NASA Johnson Space Center
Oral History Project
Edited Oral History Transcript
Scott J. Horowitz
Interviewed by Rebecca Wright
Houston, Texas – 1 March 2013
is March 1st, 2013. This oral history session is being conducted with
Dr. Scott Horowitz in Houston, Texas for the NASA Johnson Space Center
Oral History Project. Interviewer is Rebecca Wright, with Rebecca
Hackler. Thanks again for finding time in your busy schedule to talk
to us. Today’s subject is the agency’s Commercial Orbital
Transportation Services [COTS] program. We’d like to start when
you were in the role of NASA’s Associate Administrator for the
Exploration Systems Mission Directorate.
A few months before you arrived, NASA Administrator Mike [Michael
D.] Griffin had taken the lead role for the agency, and when he arrived
he had listed a number of priorities that were consistent with President
George W. Bush’s Vision for Space Exploration, which included
a statement “to encourage the pursuit of appropriate partnerships
with the emerging commercial space sector.” Tell us what your
understanding of this objective was and what was your involvement
The key word is “appropriate.” An appropriate relationship
with the commercial sector is to encourage commercial space. Commercial
is defined—when you’re talking about the government, a
good example everyone uses is airlines. Whenever you travel in the
government, you buy a commercial airline ticket. Not always, but most
of the time. That’s a commercial relationship. They’re
a commercial business, they do business for profit. They make money,
and they have a service that we can simply purchase commercially.
That’s what was meant, first of all, by the word commercial.
The goal was to try to develop the same type of a relationship for
space services. The first obvious place to start was in transporting
cargo into low-Earth orbit. That’s where COTS basically originated,
if you want to go back to the original intention.
lot was going on when you arrived, because this was just a small part
of the Vision for Space Exploration. The rest was a much bigger plan.
How did your staff and the team that you were putting together view
this objective, and how did it start to take a piece of your daily
operations of work?
The entire Vision for Space Exploration, in my opinion, was a long
overdue direction for the agency. Post-Apollo timeframe, the agency
pretty much went from project to project to project. Space Shuttle
was a project looking for something to do. Great capability, and it
eventually became the way we did [International] Space Station [ISS],
but there was no overarching goal. The Vision for Space Exploration—the
basic premise was NASA needed to get out of low-Earth orbit.
One of the reasons NASA wanted to work with the commercial folks to
provide COTS services was NASA would move one step ahead, beyond low-Earth
orbit, and then the commercial folks would have an opportunity to
fill in the low-Earth orbit services, the first step. Then NASA would
do the next step. The long term goal would be as NASA kept doing the
harder and further out things, then the commercial world would—if
it was commercially viable—be able to provide the services,
because all that technology had been developed, and other companies
could take it over. Basically NASA would do the hard stuff, and the
commercial programs would do the routine stuff.
Most of the effort of course was on doing the really hard stuff, which
is developing a replacement for the Space Shuttle, because it was
scheduled to retire in 2010. The number one objective of the Space
Shuttle’s replacement was to provide a way to get a crew to
and from low-Earth orbit and to provide a spacecraft which could travel
beyond low-Earth orbit—to the Moon, to Mars, asteroids, wherever
you wanted to go—and to do it on an order of magnitude safer
than the Space Shuttle.
The Space Shuttle’s track record, as you know—it depends
on whose number you want to use, but it was somewhat less than one
in 100. The Astronaut Office had issued a memo post-Columbia [STS-107
accident] that called for the next manned space vehicle to be able
to have a predicted loss of crew better than one in 1,000. Everyone
in the space business said wow, that’s really hard. If you were
a commercial paying passenger on an airliner and they said you had
a one-in-1,000 chance of making it from here to Los Angeles today,
you wouldn’t get on the airplane. It puts it in perspective.
But it was hard. Our group was focused on building that capability.
Plus then, in order to go beyond low-Earth orbit, you need to put
sufficient cargo in low-Earth orbit to go somewhere and support exploration-type
activities. Numbers were passed around in different architecture studies,
but anything less than the capability of a Saturn V [rocket], which
is 100-plus, 200 metric tons into low-Earth orbit, just doesn’t
provide you enough stuff to go anywhere.
The architecture which was studied and traded—hundreds of different
architecture combinations, thousands of different rocket designs were
traded. It was the summertime of 2005 when the final study was done,
just before I was asked to come to NASA Headquarters [Washington,
D.C.]. My staff’s main purpose was to execute the vision. In
particular, do everything required to build the architecture to support
Of course we had all the work we were doing to figure out the interface
with us and all the international partners. There was a huge amount
of work done on what the international partners would contribute to
exploration, because we felt, and it was actually stated, that it
would be an international pursuit. In fact my deputy at the time,
Doug [Douglas R.] Cooke, that pretty much ate up most of his days.
We had 13 nations participating.
My philosophy was instead of dictating what they do, why don’t
we bring them together and ask them what they’d like to do,
and then figure out does that fit in the overall architecture. We
were doing the basic transportation elements, some of which were going
to be U.S.-only for strategic reasons. There were certain elements
that if other people want to provide some of the same elements, that’s
fine, but there are certain things the U.S. would do.
COTS was this pretty minor piece at the beginning. It built up a little
more as we were figuring out a way to, for example, supply the Space
Station while we were building the new transportation system to move
the crew to low-Earth orbit and beyond. To build the larger vehicles
to go on, and design landers and habitats and ground transportation
elements and power systems and the whole array of all the capabilities
you would need in order to do exploration.
you see the COTS piece as being a viable and important piece of the
future? Or was it more of a contingency or the backup if some other
program didn’t come online?
For transporting goods to the Space Station, for example, that would
become the primary method of transporting goods, again to free some
of our resources up to go do the harder things. We actually looked
at the capability, and if you look at the requirements for Orion,
it was a backup capability to COTS. COTS wasn’t a backup capability
to Orion. One of the reasons it was set up that way was because Ares
and Orion were supposed to fly in the 2013 timeframe, with the ability
to transport crew with a probability of loss of crew better than one
in 1,000, which is not trivial.
But if you could move a crew to space in order to take the first step
to go on a mission to the Moon or Mars or wherever, you can obviously
take them to the Space Station. It’s not a big deal. The requirements
were that the government system would be designed primarily to go
do exploration, but as a backup would be able to go resupply the Space
Station, because the COTS was going to supply the Space Station.
