The case for a suborbital COTS programby Jeff Foust
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| For many suborbital companies, the difficulty—if not impossibility—of raising money has effectively become a showstopper. |
As noted last year, there is no single root cause that has affected every commercial suborbital venture, but if there was a single issue that is the most frequent cause of these setbacks, it would most likely be funding, or the lack thereof. A few companies, like Virgin Galactic and Blue Origin, have the support of a wealthy corporate or individual benefactor; others, like XCOR Aerospace, have made judicious use of contracts with other entities to develop the technology needed for their vehicles. It’s not surprising, then, that these companies are perhaps the farthest in the development of suborbital vehicles (although exactly what progress ultra-secretive Blue Origin has made isn’t clear.)
However, for many other companies, the difficulty—if not impossibility—of raising money has effectively become a showstopper. Securing financing, particularly from institutional investors like venture capitalists (as opposed to individual “angel” investors, like Paul Allen’s funding of SpaceShipOne) has long been a challenge for the entrepreneurial space field: the high capital requirements and the long and uncertain return on investment, particularly when compared to web, biotech, and other technology fields, have kept those investors on the sidelines. And the situation got even worse in the last year with the financial crisis that dried up much of the available capital.
Ironically, even as funding these ventures became even more difficult, the audience of potential customers has actually grown in the last year. While suborbital spaceflight has been intrinsically linked with space tourism thanks in large part to the Ansari X PRIZE, it is not the only market that such vehicles can serve. The same vehicles that can carry paying customers on brief journeys into space—as well as, in many cases, other vehicles not designed for tourism—can carry scientific experiments, cameras, and technology demonstrations that can take advantage of the environment of suborbital space. Such markets have been known to exist for some time: these and others are outlined inan FAA report issued over four years ago. However, these markets have been poorly understood, lacking even the basic market studies and analysis that had been devoted to tourism, and in general simply lost in the shadow of personal spaceflight.
That has started to change in the last year, thanks to an entity that had previously shown little interest in suborbital spaceflight: NASA. Former NASA administrator Mike Griffin, speaking a little over a year ago, spoke glowingly of the capabilities of the emerging suborbital spaceflight industry, and the potential for NASA to take advantage of the vehicles under development for science and even astronaut training. “I very much hope that NASA researchers and astronauts will be proactive in taking first advantage of such capabilities as they are developed by the nation’s entrepreneurs,” Griffin said in a speech last March 5 at the Goddard Memorial Symposium. (See “Hoping for a reality tomorrow”, The Space Review, Monday, March 10, 2008).
The agency has backed up those words with some initial efforts. Around the time of Griffin’s speech NASA issued a request for information (RFI) for potential scientific uses of such vehicles. Later last year NASA followed up with a request for proposals (RFP) that, unlike the earlier RFI, offered funding for researchers proposing “human-tended” suborbital science experiments. The RFP’s deadline was in early December, and awards should be coming in the near future, said Yvonne Cagle, program manager of the Human-Tended Suborbital Science Program at NASA Ames Research Center, during a talk at the Space Access ’09 conference in Phoenix earlier this month.
| “We’re finding out things every day” about scientific applications for suborbital vehicles, Cagle said at Space Access. “I don’t count sheep at night any more, I count ideas.” |
The scientific community has also reacted positively to the potential suborbital vehicles have for a wave range of science experiments. NASA Ames and the Personal Spaceflight Federation organized a half-day workshop on human-tended suborbital science last December in conjunction with the fall meeting of the American Geophysical Union in San Francisco. The meeting attracted a standing-room-only crowd of about 130 people, mostly scientists interested in how they could use commercial suborbital vehicles. A similar workshop is planned for May 3 in Los Angeles, this time in conjunction with the annual meeting of the Aerospace Medical Association.
