Francisco A. Laguna & Wojciech Kornacki
The National Aeronautics and Space Administration (NASA) has opened the gates to commercial space flight, and, as a result, new business opportunities for the private sector are becoming available in the space industry. Before now, in the United States, all space travel was state-controlled, state-owned and taxpayer paid-for. Now, NASA is partnering with private businesses and high-technology companies to take space exploration and travel beyond the limits of any other government space agency. The first $6.8 billion in space travel contracts with Boeing and SpaceX are just a preview of what is yet to come.
The Evolution of NASA
In 1958, President Eisenhower created NASA to counter the Soviet threat of space domination. With the collapse of the USSR in 1991, NASA had to redefine itself and its mission. By 2000, the United States and the Russian Federation established the International Space Station (ISS), where the United States paid Russia $70 million per astronaut for a round-trip to the ISS. In 2011, NASA retired its last space shuttle, and Russia became the only means of flying American astronauts to the ISS.
At that point, NASA began to study seriously the feasibility of commercial space flight. The last several decades have seen a series of technology and communication breakthroughs and innovations. These scientific developments have enabled private entrepreneurs and their companies to collaborate with NASA on space exploration and commercial human space travel.
Previously, NASA primarily considered private businesses as contractors or vendors delivering goods and hardware to the Administration. NASA’s current business model has changed dramatically. Now, it wants to partner with private businesses and commercial enterprises. Instead of purchasing goods, NASA wants to purchase services, i.e. flying its astronauts and cargo to the ISS or elsewhere.
While NASA has not done away with its traditional procurement, it has redefined its business approach. The expectation is that NASA will be able to pick and choose among several commercial space travel companies to deliver the same services, and that the costs will be lower than $70 million per round trip. The anticipated benefits of this model are broader opportunities for domestic innovation, lower costs for taxpayers, competition, and choices other than the Russian space shuttle monopoly. The second tier benefits include massive inflows of private resources and capital into the space travel industry, national job creation, and new industries and services.
TransLegal has worked with foreign and domestic government contractors on a variety of matters. We are available to assist interested parties with NASA’s new partnership approach.
In September 2014, NASA awarded $6.8 billion in contracts to Boeing and SpaceX to provide “space taxis” for American astronauts traveling to the ISS and back. The first such space flight is expected to occur in 2017. With this historic first step taken to support commercial human space flight, the commercial space travel industry was born.
There will be many more space-related industries to come. SpaceX is a new company that has entered the space industry that can compete with Boeing. SpaceX has also developed its world’s first reusable rockets.
The Commercial Spaceflight Federation reports that the development of commercial spaceports infrastructure may be the next business opportunity. Many new services will have to be developed to support commercial spaceports. Several states are already working to establish commercial spaceports or have already established them. For example, Virginia Commercial Space Flight Authority and Mid Atlantic Regional Spaceport (MARS) already operate in Virginia/Maryland and its next launch is scheduled for October 2014.
At least one independent consulting company estimates that approximately 50,000 new jobs are expected to be created in the next 5 years. While SpaceX is honored to be selected to work with NASA, its CEO sees this as one of the steps along the way to flying space missions to Mars in the future.
If you are interested in what NASA has to offer, how your business can contribute to space travel and exploration and spaceport development, and how to capture commonalities with NASA, contact TransLegal. NASA reports that opportunities exist whether you are a small or big business, as experienced as Boeing, or as brand new and dedicated as SpaceX.
The commercial space travel industry is rapidly growing and expanding. While experts believe that going to Mars is still a long time away, it may be sooner than we think.