COTS was very focused. Commercial companies had not done this before.
There was a high risk in them being able to develop the capability,
which was supposed to come online when the Shuttle retired in 2010.
As much risk as there was on the technical side, there was even more
risk on the financial side. To be quite honest, the business cases
were not that robust. There’s always the promise, and it’s
been this way since the beginning of thinking about doing commercial
For years and years and years, the promise of—chicken-egg thing—if
we build it, they will come. “We can reduce the price, we’ll
get tens of thousands of satellite launches, and it’ll be $1
a pound. We’ll just throw things to orbit, and it’ll be
just like the airlines. We’ll be launching rockets so fast,
we’ll need a traffic control tower to control the traffic. It’ll
be so dense, there’ll be all these customers.”
The problem of course in any system—it doesn’t matter
if you’re going to build a car, build a house, build a rocket—if
you build one a year, it’s really expensive. If you build 10,000
a year, the price comes down. Because, there’s a fixed cost
of just having a building with people in it, and if you have to amortize
that cost across one unit—if General Motors had to build one
car a year, it’d be a multibillion-dollar car. The fact that
they build millions of them means you can buy them for thousands of
dollars. Same in the rocket industry, the biggest thing driving the
cost is the rate.
To get the kinds of promises of efficiencies, the commercial space
business had to have commercial customers. Just like in the airlines,
NASA doesn’t buy all the seats on a commercial airliner. You
buy a very small percentage of them, but we get the advantage of there’s
a big market. When I announced the winners in ’06 [COTS Final
Selection Statement], I said as hard as the technical part is, I see
the business case as being even more difficult.
That’s how it all fit together. The plan was we do exploration,
we go build the government program, we use COTS to fill in the routine
resupply of Station. That whole program was set up to give people
a chance to prove that they could actually do this and create a commercial
space environment. If you go back to the Vision, that’s what
everybody wanted to do. Can we build a really vibrant commercial space
industry? Especially for orbital services. There’s already a
pretty good space industry for satellites and imagery and things like
that, but actual commercial space transportation was one of the goals.
you were getting on board and setting up your teams and working, at
the same time the COTS program was coming online, they were getting
ready to make their Announcement. As it moved through its timeline,
how much input did you have prior to the selection? Or was your involvement,
did it start with the actual Round 1 selection process?
I was the Round 1 selecting official. I was very involved. I read
every single proposal cover to cover, and worked with—we had
a small office here at Johnson Space Center as you know, run by Alan
[J.] Lindenmoyer and Valin [B.] Thorn. Those two were running the
office down here, providing the technical overview of the proposals.
We had quite a few proposals early on, and we had a down-select process.
I think we finally got to six finalists, six that were viable proposals.
Like in any proposal situation, lots of people propose, but some of
them don’t meet the basic criteria so you eliminate those proposals.
Then you get down to the ones that meet the criteria. I was very involved
in the review of those, and held reviews where all the proposals were
brought to me and graded and reviewed.
I actually put together a team that included people from the business
sector, because like I said, as hard as the technical part is—and
I’m pretty good at the technical part—the business part
I thought was going to be even more difficult because each proposal
was going to be scored based on its technical merit as well as its
financial merits, for its capability to meet the basic goal of producing
a commercially viable space transportation system.
comfortable were you in evaluating through this new procedure, because
these were going to be pulled in with Space Act Agreements and not
your normal government procedures that you had been doing forever.
The use of Space Act agreements was really unusual. We spent a lot
of time with contracting and with legal, and a huge amount of effort
went into what was the right procurement strategy for this. This was
a little different than anything we had done, because in a normal
FAR [Federal Acquisition Regulations] procurement, there’s a
whole list of things you have to accomplish, for good reason, and
these monies were to be provided as basically an incentive, a subsidy
directed pretty much by the Office of Management and Budget [OMB],
who quite honestly didn’t like the Space Shuttle. Paul Shawcross
at OMB, Office of Management and Budget, in particular. His goal was
to get rid of the thing, he hated it.
If you go back in history the Space Shuttle mostly looks the way it
does because of the Office of Management and Budget, because they
had this vision that we’d build this airplane thing that flew
to space, and you’d just put gas in it and go fly it, and it
would be really cheap. The same rocket scientists at OMB envisioned
COTS would be that you give them a couple hundred million bucks, and
we’ll be buying cargo for less than $1,000 a pound.
Now as wrong as that concept was, we still believed in the goal to
promote the commercially viable space industry, so we went through
the NASA directives, the FAR rules. As it turns out, you can use legally
a Space Act Agreement—which is really called an “other
transactional authority,” that’s what it’s called
in the actual language—for very very limited use. And this was
a real expansion of that use, because usually it’s used for
$1 million grants to a research university to go do some research.
There’s lots and lots of Space Act Agreements. It’s called
a Space Act Agreement because it’s part of the original charter
for NASA, the 1958 Space Act, so it’s called Space Act Agreement.
Other agencies have this other transactional authority. The review
of how you would do this—it was felt that the Space Act Agreement
was probably the most appropriate for this particular [program]. It’s
not an acquisition, because by law you can’t acquire anything
with a Space Act Agreement. So we couldn’t buy services, you
can’t buy hardware. You can basically subsidize research and
Really the $500 million under the Space Act Agreement was to subsidize
research and development to come up with a commercially viable system.
OMB had put in NASA’s budget $500 million to do that. The people
down here [at JSC] in Lindenmoyer’s group and others had done
a lot of research on things like prizes and other space things, and
had come to the conclusion that companies would spend twice as much
money as what you authorized. If you gave them a buck, they’d
spend a buck, so they’d spend $2 to win $1 because of the prestige
and the business case for future business.
When you looked at it, they were all promising they could do it for
say $500 million, develop a rocket and a capsule, or whatever the
concept was. If NASA gave them about half of that, they would kick
in commercially the other half. Then they would have a service. Fifty
percent of the development would have been subsidized by the government,
to which they could go start making a profit. Because there’s
this commercial group out there selling rockets for 1,000 bucks a
pound for payload, NASA could buy it like they buy tickets on an airline.
That was the whole thing, that’s one of the reasons the Space
Act was used.