Cagle, a former Air Force flight surgeon selected as a NASA astronaut in 1996, said there has been a wide range of interest in these vehicles in fields ranging from the Earth sciences to fundamental physics to astrobiology, thanks to the potential for high flight rates, low per-flight costs, and the ability to recover and reuse experiments. “We’re finding out things every day,” she said at Space Access. “I don’t count sheep at night any more, I count ideas.”
NASA’s interest in commercial suborbital vehicles, though, is predicated on the assumption that these vehicles will be entering service in the near future. Cagle said her office hopes to start flying the first set of payloads on commercial suborbital vehicles in 2011, “possibly even earlier than that if there are testbeds that become available.” That’s around the time when the first of these commercial vehicles, like SpaceShipTwo and XCOR’s Lynx, are currently projected to be entering commercial service, assuming no additional technical, financial, or other setbacks.
That new and growing scientific interest in commercial suborbital vehicles, coupled with the challenges vehicle developers face in securing funding, creates a new opportunity for NASA. Is there anything NASA can do—besides funding scientists to develop experiments for suborbital missions and buying rides on vehicles—to ensure that those vehicles will be available in the reasonably near future? There might be a way.
Shortly after becoming NASA administrator in 2005, Mike Griffin addressed a pending problem for the agency: how to get cargo and crews to and from the International Space Station (ISS) once the shuttle is retired in 2010, especially during that multi-year gap before Constellation was ready to enter service. He suggested that the commercial sector had the ability to help solve that problem, and that NASA could promote the development of such services. Rather than doing so through a conventional contracting system, though, he proposed that NASA help fund the development of those systems while ensuring that the companies also had some “skin in the game”, as he put it in a June 2005 speech.
And thus was born the Commercial Orbital Transportation Services (COTS) program. Eschewing traditional procurement techniques in favor of more flexible Space Act agreements, both funded and unfunded, NASA has used COTS to foster the development of launch vehicles and spacecraft designed to meet a specific NASA need—servicing the ISS—while allowing the companies developing these systems to use them for other applications, from traditional satellite launches to the servicing of commercial orbital habitats like those planned by Bigelow Aerospace. NASA has followed on COTS with Commercial Resupply Services (CRS) contracts awarded late last year to Orbital Sciences and SpaceX, the two companies with funded COTS agreements.
Could a similar approach for suborbital vehicles? As with ISS resupply, NASA has a demonstrated need: a desire to fly scientific payloads that cannot, for technical or budgetary reasons, fly on existing sounding rockets or reduced gravity aircraft flights, let alone to the ISS. It’s certainly a much smaller need than the ISS resupply one, but one that exists nonetheless.
| If successful, a Suborbital COTS program would greatly benefit both NASA and industry. |
Like the original COTS, a “Suborbital COTS” program (which obviously will need a new name, since the “O” in COTS stands for “orbital”; that is left as an exercise for the master acronym generators within NASA) could use Space Act agreements to support the development of suborbital flight capabilities. The emphasis here would be on vehicles that could serve NASA’s suborbital science requirements, or a significant subset of them. This would require NASA to first continue the efforts of the Human-Tended Suborbital Science Program to scope out the specific scientific interest in such flights, and translate that into a set of technical requirements—mass, power, volume, etc.—that vehicle developers would have to fulfill. And as with the original COTS, suborbital vehicle developers with Suborbital COTS agreements would be free to use their vehicles for other missions as well, including space tourism.
If successful, a Suborbital COTS program would greatly benefit both NASA and industry. Scientists would potentially get earlier access to suborbital vehicles, as well as a greater choice of vehicles. Vehicle developers, meanwhile, would get access to much-needed capital as well as an implicit endorsement from NASA. While companies would still have to raise outside funding—Griffin’s “skin the game”—having those capital requirements reduced significantly by NASA money could make it much easier—or at least less difficult—to raise the remaining money elsewhere.
How much would a Suborbital COTS program cost? Presumably it would be less than the $500 million that NASA put towards the original COTS effort, given the lesser magnitude of the technical challenge and the fact that companies in this field tend to be looking for tens of millions of dollars, rather than hundreds of millions. Using Space Act agreements with funding tied to milestones would help ensure that NASA pays only for progress, and allow it to terminate deals with companies who aren’t making progress, much as it did with the original COTS program when it terminated an agreement with Rocketplane Kistler after the company missed its milestones.
