Clark Lindsey has an interesting post on the prospects, now that people more responsive than NASA are going to offer research opportunities. I've always been a skeptic on it, and thought it vastly overhyped, particularly with regard to how it was used to sell the space station, but at least now, it will get a fair shot. And I agree with how he opens the piece:

One of the unfortunate tendencies of NASA is for the agency to implement a good idea in a bad way and thereby discredit that idea. Prime examples include RLVs and space tethers.

Yes, when people ask what harm it is to have NASA doing its own thing, and to just ignore it while we do ours, this is the answer. Few people really understand how much damage NASA has done over the decades in this manner. X-33 by itself probably set back the cause of low-cost spaceflight by over a decade, and we're only just starting to recover from that debacle, with the Air Force finally starting to take space transports seriously again, even if NASA continues to refuse to do so.

The Air Force link is interesting. It says in the article that it's an SBIR, with phase I to "design and analyze" a vehicle, and phase II to "fabricate the vehicle." The usual funding pattern for SBIR's is around 50-100K for phase 1, something under 1 million for phase 2, and phase three can be large and usually involves funding from outside the SBIR funding stream.

Either they are going to design and build a suborbital rocket on the lowest budget ever--by one or two orders of magnitude--or there is something not quite right about the funding. Or the matching isn't an even match between the private sector and the Air Force. My guess would be that phase 1 is a feasibility study, phase 2 is a design and analysis, and phase 3 is fabrication with a deep-pocket partner.

WEll said.

Robert

Jeff, that's a vehicle that XCOR has been planning to develop anyway, with internal funds. They're just using Air Force funds to subsidize it. It's of a piece with their stated corporate strategy of finding government customers to fund the development of things that they need for themselves.

Does anyone think of Armadillo getting the same contract as XCOR as a little odd? Their monthly report is delayed by a week now, too.

Does anyone think of Armadillo getting the same contract as XCOR as a little odd?

No. SBIRs are SBIRs. They have a limit on the amount that Phase 1s can be (I think it's a hundred K this year), and they both bid on the same solicitation our of Wright-Patterson. It would have been more surprising if they'd been dramatically different.

Rand: "that's a vehicle that XCOR has been planning to develop anyway, with internal funds. They're just using Air Force funds to subsidize it."

This kind of funding can be a trap, and I hope XCOR is wary of becoming dependent on it. At first it's just a side deal to augment an existing program; then the government is so impressed, they begin to offer serious money. In order to accept the money, the firm is then forced to spend an increasing amount of time filling out paperwork and adapting its way of doing things to the special needs of a government buyer.

Other projects, and indeed other clients, may fall by the wayside as the project shapes up, because the money is just too big to resist for a small company, and the original vision becomes increasingly distorted in order to fulfill the demands of the customer. Then, more likely than not, the project is cancelled, the firm is left with a huge amount of work toward a product now unrealistic to continue pursuing privately, a bloated workforce, and fewer revenue streams than they when they went into it.

Massive layoffs, asset liquidations, and a whole lot of luck could allow them to get back where they started a few years later, although bankruptcy is more likely. And if not cancelled? Perhaps even worse--ending up just another Mini-Lockheed on the Pentagon/NASA dole, largely incapable of doing anything else, and eventually be Borged by LockBoeGrumm.

XCOR is so agile, so creative, and so promising that I look on these contracts with trepidation. Can they skate the razor's edge and rev up on government money without being sucked in? We should regard the military's interest with the same mixed feelings one might regard hearing a pimp compliment one's wife. My best wish for them would be to attract a billionaire, but unfortunately that kind of freedom-creating investment seems to dry up the more government contracts are involved.

It's one thing to build a vehicle and then sell or license it to the government, but to have the creative process itself funded by them, unless carefully arranged like COTS, usually means they're going to screw up your project and then screw you over.