Privatization of Space: How NASA Can Expand Commercial Partners

Article By : Cabe Atwell

NASA is moving toward privatization; taking a look at NASA's commercial partnerships...

In its 30-year history, NASA’s shuttle program flew 135 missions and helped construct the International Space Station (ISS). From the first launch on April 12, 1981, until the final space shuttle mission on July 21, 2011, the program not only drove cutting-edge research but was also a huge touchstone in U.S. culture and an inspiration to generations. Now, almost ten years later, human space flight is a privatized industry.

We have just recently seen the first manned launch of a commercial spacecraft, a payoff that comes from billions of dollars of government investment since 2000. Commercial flights will come not only from tax payer investment during development but will require passengers to pay to board. So, is money being saved from the transition from public programming? How much and who is saving?

Since its inception, the U.S. has spent almost $650 billion on NASA. At its height in the 1960s, its budget consumed about 4% of all federal spending. In 2020, it makes up only 0.48% of the federal budget. This percentage translates to $22.6 billion. Roughly 30% of this goes to robotic missions and scientific research, 20% is divided between aeronautics, technology development programs, and overhead, and about 50% is spent on human spaceflight activities. This includes programs such as Artemis, which is dedicated to landing the first woman and next man on the moon by 2024, in collaboration with both commercial and international partners.

Since the shutdown of the shuttle program, NASA has been under pressure to return to flight in order to deliver crew members to the ISS, lunar surfaces, and beyond rather than relying so heavily on international partners to launch crewmembers. Instead, it has begun empowering private companies, including SpaceX and Northrop Grumman, to fly both payloads and personnel to the ISS.

The first launch of the SpaceX Falcon Heavy rocket. (Image source: Bill Jelen on Unsplash)

There is widespread agreement within Congress and the executive branch that commercial flight options are optimal in terms of cost, especially given NASA’s long history of schedule delays and cost overruns. Private commercial options allow for fixed-price contracts to maintain budget and payment upon completion to provide an incentive for keeping to schedule.

It is from NASA’s budget that these commercial partnerships receive government funding. Since 2011, NASA’s chunk of annual government spending has held steady at about 0.5% of the total. All funding that is allocated to commercial partnerships is under the Commercial Crew Program (CCP), the original goal of which was to achieve safe, reliable, and cost-effective access to and from low Earth orbit (LEO), including the ISS no later than 2017.

The CCP, then, does not eliminate delays, as the first successful launch and crew transportation to the ISS was completed in 2020. The test of how cost-effective the plan to include commercial partners in the development of human-rated vehicles will be how these successfully reduce delays and over-budget spending.

NASA Budget Linegraph (Image source: Wikipedia)

Commercial Crew differs from past approaches to crew transportation systems in a few ways. In past programs, a contractor such as Boeing or Lockheed Martin was hired to build the system to criteria and standards furnished by NASA, and with deep involvement by NASA personnel in the processing, testing, launching, and operation of the systems. Upon completion of each project, NASA owned the spacecraft and its operating infrastructure.

Under CCP, companies are free to design the transportation system as they see fit. It isn’t until the contracts phase of development and certification that NASA determines whether the system fits its pre-determined requirements. Similarly, manufacturing processes are not overseen by NASA personnel, and upon completion, ownership of both spacecraft and infrastructure remains with the developer.

Companies such as Elon Musk’s SpaceX and Jeff Bezos’ Blue Origin are among the pioneering commercial partners. NASA’s technical expertise and resources are made accessible to these companies, but they do not oversee development or manufacturing. That is to say that NASA still provides monetary resources prior to selecting a partner for a mission.

During their development efforts, companies could choose to design their systems to meet NASA’s pre-determined requirements. To support the certification of these systems, NASA awarded Certification Products Contract (CPC) and Commercial Crew Transportation Capability (CCtCap) contracts. By 2018, prior to any successful mission, commercial companies had received as much as $7.2 billion in government investment.

While this number is split between 67 different companies, SpaceX is a prime example of the necessity of government contracts in the development of these private companies. In its first decade of operation, SpaceX ran off a budget of $1 billion. Approximately half of this money came from NASA contracts under CCP.

As it stands, NASA’s budget hasn’t used any more or less tax payer investment since before it shuttered its own manned shuttle program. The key to cost reduction seems to be in the efficacy of execution, which is largely untested for the Commercial Crew Program. Still, both Congress and NASA administrator, Jeff Bridenstine, are convinced enough that this direction is the most efficient use of the budget that they have begun to move to end direct financial support for the ISS by 2025. Instead, they are recommending that either the ISS could be privatized and operated on behalf of the government, or the private sector could build, launch, and operate a commercialized LEO-based platform for profit.

An IDA study presented at a congressional hearing in 2018 indicated that no commercial operator would be able to maintain such a platform without government subsidy. This is supported by the way the CCP has progressed so far, showing that substantial government support is necessary to keep potential commercial partners from folding. It seems, for now, initiatives to privatize space have done little to reduce public investment in crewed missions, but they will require a ticket to ride.

— Cabe Atwell is an electrical engineer living in the Chicago area.

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