It was pretty much what we felt was the legal limit of the use of
a Space Act. You really couldn’t take it any further. Once all
the companies had demonstrated their milestones in the Space Act Agreement—the
other advantage of which is since it’s not a FAR, and it’s
not a contract, it was a milestone-based payment system—if you
read a Space Act, it actually says government can cancel it at any
The thought was it also reduced the agency’s exposure and risk,
because if I said I’m going to give you $100 to do something
and you don’t do it, I was only obligated to pay you the last
payment that I paid you out of that. If you don’t meet future
milestones I don’t owe you any more money. I can cancel a Space
Act Agreement if you don’t perform. It’s almost like a
firm, fixed-price contract, but it wasn’t a contract. It protected
the agency as well as the companies.
The actual contract for services would come later, and that would
be a FAR acquisition. Put out a request for proposal, you get proposals,
analyze the proposals, you pick a winner, and now you’re in
a contract situation. But that was to be the beginning and the end
of the use of Space Acts for commercial space. That was it.
you surprised that you had 20 or so proposals?
I wasn’t surprised. Like I said, there were only about half
a dozen that were really viable. But everybody who was excited about
space—we had some proposals that somebody was going to build
a rocket engine in their garage, we had some proposals to, “Give
us $200 million and we’ll go do a study,” and we had everything
in between. Like I said, the first round was pretty much to get it
down to about a half a dozen viable, serious proposals that were in
line with what we wanted.
We give you some money, you put in some money. In this timeframe you
build a rocket and a spacecraft that can go deliver some cargo to
the Space Station. There’s a lot of people that have been running
around for years in conferences, yelling and screaming, “Get
out of our way, just give us a chance. We can do it for one tenth
the price, and much more reliability, and a whole lot faster and better
than NASA.” They’ve been screaming that for years. This
was like “show me.” I wasn’t surprised we had a
lot. Having half a dozen competitive ones, that were serious, was
actually a pretty pleasant surprise.
of the elimination process, if I can use that term, if it had been
a FAR process there would have been a Source Evaluation Board, but
this was done differently [with a Participant Evaluation Panel]. As
you mentioned, you had to bring some business folks in. Could you
share with us some of the details of how you got from 20-something
proposals down to these last six, and maybe what were some of the
features of those six that put them in that classification?
The first elimination was easy. Somebody sent us a picture of a bunch
of copper tubes soldered together in their garage and said they were
building a rocket engine that was 10 times more powerful than an SSME
[Space Shuttle Main Engine] for one fifth the price. It was pretty
easy to eliminate the ones that just were, “Thank you very much,
we’ll buy your matter-antimatter engine when you demonstrate
it.” Some of them were pretty easy.
Some just weren’t aligned with what we wanted to do. Serious
companies came and said, “Well, we’ll do this whole study.”
We said, “We don’t want a study, we want you to go fly
a piece of hardware.” The first elimination was actually pretty
simple. They just weren’t aligned at all, or completely non-viable.
Probably well intentioned, but not serious technically, understanding
what it takes to actually go build a rocket. That part was pretty
simple. The next elimination of course took a lot more time and effort
us about how you had the six and then you moved it to two [winners].
From what we understand, at some point in this process, NASA hired
a venture capitalist to help understand the business part of it.
We brought in different people to look at the proposals. In fact a
lot of the process we used would be just like in a regular proposal
situation, where you basically have your criteria and you have the
proposals, and you rank the proposals against your criteria. If you
broke it down, the two major criteria were is this technically viable,
and does this have a snowball’s chance of making money.
In general the government, when they contract, they don’t care
about the second part. I don’t care if the contractor makes
money, I want my widget. I want the contractor to stay in business
because he has to build my widget, but I want my widget. Here, we
wanted our widget, our rocket and our spacecraft, but it didn’t
do me any good to get the spacecraft if I didn’t have a company
that it looked like would be viable and make money at doing this so
I could be one of the purchasers.
Again, the endgame was to be a minor purchaser of the company’s
services, not the only purchaser of the company’s services.
We wanted a company that was commercially viable, not one that depended
on government customer alone. That’s why we had some people
who had business experience reviewing the proposals, because one of
the big things was right off the bat we knew that the money we were
giving them wasn’t enough to do the job. It was about half as
much to do the job.
When somebody submits a proposal, they say, “Oh, we can build
your Space Shuttle for $100 million.” Of course that’s
ridiculous, and so the government does a “should cost.”
With every proposal, people propose a cost. You don’t always
pick the lowest cost, because in general the contractors are all trying
to underbid each other to get the job, and once you sign up for it,
then they go well, it really costs this. The government usually has
insight into what they think it really will cost, should cost. While
we’re doing the “should cost,” the technical viability,
we’re also doing the, “is there even a potential that
this could make money in the future?” That’s why we had
the venture capitalist type people reviewing the proposals with us.
The FAA [Federal Aviation Administration] was part, because they had
a stake in this. They were going to be the regulatory. If you looked
at the people who all sat in the review committee, we had technical
people, business people, FAA people. It was about a half a dozen or
so people who had an interest, who were what I call the stakeholders,
and had an input into the selection of the COTS finalists.
were SpaceX and Rocketplane Kistler. Since you were the selector,
those two now were going to bring forth part of this vision. SpaceX
of course has its own history trail at this point, but RocketplaneKistler
didn’t have the success that they had hoped. Could you share
with us some of the proceedings and issues that caused you to terminate
RocketplaneKistler had been down this road before. They had received
a lot of money, and the one advantage they had is they obviously had
a lot of hardware. A lot of it was sitting in Michoud [Assembly Facility,
New Orleans, Louisiana]. They had built a lot of rocket parts. They
had an interesting technical proposal, in some ways pretty classic—rocket
engines, capsules—but they were going to have a reusable upper
stage and a reusable first stage. One of the problems you run into,
and to make money at this, is a lot of people are very keen on the
idea that the only way to make money is to reuse the hardware. We
don’t throw away an airliner every time we fly coast to coast
and get a new one.
