/ 411 Nield, interview. press/2013/november/nasa-hails-success-of-commercial- space-program-private-space-station-resupply/. Chapter 7 424 Vision for Space Exploration (Washington, DC: NASA, 412 Commercial Crew Development, Announcement Number February 2004), introductory material, accessed September JSC-CCDev-1, Commercial Crew & Cargo Program Office, 30, 2013, http://www.nasa.gov/pdf/55583main_vision_ August 10, 2009, 1, Commercial Crew & Cargo Program space_exploration2.pdf. Emphasis added. Office, Houston, TX. The Program Integration Manager at 425 Michael J. Horkachuck, interview by Rebecca Wright, JSC complied with the reporting requirements associated November 6, 2013, transcript, Commercial Crew & Cargo with these funds. Dennis A. Stone, email communication to Program Office History Project, JSC History Collection, JSC History Office, October 29, 2013. University of Houston-Clear Lake, Houston, TX (hereafter 413 Assessing Commercial Space Capabilities: Hearing before the cited as C3PO OHP). See also Amy V. Xenofos, interview Subcommittee on Science and Space, United States Senate, by Rebecca Hackler, December 7, 2012, transcript, C3PO 111th Cong., 2d sess., March 18, 2010 (statement of Bryan OHP and Alan J. Lindenmoyer, interview by Rebecca Wright, O’Connor, NASA Chief of Safety and Mission Assurance), October 31, 2012, transcript, C3PO OHP. Congressional accessed September 30, 2013, http://www.gpo.gov/fdsys/ testimony by GAO representatives in 2007 reported that pkg/CHRG-111shrg66983/pdf/CHRG-111shrg66983.pdf. NASA planned to use the commercial services under development to fill the gap between Shuttle retirement and 414 Geoffrey L. Yoder, Selection Statement for Commercial Crew NASA’s new Orion and Ares vehicles. See Issues Surrounding Development (Announcement Number JSC-CCDev-1), the Transition from the Space Shuttle to the Next Generation December 8, 2009, 18, Commercial Crew & Cargo Program of Human Space Flight Systems: Hearing before the Office, Houston, TX. Subcommittee on Space, Aeronautics, and Related Sciences, 415 Ibid. United States Senate, 110th Cong., 1st sess., March 28, 416 Ibid., 19. 2007 (statement of Allen Li, GAO Director of Acquisition and Sourcing Management), accessed September 30, 2013, 417 “CCDev Information,” NASA Commercial Crew & Cargo http://www.gao.gov/assets/120/116060.pdf. Program Office, last updated March 7, 2012, accessed November 20, 2013, http://www.nasa.gov/offices/c3po/ 426 William H. Gerstenmaier, interview by Rebecca Wright, June partners/ccdev_info.html. 12, 2013, transcript, C3PO OHP. 418 Alan Lindenmoyer to Michael J. Holquin (United Launch 427 Hearing Charter: NASA’s Commercial Cargo Providers; Are Alliance), April 5, 2011, Commercial Crew & Cargo Program They Ready to Supply the Space Station in the Post-Shuttle Office, Houston, TX. CCDev Space Act Agreements Era?: Hearing before the Subcommittee on Space and courtesy of the Commercial Crew & Cargo Program Office, Aeronautics, United States House of Representatives,112th Houston, TX. Cong., 1st sess., May 26, 2011, 7, accessed September 30, 2013, http://science.house.gov/sites/republicans.science. 419 “Commercial Crew Program,” NASA Fact Sheet FS-2013-04- house.gov/files/documents/hearings/052611_charter_1.pdf. 084-KSC, accessed September 30, 2013, http://www.nasa. gov/pdf/608888main_CCP.pdf. 428 Horkachuck, interview; Alan J. Lindenmoyer, interview by Rebecca Wright, November 7, 2012, transcript, C3PO OHP; 420 “NASA Awards Next Set Of Commercial Crew Development Marc G. Timm, interview by Rebecca Wright, June 12, 2013, Agreements,” NASA Headquarters Press Release, April 18, transcript, C3PO OHP. 2011, accessed September 30, 2013, http://www.nasa.gov/ home/hqnews/2011/apr/HQ_11-102_CCDev2.html. 429 “Statement on the Launch of Antares,” White House Office of Science and Technology Policy, April 21, 2013, 421 “NASA Awards Commercial Crew Certification Contracts,” accessed September 30, 2013,http://www.whitehouse.gov/ NASA Commercial Space Transportation, December 11, blog/2013/04/21/statement-launch-antares. 2012, accessed September 30, 2013, http://www.nasa.gov/ exploration/commercial/crew/cpc-awards.html. 430 NASA Office of Inspector General,NASA’s Efforts to Maximize Research on the International Space Station, 422 Denise Chow, “NASA Revises Plan to Buy Private Space Report No. IG-13-019, July 8, 2013, i, accessed Taxis,” Space.com, December 15, 2011, accessed September 30, 2013,http://oig.nasa.gov/audits/reports/ September 30, 2013, http://www.space.com/13953-nasa- FY13/IG-13-019.pdf. commercial-crew-space-act-agreements.html.

