Clark Lindsey has some thoughts on John Kavanagh's thoughts about NASA's potential conflict of interest in COTS/Constellation (at least as currently formulated). I might have some thoughts, too, but not today. Perhaps this weekend or next week, after I get home to Florida (where it now looks unlikely that we'll get any severe weather soon).

I get to fill my pedant quota for today. I never understood the need to call something this obvious a "potential conflict of interest". The only thing "potential" about this conflict of interest is the uncertainty over whether any of these programs will survive the departure of the Bush administration. Having said that, having a conflict of interest doesn't mean that unsavory things will happen, but rather that conflicts of interest are common spurs for ethical and criminal lapses.

I dunno if I would see the "conflict of interest" in quite the same way. It doesn't seem to me to be very much like the conflict of interest were Microsoft to take over the management of the Mozilla foundation and its development of Firefox.

NASA is not a commercial venture, so their motivations are noticeably different. A commercial company wants to protect and increase its market share at almost any cost (hence e.g. Microsoft selling Xboxes at a loss, and giving away IE for free). After all, market share is their lifeblood.

NASA is not the same. Their salaries depend on Congressional appropriations, not market success. If in 2015 Congress tells them welp, looks like Burt Rutan or Elon Musk can resupply ISS way cheaper than your Block 1 CEV can, soooo let's abandon that program and refocus our money on Block 2, or robot explorers on Venus, or moon bases, whatever -- that's no real skin off NASA's teeth. No high-level person's job is threatened per se. (Indeed, they might breathe a sigh of relief to be doing something that is so obviously dangerous, spectacular, and money-losing that no private venture would even think of trying it.)

Where the problem comes, I suspect, is in Congress. Once a Federal aerospace or defence technology program is up and running, it generates lots of Congressional constituents whose salaries depend on it. They are reliable ways in which Congressmen bring home the bacon. But that makes it very hard to cancel these programs. (Do I even need to say "B-1"?)

What seems more likely, then, is that once Block 1 CEV gets going, it will be Congress that is reluctant to shut it off, even if cheaper commercial competitors appear to exist, because of the folks back home who will lose their jobs.

I don't know if there is any good solution to this, except ultimately to get the Federal government out of the space business. The only reason private firms can make the tough decision to abandon a losing venture, even though employees will lose their jobs and managers their status, and there will be much wailing and gnashing of teeth, is perhaps that line employees are rarely the majority stockholder. They can't angrily vote out management the way voters can vote out Congressman who act to kill a program supplying jobs back home.

Even when line employees are the majority stockholder (e.g. UAL), they are usually forced to make the tough decisions eventually by the market, because the market simply won't pay for a losing venture and there's no way to force it.

Alas, government can force the taxpayers to fund losing ventures almost indefinitely, so its motivation to cut the losses with a painful decision is less than even in the case of the (unfortunate) employee-owned business like UAL that has to reach bankruptcy court before delusions subside and rational decision-making sets in.