On the surface, that seems like a really good idea. Again, come back
to my comments on rate. [The] Boeing [Company] builds lots of airplanes,
so there’s a production line. In the space business, if you
don’t build lots of rockets, even if you reuse it, it may be
just as expensive. You’re only building one a year. But that
was the concept. Kistler was going to have the first stage land back
down with airbags. They were going to “poof,” catch the
But the really interesting part was they were going to reuse the second
stage. Shuttle reuses the first stage; the solid rocket boosters are
reusable. They go land, big parachute in the water, boat tugs them
in, they clean them out, and they reload them. I’d actually
been through that trade study probably a dozen times, because I actually
worked for ATK [Alliant Techsystems, Inc.] for a while. We kept asking
the question, “Is this really saving us any money?” Depending
on whose study you looked at, total cost and everything, we found
out maybe. It depended on whose study you wanted to look at. You can
say yes, maybe it saves 15 percent. There’s a lot of people
who claim it’s going to save 100 percent, it’s going to
be just a fraction of the cost to reuse the hardware.
In the Shuttle Program, we reused the Shuttle, but we didn’t
reuse the tank, but we reused the engines. The Shuttle is a hybrid,
and this was going to take it one step further. They were going to
reuse the whole upper stage. It was going to fly back in and reenter,
and they were going to be able to reuse the whole thing. That was
a big technical challenge, but they had a lot of smart technical people,
and it looked like it might work. That was part of the Kistler thing.
Their technical thing was interesting, it was challenging. It had
some percentage chance that it wouldn’t work that way.
Their biggest challenge turned out to be meeting their funding milestones,
the business part. Again, we had the technical half of the proposal
and the financial part of the proposal. I had a bunch that had maybe
good technical but lousy financials, and I had ones that had good
financials and lousy technical, and all combinations in between. The
basic premise I had is, I don’t care how good the financial
proposal is, if it’s technically not going to work, it doesn’t
matter. The risk was on the financial side, because it had to be at
least technically viable. Doesn’t do any good to have a really
great business case for a thing that just isn’t going to work.
I used to say if it violates the laws of physics, I don’t care.
We’re not changing those this week, that’s a longer term
There was a whole series of milestones in all the proposals. The two
we finally chose had to meet financial milestones, and that’s
where Kistler ran into trouble. They had these fundraising milestones,
and they had this plan to raise money. The venture capitalist said,
“Well, this could work but it’s high risk. They’ll
have to do this, this, and this.” Basically they didn’t
get very far down the road, which is the same problem they had had
earlier, and they couldn’t raise the money.
We gave them money to get started, and in general most of this works
in the venture capitalist world, if I want to get $1 million from
you, you have to show me that you can make money at this, and one
of the ways you can show me you can make money and that you’re
financially viable is show me the money. They’d go out and they’d
get some money. By them getting money, other people said well, they
can get money. The government has selected them, so the government
must feel they’re going to give them money, therefore I’ll
give them money too.
The bottom line was they couldn’t meet those milestones. I basically
used a three-strike policy. You missed your milestone, we’ll
try again. You missed your milestone, we’ll try again. You missed
your milestone, you’re out. Just done. Government is done throwing
money at this. Gave you three shots at this, we’re done. To
me it was pretty simple. That’s the way it was set up, and they
didn’t meet their milestones. We tried, now we’ll go on.
Within about six months they’d pretty much not met their milestones.
Within a year that Space Act Agreement was terminated.
you saw those signs heading in that direction, were you working on
a contingency on how you were going to replace them?
We had basically said what we’d do is we’d dust off the
old proposals, but to be fair we’d have to put out another request
to let people know that the remaining money in that pot—I think
it was about $175 million—would be allotted for someone to come
take their place. That process had already started, “How would
you do that, how would you put it?” That all occurred after
I left. Rick [Richard J.] Gilbrech was in charge at the time and basically
went through the same process again. They let everybody bring their
proposals back in and do the same thing all over again.
other piece of that, your other selectee was up and running. How were
you involved in keeping up with what that group was doing and how
they were meeting their milestones?
The Space Act Agreement had milestones, and my job was to make sure
they were meeting their milestones. The early milestones for SpaceX
were actually pretty easy. Their fundraising ones, for them to come
up with their matching funds was easy. Elon [Musk, [Musk, SpaceX founder
and Chief Executive Officer] wrote a check, put it in the bank, he
was done. Very low risk for SpaceX to meet their matching fund requirement.
It was a little more complicated than that, but that’s basically
what it was. Because of his financial backing, financial status, he
literally could put money in an escrow account, or however they set
it up. They could get to those milestones pretty easy.
Then the trick was going to be, could he actually deliver the hardware
on time? When we looked at all the proposals, we also did like you
do in program management. We had our groups that looked at, given
a budget and given milestones, what is the probability that you can
actually execute on time, on schedule, for the money you’re
given. We call it the confidence level. If I tell you to go build
a Space Shuttle, and you tell me you can do it in five years for $5
billion, maybe that’s the 75 percent confidence level. We look
at all programs of similar complexities based on this huge database
of all programs ever done in aerospace. You can pretty much predict,
fairly accurately, what’s the probability that a good program
manager with those funds and that time can execute that job.
None of the proposals were higher than 20 percent. None. That was
the best. For the money they were promising—and we gave huge
discounts for the fact that they didn’t have to have NASA breathing
down their neck. In fact one of the keys of the Space Act is we’re
not buying a service, we’re just subsidizing development, we’re
going to come in later. We’re going to leave you alone. You
don’t get a boarding party, you don’t have to go to engineering
review boards, you don’t have to have these huge things.
You still are going to have your own milestones which we’re
going to send technical people to go check the box that you did one,
but by no means were they going to be held to the standards that we
would hold our programs to, as far as what is a really viable systems
requirement review, what’s a real preliminary design review,
all our entry and exit criteria. We weren’t going to send any
of the experts down to make sure they were dotting Is, crossing Ts.
They just had to have one really, because later we’re going
to evaluate the product for suitability technically.
Pretty much they wanted to be left alone. We said we’ll leave
you alone, here’s this money, like a research thing. You don’t
go down and breathe down a researcher’s neck every day when
they’re doing their research. The money is at risk, because
you don’t know what they’re going to come up with. They
start marching along, and since I was just there for the first couple
years, the progress was pretty good.
When they signed the Space Act Agreement there was a little matrix,
and it had six flights. One of the things we wanted to see was since
we’re not going to be in there specifying all the details of
all the reviews and the design, you have to demonstrate capability.