In fact, if NASA wanted to start a Suborbital COTS program right now, there might be a way to fund it. NASA’s portion of the economic stimulus package passed earlier this year includes $400 million for exploration, with no specific Congressional direction on how to spend it. While the conventional wisdom is that the money would be used to accelerate Constellation (or at least ameliorate its delays), one alternative would be to spend $300 million of it pick up the Capability D (human space flight) option of SpaceX’s existing COTS agreement, which would address one critical NASA need, crew access to the ISS after the shuttle’s retirement. The remaining $100 million could conceivably be used to jump-start Suborbital COTS.
There are arguments against Suborbital COTS. Some companies arguably don’t need it, or perhaps don’t want it, fearing the intrusion of government requirements into commercial endeavors. Others worry that if they couldn’t secure a funded Suborbital COTS agreement they would be at a disadvantage to those who did, skewing the competitive landscape. Those concerns could be mitigated somewhat by unfunded Space Act agreements so that companies who don’t secure a funded agreement can still benefit from consultations with NASA on the needs of suborbital researchers. Also, actual procurement of suborbital flight services would be open to any company, regardless of whether they have a Suborbital COTS agreement or not, in much the same way that the ISS CRS procurement was open. (As it turns out, NASA awarded CRS contracts to the two companies with funded COTS agreements, although a third company, PlanetSpace, did submit a proposal and has since protested the award, claiming that their proposal scored better than Orbital’s on technical merits.)
Another concern is that the jury is still out on the effectiveness of COTS in general. Neither SpaceX nor Orbital have finished development of their vehicles under COTS: SpaceX is scheduled to fly its first Falcon 9/Dragon COTS mission late this year, while Orbital’s sole Taurus 2/Cygnus mission is planned for the end of 2010 or early 2011. COTS has also failed to stimulate interest in outside investors. SpaceX and Orbital have funded their efforts internally (although SpaceX did take a small investment last year and is currently selling $60 million in stock, perhaps to help fund its COTS effort), and the primary reason why Rocketplane Kistler lost its funded COTS agreement was its difficulty in raising several hundred million dollars in outside investment. At least in the case of Suborbital COTS the funding requirements are much less, perhaps by an order of magnitude.
| To create really meaningful reductions in space access costs will require vehicles that look—and operate—like descendents of suborbital vehicles being developed today. |
There is, though, another reason for creating a Suborbital COTS program, one that in the long run dwarfs the scientific return promised in the near term. NASA’s launch vehicle development efforts today are effectively associated entirely with Constellation and plans to return to the Moon. And while the effectiveness of Ares 1 and Ares 5 to achieve the goals of national space exploration policy is hotly debated, no one would claim that these vehicles are designed to reduce the cost of space access. The same is true for those vehicles put forward as alternatives to Ares, from EELV-derived launchers to the Jupiter family vehicles proposed by DIRECT. None of these vehicles are designed to make space access more affordable, and the use of these vehicles beyond human missions to the Moon and Mars is very limited.
However, it should still be a national priority to develop vehicles that can reduce the cost of space access, as a matter of national economic and national security if nothing else (see “The Vision for Space Exploration and the retirement of the Baby Boomers (part 3)”, The Space Review, June 16, 2008). To create really meaningful reductions in space access costs (more than what’s even promised by SpaceX) will require vehicles that look—and operate—like descendents of suborbital vehicles being developed today. With no next-generation launch vehicle program at NASA beyond Constellation—not necessarily a bad thing, given the agency’s track record on projects ranging from NASP to the X-33—the agency would be well served to do what it can to promote the development of vehicles that can serve as precursors for eventual orbital RLVs.
In short, to enable that giant leap in space access, NASA would do well to help industry to make that first small, suborbital step.
