Unlimited Opportunities: The Future of Public-Private Partnerships in Space

Unlimited Opportunities: The Future of Public-Private Partnerships in Space

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On a Thursday evening less than 22 months ago, human space exploration took another giant leap, one that was concluded with a splash from a water landing of the Dragon capsule 900 km off the LA coast. The first privately built and operated spacecraft to ever deliver cargo to the International Space Station (ISS) had just touched the Pacific Ocean, and Space Exploration Technologies Corporation, or SpaceX, had arrived.

What is interesting is that Dragon was hardly a technological breakthrough. But it was a breakthrough nonetheless, for a private company had now matched the orbital delivery capability previously exhibited only by a handful of government-owned agencies in a small selection of nation states. And as post-analysis (“National Post editorial board on SpaceX,” 2012) would confirm, every benchmark set had been met during the low-Earth orbit (LEO) voyage, and NASA’s Commercial Orbital Transportation Services (COTS) program had been validated.

LEO had been the destination for NASA’s space shuttles for nearly four decades before their recent retirement. Unsafe, expensive, and messy, the space shuttle program had become NASA's white elephant, holding it back from achieving the dreamy-eyed forefronts of outer space, which have been explored only in certain futuristic genres of fiction so far.

Through COTS, NASA has practically outsourced LEO operations to private contractors such as SpaceX, raising hopes that it may get back on the dream voyage of the solar system and beyond.

Similarly, when Expedition 38 crewmembers Michael Hopkins of NASA and Koichi Wakata of the Japan Aerospace Exploration Agency demated the solar-powered Cygnus commercial spacecraft during its first ISS trip earlier this year, it was only the beginning of what is expected to be a space traffic jam of sorts (Kremer, 2014) on the ISS route. America’s newest commercial space freighter, built by Orbital Sciences Corporation with seed money from NASA, had also taken up where the shuttles had left off, and restored NASA’s capabilities through a public-private partnership.


Private Participation in Space: Past and Present


It’s not as if private participation has never been a part of space exploration: Boeing and Lockheed Martin have been working with NASA for decades. The difference is that those “cost-plus” arrangements, where companies are reimbursed the cost of a project plus a guaranteed profit, totally ignored competition and even provided incentive for inefficiency (Anderson, 2013).

All that has changed with the dawn of the Space Act Agreements, NASA’s vehicle for partnering with commercial players. Now, NASA pays in increments only once milestones are met, and management and design are left to private companies, thus fostering collaboration and assigning greater decision-making and responsibility. This development should be understood keeping in mind the fact that privatization is not simply a governance or management exercise, but rather a philosophical position. While space has traditionally been the playing ground for state agencies, Space Act Agreements are the first sign of a new move towards private participation, one that has now been validated by the performance of players such as SpaceX and Orbital Science.


What PPPS Bring to the Table


Increased Competition & Lower Costs

Traditional partnership practices involved dealing with heavy government bureaucracy and fundamental changes in the way commercial companies operate. While a little regulation is welcome, NASA has earlier asked private partners to track all employees’ activities, whether engaged in the project or not (Commercial Spaceflight Federation, 2011). Since not many private players could bear to participate under these terms, relatively few companies were interested or involved with little or no meaningful competition. Since PPPs are not governed in this manner, many more companies and subcontractors are now encouraged to participate, and low-cost, innovative solutions are possible.

The results are already in from the COTS Cargo development program, which has achieved successes at a fraction of the cost of a traditional government launch-vehicle program. In a hypothetical scenario, if NASA were to use traditional approaches, the costs may very well have become prohibitively high and led to cancellation of the development program.


Greater Flexibility

As opposed to government-led programs, PPP programs such as SAAs are designed to contain virtually anything both parties agree to include, and can thus be flexible to be easily tailored as needed. Thus, state agencies can forever be rid of the rigid, irrelevant, and counterproductive provisions and procedures that they may had to engage in when dealing with private players in the past, reducing redundancy and improving cost-efficiency and performance.


Lesser Burden on Public Investment

Parallels can be drawn between the public investment so far on state-run space agencies such as NASA and the U.S. government’s early support of the railroad and the aviation industry. Development of basic infrastructure and technology is the government’s prerogative, and as with the latter, it was the government’s aggressive investment in infrastructure that laid the foundation for private companies to succeed. The same is true for space exploration.

Now, funding from both public and private sources can be used for developing capabilities for space exploration for both commercial and government purposes. Private investment can thus enable a program to achieve the same result at a lower cost to the government. A NASA (2011) analysis concluded that SpaceX was able to build its Falcon 9 rocket for about one-third of what the agency would have spent on a similar project under its traditional model.


Greater Innovation at Private AND Public End

As opposed to complete privatization, PPPs with established state-run space agencies with a long track record and successful execution of joint projects can provide private spaceflight companies with the legitimacy and the regulatory nod needed to bring traditional investors to the table. As greater private investment flows into research and development, greater innovation can come in from the sector, while NASA grapples with shrinking science budgets and limited resources.

In the meanwhile, PPPs also free state agencies to no longer use precious managerial and financial resources on what has already been explored, and allows them to simply outsource the already explored frontiers to private companies, leaving them free to move on to bigger things. Eventually, a model could evolve where the state-run agencies are solely involved in pushing the envelope on deeper outer space research, while private companies run transport and tourism infrastructure within established boundaries


Safety with Sovereignty

As space partnerships move from a manager-contractor relationship between the state and private players to join ownership and collaboration, companies are now free to focus on the most essential aspects of a program, meeting the requirements for performance and safety at a reduced cost. NASA’s experience with SAAs shows that despite non-state collaboration, safety and performance requirements do not have to be put up for debate. Adequate insight versus oversight level and processes written into PPP agreements can ensure safety and preparedness as necessary.

Another interesting aspect of PPP models is the less reliance on other governments for expanding capacity and engaging in join programs. For example, since the end of the space shuttle program, NASA has relied on Russia to take its astronauts to space in Soyuz rockets. Given the current sanctions against Russia and the looming clouds of another cold war, this can adversely affect space programs and planning. With private participation though, NASA could’ve simply hired commercial companies for space taxi services. This is especially relevant since SpaceX says that it could provide rides to NASA astronauts at $20 million a seat, a third of the Russian price. (Chang, 2012)


The Way Forward

The partnership between NASA and private companies through Space Act Agreements show a new level of understanding and cooperation between the public and private sectors, and give some hints of how commercial space travel and exploration may unfold in the future.  It is not beyond a few years before Virgin Galactic and Space Adventures go for suborbital joy rides to space, for which hundreds have already signed up. As of now the list mostly comprises of the Tom Hanks and Katy Perrys of the world, but it’s only a matter of time before a mass market appears.

In the longer-term dreams, Elon Musk is vocal about how he plans to satisfy humanity’s needs to get to Mars within a decade or two.

Musk, the founder of SpaceX, had also famously said that he would do this “with or without NASA”, but later acknowledged that they could not have started SpaceX, nor reached this point without their help.

Thus, the support and cooperation of the state is of foremost importance as well. And the state seems ready to have recognised the same and is ready for action! As UK’s Minister for Universities and Science David Willetts (2014) recently said in a speech, “…the challenge for us in Europe is to be as ambitious and active as these other major players – commercially-focused and joined up. There are massive opportunities – and we must seize them.” 


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