APPENDIX 133 431 “NASA Hails Success of Commercial Space Program 442 SpaceUp Houston, 2013 Commercial Spaceflight Panel, Private Space Station Resupply Underway, Plans Readied Part 1 - COTS/CCiCap, Houston, TX, February 8, 2013, for Astronauts,” NASA Press Release, November 13, 2013, accessed September 30, 2013, http://livestre.am/4kEmv; accessed November 14, 2013, http://www.nasa.gov/ Frank DeMauro, interview by Rebecca Hackler, June 4, 2013, press/2013/november/nasa-hails-success-of-commercial- transcript, C3PO OHP; Frank L. Culbertson, interview by space-program-private-space-station-resupply/. Rebecca Wright, June 4, 2013, transcript, C3PO OHP. 432 Kathryn L. Lueders, interview by Rebecca Hackler, April 17, 443 Robert T. Richards, interview by Rebecca Hackler, June 4, 2013, transcript, C3PO OHP; Peter Capozzoli, interview by 2013, transcript, C3PO OHP. See also David W. Thompson, Rebecca Wright, January 16, 2013, transcript, C3PO OHP. interview by Rebecca Wright, June 3, 2013, transcript, C3PO OHP. 433 Randolph H. Brinkley, interview by Rebecca Hackler, May 1, 2013, transcript, C3PO OHP. 444 Lori Garver, “Business at the Speed of Innovation” (speech delivered at International Symposium for Personal and 434 Frank Morring, Jr., “Gerstenmaier: ISS Will Shape Commercial Spaceflight, Las Cruces, , October Commercial Spaceflight,”Aviation Week & Space Technology, 20, 2011), accessed September 30, 2013, http://www.nasa. February 7, 2013, accessed September 30, 2013, http:// gov/pdf/598634main_102011_Garver_Remarks_FINAL.pdf. www.aviationweek.com/Article.aspx?id=/article-xml/ asd_02_07_2013_p04-02-545867.xml. For more on 445 The government investment total for Orbital included potential scientific uses of suborbital and orbital space approximately $137 million in funding sources other vehicles see S. Alan Stern, “The Low-Cost Ticket to Space,” than COTS, including the ISS Program, the NASA Wallops Scientific American,April 2013. Flight Facility, and the Commonwealth of Virginia. David W. Thompson, email communication to JSC History 435 NASA’s Efforts to Maximize Research on the International Office and Commercial Crew & Cargo Program Office, Space Station, 4. November 21, 2013. 