Before we would even consider discussing a contract, they would have
to demonstrate the capability. “You don’t review our stuff,
and you don’t bother us technically, we’ll just demonstrate
it.” NASA doesn’t go and review the Boeing design for
the 747 [aircraft], we buy airline tickets. So we said okay, well
They had originally proposed six flights. Three of them were funded
under the Space Act Agreement, and the money they received per flight
was actually pretty low. Purposely, to help the company succeed, a
lot of the money was front-loaded. A lot of the money was stuck to
give them to help them get off the ground, and help them entice other
monies from companies that would buy their services. The monies for
the actual flights were really just milestone payments. They really
weren’t money—and of course by law they couldn’t
be—to buy it. They weren’t a service. When they flew a
flight, we weren’t buying the service. It was just they demonstrated
There were six flights. Three of them were designated for COTS, and
three of them were designated for themselves and others and development.
I think their first flight was considered a flight for SpaceX alone.
A couple I think they had DoD [Department of Defense] interest, and
they had some agreement with others to fly a couple flights. I think
they even had commercial payloads scheduled for those. Then three
were specific to be COTS milestones.
I think the last flight was supposed to have flown in [September]
2009, if I remember the original schedule. These flights were all
going to occur in different quarters of 2008, 2009. They were motivated
to get it all demonstrated so then they could compete for a commercial
contract, so when the Shuttle retired they could start sending cargo
to the Space Station. That was the original schedule.
We looked at that and looked at the money they had, and what they
wanted to do, and there was probably less than a 20 percent chance.
But they said, “Hey, this is commercial, this is better. You
guys have no idea, but we can do it a lot better than the government.”
We calculated they couldn’t fly six flights by 2009, but of
course we’re the government. That was the whole arrangement,
and the initial progress of the SpaceX and Kistler responses to the
a hands-off approach during the development phase, did you, as a very
involved NASA administrator and former astronaut have issues with
safety? How you felt they were going to involve the element of safety
in their programs for what you would need to accept their spacecraft.
No, absolutely not. Because I forbid anyone to even discuss the fact
that they were going to try to send people. The folks down here in
the COTS office said we need to have COTS A, B, C and D; we have to
have this manned capability. I said no, we are not going to do that,
they don’t meet the requirements for that. If you have to do
that, that is an entirely different thing. We are going to see can
they be viable commercially to send cargo.
Making a business case for cargo was iffy at best. Making a commercial
case for crew has yet to be made by anybody. I have not seen a single
document in a decade that even hints that anybody could make a nickel
commercially sending crew to orbit. Now there’s the Virgin Galactic
[LLC] idea of sending people to space, which is not to orbit. That’s
for a couple-minute ride into zero-G [gravity], above the atmosphere
and back down, which I think might make money. Might, if they’re
But going to space and back means you have to accelerate the crew
to about Mach 3.5. Can you make money at Mach 3.5? I don’t know.
The airlines are having a heck of a time making money at Mach 0.8.
The supersonic transport, the [Aérospatiale-BAC] Concorde is
no longer flying. They couldn’t make money at Mach 2. Making
money at Mach 3 I think is iffy. Making money at Mach 25 is right
You could run the numbers any way you want. If I stick five people
in a little spacecraft and I launch it to Mach 25, let’s say
I charge $5 million a seat. That’s 25 million bucks. Anybody
that tells me today they can go build a rocket and a spacecraft, I
don’t care who it is, for $25 million and make money at it is
laughable. It’s laughable.
My prediction was that eventually you could do this commercially for
maybe half the price of what we were paying, if you were lucky. But
there’s two things that affect cost and profit in space. The
two things are production rate, like we discussed, and size matters.
It really does. You want to send a lot of people to space cheap? Go
take a Saturn V or an Ares V [rocket], stick 100 seats in it, sell
them for 5 million bucks apiece, and that’ll basically buy you
a Shuttle flight.
If you can stick 100 people in the payload bay of a Shuttle, you might
be able to make a nickel. I don’t know 500 people that have
got enough money to give you $5 million to go spend a couple days
in space. The only report that even addressed this—there was
a Tauri Group report in 2002, and it showed this commercial market,
and all these great studies they have. I think several years ago we
were supposed to have passed the point where we had 30 or 40 paying
customers to do what Dennis [A.] Tito did going to [International
Space] Station. I think we’ve had eight that gave Russia about
$25 million. The prediction was 30 or 40, and it’s this exponential
growing thing, so by today 100 people would be going to space this
Not seeing it happen. They actually did some study in Japan and all
around the world. Even in that report they predicted, because it’s
a supply-demand, cost-availability type thing, that if you could get
the cost down to $1 million, $2 million a seat, there might be a market.
There might be enough customers who could pay that kind of money that
it might make money. It’s like this Virgin Galactic thing. I
think there may be enough people—it’s probably not you
and me—who would be willing to pay $200,000 to be an astronaut.
Go up, go down for a few minutes, and get a little pin, or whatever
they’re going to give them. Maybe they’ll give them a
little champagne, I don’t know. It’s going to be a pretty
expensive bottle of champagne, if they can actually do it.
Of course they were supposed to be flying in two years. It’s
been a decade. Somehow someone’s going to have to subsidize,
try to make the money back on however much money they’re spending
a year over those ten years. The business case is going to get harder
and harder and harder. Now if you just throw away the investment,
don’t care about recouping that investment, then that’s
a different story. You just want to recoup your day-to-day operating
Making money at this at low prices is very very very difficult. The
crew thing, the safety thing—we were building the manned capability.
And again, it was walk before you run. So, if the commercial people
could prove they could reliably send cargo to space. Safety is reliability
plus safety. Reliability is not safety, but you can’t have safety
without reliability. Reliability is necessary but not sufficient.
If they could prove they had a reliable system to deliver cargo, then
we could start having discussions of what do you have to do to that
system to make it safe. Add abort systems, prove that the failure
modes are benign enough that you can escape from them, have reliability.
One of the discussions—I talked to Elon [Musk] personally quite
a few times. In fact there was a Futron [Corporation] paper that was
written that he commissioned, and the conclusion was to make money
and have high reliability, you need a very very simple rocket with
very very few parts. It actually said the most reliable rocket will
be a two-stage rocket with one engine per stage. He was going to build
this really big engine for the first stage and a medium size engine
for the second stage.
Of course that’s not what the rocket looks like today. I remember
asking him once, “Elon, you said the most reliable rocket is
the simplest number of parts, only one separation event, only one
engine per stage, least number of moving parts. Less parts, less cost,
most cost-effective, most reliable. What happened?” Tongue in
cheek, because I know what happened.
