NASA opens up to commercial space ventures

By Debra Werner

updated 6:55 p.m. ET Aug. 20, 2009

Despite bleak budget forecasts and the uncertainty surrounding NASA's human exploration program, opportunities for commercial space firms are better than they have been in decades, according to government and industry officials.

Not only do NASA Administrator Charles Bolden and Deputy Administrator Lori Garver seem to be very supportive of commercial space ventures, but the challenging budgetary environment means space agency officials are searching for innovative ways to meet their goals, said Jim Muncy, president of Alexandria, Va.-based consultancy PoliSpace and co-founder of the Space Frontier Foundation.

The foundation spotlighted the potential for partnerships between NASA and commercial spaceflight projects during the NewSpace 2009 conference in Mountain View, Calif., last month.

During her July 8 confirmation hearing before the Senate Commerce, Science and Transportation Committee, Garver said her recent experience working as a consultant in the commercial sector of the aerospace industry "taught me that the incredible talent and dedication of the work force not only resides at NASA, but also in private industry."

Promising signs
Government and industry officials point to other promising developments. When White House science adviser John Holdren called in May for a thorough review of the agency's human spaceflight plans and programs, he cited "stimulating commercial spaceflight capability" as one of the review board's primary goals.

Earlier this month, the committee reviewing NASA's spaceflight plans suggested the agency set aside $2.5 billion through 2014 to support efforts by commercial firms to develop new space vehicles for crew transportation to the International Space Station.

With the United States facing record deficits, NASA's budget is unlikely to grow during the next few years, a circumstance that will prevent NASA from undertaking ambitious programs alone, U.S. space agency officials said.

Orbital Sciences An artist's rendering of Orbital Science's Cygnus space nearing the International Space Station.

"In these fiscally constrained and challenging times. I think you will see a lot more partnerships with industry and international agencies," John Olson, NASA deputy for commercial space support and director of the exploration systems integration office, said during the conference.

Olson points to the Commercial Orbital Transportation Services program and the related Commercial Resupply Services contracts as two recent examples of the space agency's commitment to giving entrepreneurs a significant role in NASA programs.

Beyond NASA's COTS
After committing close to $500 million to help Orbital Sciences Corp. of Dulles, Va., and Space Exploration Technologies Corp. of Hawthorne, Calif., develop rockets and spacecraft designed to ferry supplies to the International Space Station, NASA in December agreed to pay the two companies a combined $3.5 billion to haul 20 tons of cargo to the station through 2016.

NASA officials also are using Space Act agreements and Small Business Innovative Research grants to encourage more large and small companies to participate in space programs, Olson said.

Those companies should be aware, however, of some of the potential obstacles they face in their quest for NASA contracts, a panel of space industry veterans said July 19.

"NASA is a big organization with a lot of needs that have to be met. So there are a lot of opportunities," said Bruce Pittman, flight projects director for the NASA Ames Research Center's Space Portal, an office here charged with helping private industry work with NASA. "But government organizations have their own policies and procedures."

Wading through red tape
Any entrepreneur who wants to win NASA contracts should become familiar with the federal acquisition regulations, the rules government agencies follow when buying goods and services, Pittman added.

In addition, Pittman warned that government agencies do not move as rapidly as private firms. "Entrepreneurs are used to doing things quickly," he said. "Government isn't that way. Even if everyone in an organization wants to proceed, it takes a long time to see things happen."

Another potential hurdle for entrepreneurs is the government's reliance on contracts that allow it to modify requirements midstream, panel members said. Often, government officials are wary of contracts that set a fixed price for goods or services, according to Muncy. As a result, NASA often conducts research-and-development programs under contracts that pay for the cost of developing a piece of equipment then add a negotiated fee. "That dramatically raises costs and stops investment of private resources to meet government goals," Muncy added.

All these factors should be taken into account when companies decide whether to compete for government contracts, said David Livingston, a business consultant and financial adviser.

"Conduct a cost-benefit analysis to see if you want to work with the government," he said. "When you get money from someone, there are strings attached. Don't forget to look at the risks and the strings."

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