436 See “Fact Sheet: NanoRacks Platforms,” International 446 NASA Associate Deputy Administrator for Policy, “Falcon Space Station, NASA, accessed November 8, 2013, 9 Launch Vehicle NAFCOM Cost Estimates” (PowerPoint http://www.nasa.gov/mission_pages/station/research/ presentation, August 2011), accessed September 30, 2013, experiments/829.html. http://www.nasa.gov/pdf/586023main_8-3-11_NAFCOM.pdf. 437 See NASA’s Efforts to Maximize Research on the International 447 Budget analysis by Todd M. Hegemier and Lisa P. Price, Space Station, 9. C3PO Resource Analysts. See also “Falcon 9,” Space 438 Gerstenmaier, interview. See also James A.M. Muncy, Exploration Technologies Corp., accessed September 30, interview by Rebecca Wright, June 21, 2013, transcript, 2013, http://www.spacex.com/falcon9. C3PO OHP. 448 Lisa P. Price, interview by Rebecca Hackler, May 14, 2013, 439 “NASA to Test Bigelow Expandable Module on Space transcript, C3PO OHP. Price was unable to share more Station,” International Space Station Feature, January 16, specific figures due to the priority to protect competition 2013, accessed September 30, 2013, http://www.nasa.gov/ sensitive information. See also NASA Aerospace Safety mission_pages/station/news/beam_feature.html; Kenneth Advisory Panel, Annual Report for 2013, 12, January 15, Chang, “For Space Station, a Pod That Folds Like a Shirt 2014, accessed February 24, 2014, http://oiir.hq.nasa.gov/ and Inflates Like a Balloon,”New York Times, January asap/documents/2013_ASAP_Annual_Report.pdf. 16, 2013, accessed September 30, 2013, http://www. 449 Government Accountability Office, Commercial Partners nytimes.com/2013/01/17/science/space/for-nasa-bigelow- Are Making Progress, but Face Aggressive Schedules aerospaces-balloonlike-module-is-innovative-and-a-bargain- to Demonstrate Critical Space Station Cargo Transport too.html. Capabilities, GAO-09-618, June 2009, 9, accessed 440 Irene Klotz, “NASA Pushing to Keep ‘Space Taxi’ Competition September 30, 2013, http://www.gao.gov/new.items/ Going,” , July 31, 2013, accessed September 30, d09618.pdf. 2013, http://www.reuters.com/article/2013/07/31/us-space- 450 Mike Horkachuck, conversation with JSC History taxis-idUSBRE96U1IY20130731. Office at SpaceX headquarters in Hawthorne, California, 441 “DragonLab Fact Sheet,” Space Exploration Technologies January 16, 2013. Corp., accessed September 30, 2013, http://www.spacex. 451 Lauren Hepler, “Mars needs workers! Space startups com/sites/spacex/files/pdf/DragonLabFactSheet.pdf; David desperate for talent,” Silicon Valley Business Journal, July Giger, interview by Rebecca Hackler, January 15, 2013, 19, 2013, accessed September 30, 2013, http://www. transcript, JSC Oral History Project, C3PO OHP; John bizjournals.com/sanjose/news/2013/07/18/the-next-stem- Couluris, interview by Rebecca Hackler, January 15, 2013, talent-crunch-space-tech.html?page=all. transcript, C3PO OHP.

