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Iac-09.E6.3.4 Commercialization Is Required for Sustainable IAC-09.E6.3.4 COMMERCIALIZATION IS REQUIRED FOR SUSTAINABLE SPACE EXPLORATION AND DEVELOPMENT Mr. Gary Martin NASA ARC, Moffett Field, CA, United States, [email protected] Dr. John Olson NASA HQ, Washington, DC, United States, [email protected] ABSTRACT The U.S. Space Exploration policy outlines an exciting new direction in space for human and robotic exploration and development beyond low Earth orbit. Pressed by this new visionary guidance, human civilization will be able to methodically build capabilities to move off Earth and into the solar system in a step-by-step manner, gradually increasing the capability for humans to stay longer in space and move further away from Earth. The new plans call for an implementation that would create an affordable and sustainable program in order to span over generations of explorers, each new generation pushing back the boundaries and building on the foundations laid by the earlier. To create a sustainable program it is important to enable and encourage the development of a self- supporting commercial space industry leveraging both traditional and non-traditional segments of the industrial base. Governments will not be able to open the space frontier on their own because their goals change over relatively short timescales and because the large costs associated with human spaceflight cannot be sustained. A strong space development industrial sector is needed that can one day support the needs of commercial space enterprises as well as provide capabilities that the National Aeronautics and Space Administration (NASA) and other national space agencies can buy to achieve their exploration goals. This new industrial space sector will someday provide fundamental capabilities like communications, power, logistics, and even cargo and human space transportation, just as commercial companies are able to provide these services on Earth today. To help develop and bolster this new space industrial sector, NASA and other national space agencies can enable and facilitate it in many ways, including reducing risk by developing important technologies necessary for commercialization of space, and as a paying customer, partner, or anchor tenant. This transition from all or mostly government developed and operated facilities and services to commercial supplied facilities and services should be considered from the very earliest stages of planning. This paper will first discuss the importance of space commercialization to fulfilling national goals and the associated policy and strategic objectives that will enable space exploration and development. Then the paper will offer insights into how government can provide leadership to promote the nascent commercial space industry. In addition, the paper describes programs and policies already in place at NASA and offers five important principles government can use to strengthen space industry. INTRODUCTION equipment sent into or through space to provide goods or services of commercial value, either by Perhaps the most important step in discussing a corporation or government in a climate why commercialization is a necessary but not conducive to expanded private sector investment sufficient requirement for the affordable and and involvement in space activities. Indeed, sustainable development and exploration of commercial space within this context comprises space is to first define what is meant by several different types of commercial activity to commercialization. Indeed, depending upon the include: government or private purchase of perspective, this term and its viable applicability products, goods, or services, commercial end-to- to the space enterprise has many differences in end responsibility or total systems program meaning, interpretation, implementation, and responsibility, partnerships (to include Public- acceptability. Thus, for the purposes of this Private Partnerships {PPP}), cooperative or joint paper, commercialization is defined as the use of research and development, commercially 1 leveraged government investment (National achievement of NASA established goals. Advisory Committee on Aeronautics {NACA} No payment is made until goal is reached. model), cooperative development (e.g. Typically, these investments are on the order Commercial Orbital Transportation Services of $25M per prize. With these investments, {COTS} project), contractual purchase (e.g. NASA owns “What and Interoperability” Commercial Resupply Services), and planning and industry owns the “How” and with some and development (e.g. Commercial Crew level of investment and some level of risk to Development project) to name just a few. both. Together, these commercial approaches can and should leverage traditional, non-traditional, • Commercial Orbital Transportation NewSpace and commercial space suppliers and System (COTS) Model: This investment in support industry entities through committed a systems development is shared both by the applications of contracts, Space Act Agreements industry member and NASA. The funds are (SAAs), Broad Area Announcements (BAAs), to demonstrate a capability and reliability on Small Business Innovative Research (SBIR) an agreed schedule of milestones as required grants, plus prizes, challenges, and competitions by NASA. The investment level is modest, (e.g. Centennial Challenges, X Prize) as just on the order of $50M per COTS investment. some of the viable venues for engagement. The Typically, there is more than one firm common thread woven throughout each of these involved with the intent that many suppliers elements is a focus on return on investment, are developed. The COTS model requires entrepreneurial innovation, market expansion, that fixed costs are shared with other and a favorable climate for risk assumption customers. Again, NASA owns “What and based upon reward potential. From a Interoperability,” not “How.” This model government perspective, NASA is responsible requires that substantial investments be for executing its missions as assigned while made by both NASA and firms and that the serving as both a steward of the taxpayer’s risks be shared equally. investment and driver for national and international benefit. As the nation continues on • A New Commercial Use Model: NASA a forward trajectory of sustainable exploration procures services of new entrepreneurial and development of the national capabilities, services using Space Act Agreements and infrastructure, and industrial base to ensure then uses Indefinite Delivery/Indefinite success across the spectrum, commercialization Quantity (IDIQ) contracts to commercialize – in all of its facets – is an essential element of the Government’s operations. Typically, the our overall strategy and plan. investment will be on the order of $150M per procurement. The intent is to develop The following commercial models, some of many service suppliers. In this model, which have been lightly addressed above, may NASA owns the “What” and industry owns form the baseline enabling suite from which to “How” and both share equally in the risk. approach future commercial space opportunities. Directly excerpted from an October 2008 study • A New Procurement Model: Here the Jon Smith of Wyle Laboratories, they include: Design, Development, Test, and Engineering (DDT&E) is paid by NASA for • The Independent Research and fixed cost contracts with entrepreneurial Development (IRAD) model: Where suppliers for services and data, not industry makes an investment to provide a hardware. NASA owns the data, not how service to NASA with the expectation that it the data was developed. Typically, this will recoup some or all of its investment. investment level will be approximately This is only allowed when NASA $200M per procurement. NASA pays the anticipates an acquisition to emerge from the full cost, including the DDT&E and service. Typically, the investments are operations products, but it is left to the small, on the order of $10M, requiring the industry member to determine how the least investment by both NASA and industry products, services, and operations are to be and with a minimum risk to both. developed. As with the other models, the NASA and supplier share risk. • The Centennial Challenge Prize Model: Prizes are offered by NASA for industry 2 Government can use these different models, in U.S. space transportation capabilities”, and dependent on the specific applications, to “the United States Government must capitalize provide strong foundation to jump start a new on the entrepreneurial spirit of the U.S. private industry in and around space development and sector”, and “dramatic improvements in the exploration. reliability, responsiveness, and cost of space transportation would have a profound impact on WHY COMMERCIALIZATION IS the ability to protect the Nation, explore the NEEDED solar system, improve lives, and use space for commercial purposes.” Finally, at his Senate Commercialization is required to open the space nomination hearing (July 2009), NASA frontier. Government programs are driven by Administrator Charles F. Bolden, Jr. scientific objectives not by markets and, by far, encapsulated his vision for commercial activities most humans going to orbit are government by stating: “We can inspire and open the door employees to do government work. Only when new markets are developed can the costs of for commercial entrepreneurial entities to space development begin to fall and space begins become involved, to become partners with to open to private businesses and private citizens. NASA.” New markets will
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