NASA Chooses Orbital Sciences To Develop Space Transit Service

Orbital, With Solid Cashflow, To Finance Major Portion of Spacecraft Development Cost

Commercial Craft Would Help Fill Void Left By Space Shuttle Retirement In 2010

NASA selected Orbital Sciences Corp. [ORB] of Dulles, Va., as the winner of a competition to receive up to $170 million in federal seed money, to spur Orbital and its team of subcontractors to develop a private Cygnus space cargo vehicle to help supply the International Space Station (ISS).

That agreement includes demonstrating the spacecraft and Taurus II rocket in October-December 2010, but doesn’t include later logistics missions to carry supplies to the ISS, missions for which NASA would pay Orbital additional funds. NASA might buy transport services to haul up to 16 tons a year of cargo into orbit.

This pact (which is not a formal contract) also doesn’t include any eventual astronaut crew transport vehicle that Orbital might develop. However, NASA and company officials discussed how crew transport capabilities might be added later.

NASA will pay Orbital in installments, as the company meets established milestones.

Orbital stock, traded on the New York Stock Exchange, jumped 2.4 percent on the news, rising 57 cents to $24.35.

While NASA officials declined to specify just which factors led them to choose Orbital over a dozen other competitors in the fight, clearly one point aiding the firm was that it has deep pockets. Orbital will be able to finance the spacecraft development program out of its own funds. "We don’t have to raise any money," Barron Beneski, Orbital vice president for public relations, said in a telephone interview.

NASA likes that. "This company had a very strong business plan" that engendered "high confidence they will be able to execute the business plan as proposed," said Alan Lindenmoyer, manager of the Commercial Crew and Cargo Program Office at Johnson Space Center in Houston. He spoke at a media briefing where NASA announced the Orbital selection.

Orbital succeeds another company, Rocketplane Kistler, that NASA earlier had chosen to develop a private commercial spacecraft, only to have Rocketplane find it was unable to raise sufficient private capital for the venture. NASA then dropped Rocketplane last October and held a competition for a successor firm to receive seed money, attracting 13 proposals involving many rival companies, including Orbital. Some companies participated in more than one proposal.

Developing private space transportation services will become critical once the NASA space shuttle fleet hits its mandated retirement point in October 2010. The United States then won’t have any transportation system to take crew and cargo to low Earth orbit, and to the space station, until the next-generation spaceship system, Orion-Ares, flies its first manned mission in 2015, a huge gap deplored by NASA leaders, lawmakers and analysts.

Under the agreement with NASA, Orbital would develop a spacecraft to haul several metric tons of cargo to the space station, where a robotic arm would grab the Orbital craft and move it to a berthing mechanism, rather than the craft having the ability to use a space station docking facility.

The company will launch from Wallops Island, Va., using a Taurus II rocket developed by the firm. That medium-lift rocket also could provide Orbital with other new revenue streams, such as for launching satellites.

Orbital will develop and demonstrate commercial orbital transportation services that could open new markets and pave the way for contracts to launch and deliver crew and cargo to the ISS.

"This opens up a new market area" for Orbital, he said.

NASA might buy up to eight missions a year from Orbital.

The space agency and Orbital signed a funded Space Act Agreement under the Commercial Orbital Transportation Services Project, known as COTS.

Orbital is eligible to receive up to $170 million of NASA money, because that is almost all that was left over from the Rocketplane affair.

Rocketplane received about $32 million from NASA before it was dropped from the COTS program. The $170 million that Orbital will receive is money that otherwise would have gone to Rocketplane.

Adding in $150 million that Orbital will contribute, including its investment in Taurus II, and the total effort leading toward the 2010 demonstration flight amounts to $320 million. "We will fund development of the Taurus II rocket," Beneski said.

The Taurus II will be liquid fueled, unlike the existing solid-fuel Taurus rocket. Adding to confidence in the Orbital proposal, the company already is nine months into developing the rocket, Beneski noted.

NASA briefers said a factor in selecting Orbital was that it had not only a technically feasible proposal, meaning the spacecraft looks like a workable plan, but Orbital also had a workable business plan, meaning it is likely to be able to come up with sufficient private capital.

Developing the Taurus II rocket "absolutely" provides new business opportunities for Orbital, Beneski said. The rocket is being built "with the intention to offer it to NASA, [the Department of Defense] and other governmental customers [needing to send] classified satellites to low Earth orbit," or LEO. Private-sector satellite operators requiring launch services also would be potential Orbital customers.

At some later point, Orbital might develop a more powerful rocket that could place payloads in a much higher geostationary orbit, or GEO.

In Phase 1 of the agreement with Orbital, it will demonstrate one or more of four capabilities: external, unpressurized cargo delivery and disposal; internal, pressurized cargo delivery and disposal; internal, pressurized cargo delivery and return; and an option for crew transportation.

NASA plans to purchase cargo resupply services competitively in Phase 2.

The selection of Orbital Sciences brings to seven the number of partners in which NASA is investing through COTS. NASA selected Space Exploration Technologies Corp., or SpaceX, of El Segundo, Calif., as a partner in August 2006.

NASA is partnering with the other five companies through unfunded agreements.

Thus far, SpaceX is making "good progress" in developing its rival space system, according to Doug Cooke, deputy associate NASA administrator for exploration systems.

"NASA plans to get out of low Earth orbit and focus on going back to the moon to prepare explorers for a future voyage to Mars," according to Rick Gilbrech, associate NASA administrator for the Exploration Systems Mission Directorate in Washington.

"Being able to buy safe, reliable and economical service to low Earth orbit will help us achieve our national goals."

"Our investment in the space transportation industry holds just as much promise for the future as government’s investment in the railroads and airlines produced in the past," Lindemnoyer said. "Like any wise investor would, we chose a transportation provider whose innovative concept is based on solid engineering and a sound business plan."

The Space Act Agreement establishes milestones and objective criteria to assess the company’s progress throughout Phase 1 of the COTS Project. Partners with funded agreements receive payment for achieving agreed-upon milestones.

All 12 of the losing companies in the Phase 1 COTS competition were contacted, with NASA encouraging them to participate again in future competitions.

The Cygnus (it also is the name of a Northern Hemisphere constellation of stars) spacecraft will be able to carry both pressurized and un-pressurized cargo.

Companies that will work with Orbital include Science Applications International Corp. [SAI], Draper Laboratories, and Odyssey Space Research, according to Lindenmoyer. And Orbital itself possesses expertise in launching.

To start, Orbital specifically proposed hauling cargo to the space station. The company did not, at this time, propose as well hauling cargo back, though they intend to develop that capability, according to NASA briefers.