134 APPENDIX 452 “History of MARS,” Mid-Atlantic Regional Spaceport, 461 Kurt Eberly and Michael R. Pinkston, interview by Rebecca accessed September 30, 2013, http://www.marsspaceport. Wright, June 3, 2013, transcript, C3PO OHP. com/mid-atlantic-spaceport-history. 462 Traci Watson, “Second Private Spacecraft Set for Space 453 Kody Leibowitz, “Antares Set To Launch Wednesday With Station Run,” USA Today, September 18, 2013, accessed High Hopes From Congress,” WMDT 47 News, September September 30, 2013, http://www.usatoday.com/story/news/ 17, 2013, accessed September 30, 2013, http://www.wmdt. nation/2013/09/17/spacecraft-resupply-international-space- com/story/23458667/antares-set-to-launch-wednesday- station/2825541/. with-high-hopes-from-congress. 463 “World’s First Commercial Space Operations Degree OK’d 454 “Goal and Objectives,” Commercial Crew & Cargo Program for Liftoff at Embry-Riddle,” Embry-Riddle Aeronautical Office, accessed September 30, 2013,http://www.nasa.gov/ University Press Release, March 26, 2013, accessed offices/c3po/home/c3po_goal_objectives.html. September 30, 2013, http://daytonabeach.erau.edu/news/ space-operations-degree.html; Deborah Circelli, “ERAU 455 Sumara M. Thompson-King, Courtney B. Graham, and Karen students over the moon about new degree,” Daytona Beach M. Reilley, interview by Rebecca Hackler, March 19, 2013, News-Journal, September 8, 2013, accessed September 30, transcript, C3PO OHP. 2013, http://www.news-journalonline.com/article/20130908/ 456 Since ending his term as Administrator, Mike Griffin has NEWS/130909512/1042/NEWS0401?Title=ERAU-students- argued for the establishment of a Moon base in order to in-outer-space-with-new-degree&tc=ar. build a truly commercial space transportation industry— 464 Zach Rosenberg, “Worldwide Space Economy Grew what Griffin had originally envisioned at the outset of the in 2011,” Flight International, April 2, 2013, accessed COTS program. This new outpost would require much September 30, 2013, http://www.flightglobal.com/news/ greater cargo delivery services than the ISS. Michael articles/worldwide-space-economy-grew-in-2011-384121/. D. Griffin, “Enabling Complementary Commercial and Government Enterprises in Space” (paper presented at the 465 Clayton M. Christensen, The Innovator’s Dilemma: The 62nd International Astronautical Congress, Cape Town, Revolutionary Book That Will Change the Way You Do South Africa, October 3–7, 2011). Business (New York: Harper Business, 2011), 165. Emphasis in the original. 457 Timm, interview. See also Lori B. Garver, interview by Rebecca Wright, June 26, 2013, transcript, C3PO OHP. 466 NASA Aerospace Safety Advisory Panel, Annual Report for 2013, 19. 458 Timm, interview; Irene Klotz, “ Braces for Competition from Low-Cost U.S. Satellite Launcher,” Reuters, June 467 Ibid. 19, 2013, accessed September 30, 2013, http://www. 468 NASA Policy Directive 1000.5B, Policy for NASA Acquisition, reuters.com/article/2013/06/19/us-air-show-spacex- December 19, 2013, accessed February 24, 2014, http:// idUSBRE95I16D20130619. See also Hearing before the nodis3.gsfc.nasa.gov/displayDir.cfm?t=NPD&c=1000&s=5B. Subcommittee on Science and Space, United States Senate, 112th Cong., 2d sess., June 20, 2012 (statement 469 “Enhancing NASA Partnerships,” NASA Executive Council, of Michael Lopez-Alegria, President of the Commercial Decision Memo EC-2013-05-001a, July 17, 2013, Spaceflight Federation), accessed September 30, 2013, Commercial Crew & Cargo Program Office, Houston, TX. http://www.hq.nasa.gov/legislative/hearings/2012%20 470 Bretton Alexander, interview by Rebecca Wright, March 18, hearings/6-20-2012%20LOPEZ-ALEGRIA.pdf. 2013, transcript, C3PO OHP. 459 Klotz, “Europe Braces for Competition”; Jonathan Amos, 471 Garver, interview. “ESA Selects Basic Design,” BBC News, July 9, 2013, accessed September 30, 2013, http://www.bbc. 472 Alan J. Lindenmoyer, “The COTS Model for NASA Public- co.uk/news/science-environment-23241158. Arianespace Private Partnerships,” April 18, 2010. Commercial Crew & has been in competition with the U.S. launch market since Cargo Program Office, Houston, TX. the company’s founding in 1980. See David P. Gump, Space 473 Editorial, “A Space Policy Success Story,” SpaceNews, Enterprise: Beyond NASA (New York: Praeger, 1990), 41–42. December 16, 2013, accessed February 27, 2014, http:// For a list of future contracted SpaceX missions see “Launch www.spacenews.com/article/opinion/38718editorial-a- Manifest,” Space Exploration Technologies Corp., accessed space-policy-success-story. Reprinted by permission of September 30, 2013, http://www.spacex.com/missions. Brian Berger, (SPACENEWS), 460 Warren Ferster, “$900M in Pentagon Launch Contracts email communication to Commercial Crew & Cargo Program Awarded to Lockheed, Orbital, SpaceX,” SpaceNews, Office, February 27, 2014. December 3, 2012, accessed September 30, 2013, www. spacenews.com/article/900m-in-pentagon-launch-contracts- awarded-to-lockheed-orbital-spacex.