He looked at me and said, “Building a rocket engine is really
The interesting thing is there was another development going on that
did exactly what Elon said you should do. It was called Ares I. It
was designed based on that very principle. I know, because I designed
it. It had two stages, one engine per stage, using very reliable components.
Not only were they reliable, they were man-rated with all of the checks
and balances. Even that system’s predicted reliability with
a robust escape system was not much more than one in 1,000. Numbers
ran all over the place—they were like one in 1,250, one in 1,300—but
even that was difficult. Thinking you were going to do it without
that kind of attention to detail and robustness and testing is just
The original question, was I worried about it? No. Because in my mind
nobody was stupid enough to think we were going to turn over manned
spaceflight to a completely untried commercial entity that wasn’t
even commercially viable to do cargo. That was going to be two, three
steps down the road. As we moved on and we got beyond low-Earth orbit,
a few years of demonstrating reliable, repeatable, cost-effective
transportation, if all that happened, then we’d go back and
discuss okay, can you build the airline? Are there enough people,
are there enough destinations, is there enough market?
No one has yet to even show me how you can make money sending people
to space. Haven’t seen it, I’m waiting. I’d love
it to be true but it’s just not. The whole premise is false.
me ask a question that’s related, and a dull question, but it’s
one that we’d like to understand. You were the selection authority,
but you had a program office at the Johnson Space Center, a small
office. Can you share why that office was here, and the way that office
was formed, and how it worked with you in the process of moving this
First, from a high level philosophy, my predecessor felt that like
the exploration program, everything should be centered out of Headquarters.
My basic view is Headquarters doesn’t do work. Work is done
at the Centers, push work down to the lowest level. I’m a real
fan of work goes at the Centers.
Which is the Center for manned spaceflight? The Johnson Space Center.
That’s the Center for manned spaceflight. If you’re going
to look at supporting the International Space Station, part of the
manned space program, where do you want to put that work? The International
Space Station is the customer. The people who have experience with
supplying things to the International Space Station were at the Johnson
You probably could have put it at Marshall Space Flight Center [Huntsville,
Alabama] too, if you were just as interested in just the rocket part
of it, because they’re the rocket engine guys. They’re
really good at building rockets. We [JSC] operate the Space Station.
Since the real goal was commercial, you can’t have a commercial
thing without a customer. You have to be customer-centric, and the
customer was at Johnson Space Center, and of course just like Marshall
does, we have rocket scientists.
It made sense to put it here, because of course they’re very
closely coupled with the International Space Station, who is the customer,
if you will. Space Act Agreements have no requirements, but the follow-on
would be to have requirements. Requirements would come from the customer.
It made sense to have the oversight and the management—again,
not a lot of management. They weren’t a big office. And one
of the reasons that weren’t a big office, if they were managing
the development of the system, they would have been a big office.
Jokingly, there’d probably have been two of them for every one
of the contractor, looking over their shoulders. But it was commercial,
so it had to be small.
Their job was just to monitor the fact that they made milestones.
That really was all their job was. Were they meeting milestones, and
were we getting things ready for the eventual ability to go to a contract
to buy services for the Space Station? Again, they were supposed to
do COTS, they were supposed to demonstrate a capability. 2009 was
the promise. Then we would talk contract, because if they flew in
2009 we’d have time to do a contract. The Shuttle would retire
in ’10, and then we could buy services.
Pretty straightforward plan. That’s why [the office] was small,
and that’s why it was at Johnson Space Center. I think at one
point there were supposed to be 160 billets at Headquarters, and by
the time I left I’d gotten it down to about 100, because, again,
work goes on at the Centers. Stop amassing people up at Headquarters,
all we do is get in everybody’s way. Our job is to provide top
cover. I’m the one who goes to Congress and gets yelled at and
screamed at, fights with the Office of Management and Budget.
By the way, a little side note—in the budgeting process, the
Congress wasn’t my problem. Congress really supported exploration.
Office of Management and Budget was my archenemy in the administration
for which I worked. My hardest battles were fought with OMB, not the
Congress. The reason we didn’t get the monies we needed was
because of the Office of Management and Budget, not Congress. If OMB
had authorized the money in the budget request, we would have gotten
the money we needed to go do exploration. But we had people at OMB
who wanted to kill the manned space program. That was their goal.
you believe part of that was to move this whole commercial effort
forward? Or was it two separate issues?
At that time all they cared about was getting the money away from
manned spaceflight, NASA. They were big fans of “we’ll
just make it all commercial. We don’t need NASA doing this,
we’ll just buy it.” That was their claim, you can just
buy this stuff. “Why the heck do we have to pay me money to
go develop rockets? You guys cost too much.”
Which is interesting—if you look at the end of the Space Shuttle
Program, I think it was about $2.7 billion a year for the entire fully
burdened Space Shuttle budget line. The average for the 30-year history
of flying Shuttles from ’81 till the retirement of the Shuttle
[in 2011] was an average of about 4.5 flights per year. If you do
the math, that equals about $600 million per flight. Fully burdened—government
cost, contractor cost, gas, astronaut, tank—everything that
Let’s say we assumed a ridiculously cheap price of $25 million
to $30 million a seat, for seven seats. That’s worth about $200
million approximately. Subtract that from $600 million, you get $400
million. We could bring up about 30,000 to 40,000 pounds to low-Earth
orbit, so it’s about 10,000 bucks a pound. Space Shuttle is
about $10,000 per pound, or something like that. Even if you inflate
a little bit, 10,000 to 20,000 bucks a pound, less than 10,000 bucks
The promise was everyone could do it an order of magnitude cheaper.
That’s where you get the 1,000 bucks a pound. The promise was
commercial could do 1,000 bucks a pound and OMB was like, “Wow,
if I could do it for 1,000 bucks a pound, look at all the money I’m
going to save.”
Isn’t SpaceX supposed to be launched today [CRS-2 mission to
about 40 minutes.
Hopefully that goes well. We have a CRS [Commercial Resupply Services]
contract for $1.6 billion for 12 flights. That’s $133 million
per flight. I think I saw they’re bringing up about 1,200 pounds,
so that’s a little more than $100,000 a pound. I think they
inverted the ten. It’s not one tenth the price, it’s ten
times the price of flying the Shuttle. That’s just what it is.
