NASA selects two companies to develop Private Spaceship

Anticipating private spaceflights taking off sometime in future, NASA on Friday awarded contracts valued at $485 million to two small companies, both recovering from different failures to develop a new commercial spaceship.

NASA selected Space Exploration Technologies Corp. (SpaceX) of El Segundo, California, and Rocketplane-Kistler (formerly part of Kistler Aviation based on Seattle's Eastside) of Oklahoma City, to support the space agency's Commercial Orbital Transportation Services (COTS) demonstration initiative, which represents NASA's program to coordinate the commercial delivery of crew and cargo to the International Space Station (ISS).

The two companies would get a total of $485 million in "seed money" from NASA over the next five years to develop and test-launch new spacecraft with the idea that they would one day deliver cargo to the international space station (ISS). That means, if successful, the drive will give NASA the capability to re-supply the ISS after the 2010 retirement of the Space Shuttle.

The agreements with SpaceX and Rocketplane-Kistler could increase to $1 billion in development assistance if NASA and Congress decide the companies can safely take astronauts to and from the orbital outpost at a relatively low cost.

Among the two chosen companies, one Rocketplane-Kistler has formed an association with big-name companies, including Northrop Grumman and Lockheed Martin, with long aerospace histories. However, it emerged from bankruptcy last year.

And the other company, the SpaceX is funded by the Internet magnet behind PayPal, Elon Musk, who is a Chief Executive of SpaceX, but had a flaming breakdown in its initial rocket launch earlier this year. SpaceX has already sold a rocket launch to Las Vegas, Nevada based space technology start-up company, Bigelow Aerospace's planned private space station.

"When commercial enterprise turns the journey into low-Earth orbit into a profit-making business, NASA will be free to focus on goals more appropriate for government, such as exploration," said Scott Horowitz, the agency's associate administrator for exploration.

The space agency granted its consent to invest up to $278 million in SpaceX and $207 million in Rocketplane-Kistler if both the companies can successfully launch and dock their test spacecraft with the station by 2009.

If either company withdraws from the work, funding would stop, said Alan Lindenmoyer, NASA's commercial crew and cargo project manager.