APPENDIX 135 Form Approved REPORT DOCUMENTATION PAGE OMB No. 0704-0188 Public reporting burden for this collection of information is estimated to average 1 hour per response, including the time for reviewing instructions, searching existing data sources, gathering and maintaining the data needed, and completing and reviewing the collection of information. Send comments regarding this burden estimate or any other aspect of this collection of information, including suggestions for reducing this burden, to Washington Headquarters Services, Directorate for Information Operations and Reports, 1215 Jefferson Davis Highway, Suite 1204, Arlington, VA 22202-4302, and to the Office of Management and Budget, Paperwork Reduction Project (0704-0188), Washington, DC 20503. 1. AGENCY USE ONLY (Leave Blank) 2. REPORT DATE 3. REPORT TYPE AND DATES COVERED May 2014 Special Publication 4. TITLE AND SUBTITLE 5. FUNDING NUMBERS Commercial Orbital Transportation Services: A New Era in Spaceflight

6. AUTHOR(S) Rebecca Hackler

7. PERFORMING ORGANIZATION NAME(S) AND ADDRESS(ES) 8. PERFORMING ORGANIZATION REPORT NUMBERS Lyndon B. Johnson Space Center S-1153 Houston, Texas 77058

9. SPONSORING/MONITORING AGENCY NAME(S) AND ADDRESS(ES) 10. SPONSORING/MONITORING AGENCY REPORT NUMBER National Aeronautics and Space Administration SP-2014-617 Washington, DC 20546-0001

11. SUPPLEMENTARY NOTES

12a. DISTRIBUTION/AVAILABILITY STATEMENT 12b. DISTRIBUTION CODE Unclassified/Unlimited Available from the NASA Center for AeroSpace Information (CASI) 7115 Standard Hanover, MD 21076-1320 Category: 18

13. ABSTRACT (Maximum 200 words) From 2006 to 2013, the Commercial Orbital Transportation Services (COTS) program administered by the Commercial Crew & Cargo Program Office (C3PO) at the Johnson Space Center endeavored to stimulate U.S. commercial space transportation capabilities by pursuing a new way of doing business with industry. C3PO collaborated with a team of attorneys, procurement specialists, and even a venture capitalist to formulate and implement a new form of funded Space Act Agreement (SAA) based on the Agency’s “Other Transaction” Authority. In August 2006, NASA selected SpaceX and Rocketplane Kistler as its first COTS partners. However, NASA terminated the agreement with Rocketplane Kistler due to the company’s funding issues, and in February 2008 the Agency selected Orbital Sciences Corporation as its new industry partner. NASA worked with SpaceX and Orbital to meet the financial, programmatic, and technical milestones of their funded SAAs—milestones that would culminate in the development of new, commercially-owned transportation services to the International Space Station. The COTS program helped to realize the vision of cost-effective, U.S. space transportation capabilities and a successful partnership with industry.

14. SUBJECT TERMS 15. NUMBER OF 16. PRICE CODE PAGES Antares rocket vehicle, commercial spacecraft, government-industry relations, space commercialization, private sector, space station resupply, COTS, CRS, Dragon capsule 146

17. SECURITY CLASSIFICATION 18. SECURITY CLASSIFICATION 19. SECURITY CLASSIFICATION 20. LIMITATION OF ABSTRACT OF REPORT OF THIS PAGE OF ABSTRACT Unclassified Unclassified Unclassified Unlimited Standard Form 298 (Rev Feb 89) (MS Word Mar 97) NSN 7540-01-280-5500 Prescribed by ANSI Std. 239-18 298-102

National Aeronautics and Space Administration Lyndon B. Johnson Space Center 2101 NASA Parkway Houston, Texas 77058 www.nasa.gov