My basic contention is we did the experiment and we have the results,
it didn’t work. It’s that simple. Whether the rocket works
or not is inconsequential. That was the easy part. The part was can
we buy services for the promise of 1,000 bucks a pound. I don’t
see a demonstration of that.
know Rebecca [Hackler] has some questions, so I’m going to switch
over to her.
you don’t mind going back to the beginning—there were
some programs in the early 2000s run out of different NASA Centers
that could be seen as antecedents to the COTS program, particularly
Alternate Access to Station and ISS Commercial Cargo Services. I was
wondering how much you were aware of those when the COTS program was
being put together, and how much the ideas from those programs informed
how COTS was executed.
When those were going on, I was here at JSC. I was aware they were
happening, but I wasn’t involved with them. For example the
RLS, which was the Reusable Launch System, was one of the big ones.
I actually did get very involved in that, not by my own desire. I
got called in the office one day—JSC had been hands off of X-33
[spaceplane] and RLS. That was one of the examples of this was going
to be this Shuttle replacement, commercial. I think they called it
VentureStar or some pretty cool name. It was being developed by the
Skunk Works in Lockheed [Martin’s Advanced Development Program].
My understanding at the time was we were hands off. Our management
at the time did not see that this was very viable. I think they got
a call from Headquarters saying, “You will look at this and
you will figure out, as the manned spaceflight Center, how to man
rate this system.” As one of the senior astronauts working advanced
programs, just going to meetings for the Astronaut Office, you got
volunteered. [James E.] Van Laak I think was the guy running this
little group we put together. “You guys write the human rating
requirements for these new spacecraft.”
This was my first introduction. Let’s go pull up the requirements
for Gemini and Apollo and Mercury, the manned rating requirements
for space stations, and we’ll start there, because there were
the human rating requirements. In fact there was a JSC document that
came out of that after some very interesting meetings and discussions.
That document I think is pretty much forgotten and lost, you probably
couldn’t even search and find it, but it eventually became the
human rating requirements that are now the Headquarters NASA directive,
after about four or five reiterations.
The interesting thing was when I said let’s just pull off all
the old ones and read through them, there must be a lot of great lessons
learned on how to man-rate a system. It didn’t exist. It wasn’t
written down. That was my first shock. Then we go out and we visit
VentureStar, and there were these other programs going on. Start asking
them simple questions, technical questions. Like, “You say it
weighs this much and it’s going to go this fast and use these
engines with this fuel.” Rocket science is rocket science. The
basic equations aren’t really hard.
I say, “I don’t get it. You’re going to build something
the size of the Space Shuttle.” The volume of this vehicle was
the size of the solid rocket boosters, the external tank, and the
Space Shuttle all rolled together. Yet its structural weight was the
weight of the Space Shuttle. My first question was, “What unobtainium
are you building this thing out of.” If you did the math—because
this was a single stage. Remember when I said I came to the conclusion
it had to be two-stage, Elon said it had to be two-stage. Anybody
who’s been in this business, you have to be two-stage, because
the Earth just has too much damn gravity. We’re not changing
that, and rocket fuels are only so good.
When you did the math, their payload fraction was like zero. In fact
it was a negative number. What miracle is going to occur that this
thing is even going to work? That was the first problem. Then crew
safety came in. We said, “Okay, so what are your provisions
for crew safety?”
They said, “What do you mean? It’s safe.”
“Seven nines.” Which means 0.9999999 reliable. “It’s
an elevator to space.”
I said, “Really. Based on what?”
“It just is.”
Wow, that’s a pretty good claim. Like the Shuttle claim, “It’s
an airliner, it has all this reliability.” I say, “Well,
most rockets I know don’t quite get to that many nines.”
In fact to demonstrate that you’d have to fly probably one billion
times without a problem. Then my next question is so what are provisions
for crew safety, and what’s the crew interface.
“Why do you need a crew interface?”
“To look at the systems, turn it on, turn it off, fly it.”
“Push the button and it goes.” No joke. This was the entire
mentality at that time. Most of this was pretty laughable, to be quite
honest. Technically it was completely non-viable. There were some
technically viable ideas out there. There were some that were like
capsules and heat shields. I have on my shelf lots of different things.
Some of them were technically fine, they just were like variations
on a theme.
I tell people, “Look at the airport now.” If you were
to walk out in an airport in 1967, you’d see the very first,
brand-spanking-new shiny Boeing 737s. Except that the picture is in
black-and-white and made with film, if you took a digital picture
of the same spot at the same airport today, you’d see a nice
shiny 737. It’s about the same length, it’s about the
same size wings. The engines are fatter because they’re high
bypass turbofans. But why do they look that way? Because physics dictates
Why do spacecraft look like teardrop capsules? Because physics dictates
that answer if you want a robust, reliable reentry vehicle. We tried
it with the Shuttle and we found out we weren’t very robust.
We could do it, but it’s very very very difficult and very expensive.
Yes, I was aware of all these different programs. I’d seen lots
of different ones. I didn’t know all of them. I wasn’t
involved obviously in the contracting or at that level. We did pull
a lot of that stuff off the shelf. A lot of those kinds of things
were proposed by the same people that proposed the earlier ones. A
lot of that history was brought up.
In fact Rocketplane had been one of the ones who had gone through
this. The plus side was they had developed all this hardware. By weight
they had 70 percent of the hardware, and that gave them a huge advantage
from a material standpoint. Again, the technical stuff, you can do
the math. The business case was actually the more difficult part.
final selection between either RpK or one of the other six finalists
was more or less a decision between their stronger technical case
or the other company’s stronger business case. What was the
final tipping point for you in making that selection?
In order to be selected they had to be technically viable. That was
the tipping point. They were technically viable, others were not technically
viable. In other words they said, “We’re going to go fly
this widget and carry seven people.” If I did the math and said,
“There’s no chance that you could possibly do that, because
the math doesn’t work out,” then they were eliminated,
because it didn’t matter how good the business case was, if
it wasn’t going to work, it wasn’t going to work.
you have time for me to ask one more question—you said the FAA
was a stakeholder in the selection process. Can you talk a little
bit more about their role?
Because this is commercial—I’ve actually built an experimental
airplane—it’s regulated by the FAA. Everyone said well,
this is commercial, so it’ll be regulated by the FAA. The interesting
thing is if you go look at the laws—it was just extended [2012
FAA reauthorization bill]—the FAA is in a really bad position.
NASA is not a regulating authority. The FAA grants the licenses, just
like when I build an experimental airplane, the FAA grants me a certificate.
If I meet certain criteria I can get an airworthiness certificate
for an airplane.
They were going to do the certificate to allow you to go fly in space.
They actually approved the launches. When [ScaledComposites] SpaceShipOne
[2004 Ansari X Prize winner] launched, they had to have the FAA state
that Mojave could be a spaceport and they could come back in out of
the atmosphere and land back on the Earth. There’s legislation
that states FAA, you’re the regulating authority, but you have
absolutely no authority to enforce any standards on these providers
until they kill somebody. It actually says that. It has been lobbied
to get that legislation to allow these people to run whatever they
want. Just like they didn’t want NASA, they don’t want
the government to regulate them. They want to be self-regulated.
Some groups self-regulate. You have groups that get together and have
conferences and share things and come up with their own internal codes
of standards, technical groups. That can work in a mature industry.
This is not a mature industry. They actually said, “We’re
the Wild West. We want to go do this commercially, and we can’t
possibly make any money if you overregulate us.” It’s
the classic do you regulate a private industry, should you regulate
the airlines, should you have FAA standards to dictate design standards
and safety standards on commercial airplanes, should you have that
for rockets and spacecraft?
Right now the answer is the FAA is responsible, but by law they’re
not allowed to do anything. In fact that was supposed to have expired
in 2012. I think they got a several-year extension [to 2015]. Because
by 2012 there’d be hundreds of these things flying, and thousands
of people going to space. I’m still waiting. I don’t envy
the FAA’s position, they’re in a really bad spot.
The biggest thought I’ll share with you—people have lost
sight of what the original plan was. NASA was given a vision to go
explore. It’s something that NASA can do and nobody else can.
We had tens of thousands of people with a lot of talent to go do that.
It was going to be a pretty exciting time. I felt in order for commercial
to be viable, actually NASA had to be viable, doing the next big thing,
and then the commercial could keep filling in.
For example, to really make money—and I believe Dr. Griffin
has written a paper on the subject, if you ever look it up—the
real place to make money is the Moon. Commercial people sending commercial
supplies to the Moon, it’s like the Antarctic model. It was
government-only to do the Antarctic bases, but now a lot of services
are provided by commercial providers, and they make money at it. It’s
a pretty remote place and hard to get to, but commercially viable
boats and planes can go do that.
As these people learned in low-Earth orbit—to send a pound to
the Space Station is worth so many dollars, to send a pound to the
Moon is worth a lot more. There’s probably a better business
case actually to go to the Moon, but that would mean you’d have
to have a customer. International Space Station is a customer, but
it’s a pretty limited customer if you think about it. There’s
only three to six people up there at a time. They only use a few tons
of supplies a year, that’s it. The value of that is measured
in hundreds of millions. If you were to actually be supporting an
international group on the Moon or Mars, that’s worth a hell
of a lot more money commercially.
The other thing that’s interesting, that I find, actually to
be quite honest, annoying, is the definition of commercial. Commercial
is I buy a commercial service and I pay you for that service. Somehow
that’s turned into I’ll give you government money to develop
the widget, and then you get to sell it to me at whatever price you
want to. That’s not commercial. But that’s what this has
devolved into. The fact that it’s devolved into that, and that
now we have put the manned spaceflight program completely dependent
on a completely unproven commercial industry is to me just foolhardy.
The fact that the word safety is hardly ever even mentioned, I find
actually quite sad.
I can share this with you very quickly; it is part of a press release
that came from NASA Headquarters that said, “NASA initiatives
like COTS are helping to develop a robust U.S. commercial space transportation
industry with the goal of achieving safe, reliable and cost-effective
transportation to and from the ISS and low-Earth orbit.”
Bullshit. It’s just bullshit. I’ll tell you what it is,
and it was told to me face-to-face by the person who’s doing
this. It’s politics. In 2008 Lori [B.] Garver looked at me at
a symposium, out at Stanford [University, Stanford, California], shortly
after I left NASA—I’d never been at this thing before—and
said, “When Hillary Clinton is elected President I’m going
to cancel Constellation.”
I said, “Why would you do that? One, you seem not to know very
much about it. Two, what if you find it’s actually meeting its
goals, and has issues, but it’s doing well?”
She looked at me and says, “You don’t understand, it’s
This is all about taking money away from red states [Republican party
strongholds] and sending it to people who support their political
desires. It’s that simple. Anybody who thinks it’s anything
else is full of themselves. I lived in [Washington] DC for about two
and a half years. I couldn’t wait to get out. Eight-mile-by-eight-mile
square, referred to as a 64-square-mile logic-free zone.
remember you saying that before, and I thought that was pretty interesting.
It’s absolutely true. If you try to think like myself and others
who are rocket people, and people who understand operations and rockets
and design and engineering and usually think in a fairly logical manner,
you will not get it, because it doesn’t work that way.
That statement is complete and utter horse pucky. There’s no
safety standards put on these people. It’s not cost—100,000
bucks a pound? I’m sorry, I’m failing to see that. Part
of the reason is the rockets are just too damn small to be cost-effective.
You want to make money, build bigger rockets, build more of them,
that ain’t happening. Faster? We were supposed to do six flights
in 2009. This is the second or third one in 2013. The $250 million
of initial investment has now turned into $1 billion and growing.
Just go add up all the milestones and additional milestones and all
the other payments. It’s complete nonsense.
Interesting point—when we flew Ares I-X, which flew right after
I left, JSC went back and did a total cost analysis—full-cost
accounting, government, all of our waste and all of our overhead.
The number I saw was about $400 million to fly that flight. The cost
to get to the first Falcon 9 flight was about $400 million. They flew
two stages, we flew one stage and a simulated second stage. But we
also flew something that was three to five times bigger, that was
able to toss about 50,000 pounds to low-Earth orbit, not 10,000.
There’s probably a reason they’re only bringing up 1,200
pounds versus the 6,000 pounds that they say they can fly. If you
look at the notes saying they can lift up like 60-some hundred pounds,
then why are they only sending up 1,200 pounds? It’s the math,
and the physics don’t lie.
you. I know we’ve kept you a few more minutes than what we should
have, so thank you.
Return to JSC Oral History Website