NASA has accepted a nine-month slip in the first demonstration flight of the commercial space tug Space Exploration Technologies Corp. (SpaceX) is building with the help of $278 million
in government financing.


The U.S. space agency is subsidizing development of the Dragon capsule and Falcon 9 launcher by Hawthorne, Calif.-based SpaceX, which in return is committing to a series of milestones culminating in a trial cargo run to the international space station.

SpaceX is one of two U.S. firms receiving financial assistance under the Commercial Orbital Transportation Services (COTS) program NASA established in 2006 in hopes of stimulating a private-sector solution to the agency’s pressing space station resupply needs.


With development not going as smoothly as SpaceX had expected, the startup company recently renegotiated its COTS agreement with NASA. The revised deal defers
the first of three planned demo flights by nine months, to June 2009,
and gives SpaceX more time to get ready for a demonstration
readiness review that had been scheduled
for February.
The second demo flight
now is slated for November 2009, five months later than previously planned, while the third and final
demo flight
now is supposed to occur in March 2010, six months later than

SpaceX President Elon Musk on April 8
declined comment on the new deal, but said
a press release was in the works.


Alan Lindenmoyer, NASA’s commercial crew and cargo program manager, said in an interview here that SpaceX and NASA signed the renegotiated COTS agreement in late February, formalizing months of discussion about
program milestones.


“You can imagine that with any development program like this – with a brand new engine, with a brand new rocket, with a brand new capsule – there are going to be some development hurdles, so that is what he’s seeing,” Lindenmoyer said, referring to Musk


In exchange for accepting later demo flights, NASA added four new hardware-development
milestones for SpaceX to meet on the way to liftoff. The first of those
, a hot-fire test of one of Dragon’s reaction control thrusters, was accomplished in March, earning SpaceX a $6 million payday.


SpaceX’s next hardware milestone is a nine-engine hot-fire test slated for September. The company test fired
a cluster of three of the Merlin engines in March and plans to spend the rest of the spring and summer working toward
the nine-engine test, whose successful execution will result in a
$22 million payout from NASA.


Between now and then, SpaceX can earn a separate $22 million from NASA for completing a preliminary design review of its third planned demo flight.


Lindenmoyer said NASA has given SpaceX a total of $145 million to date for the successful completion of eight milestones.


About a week prior to inking the new deal with SpaceX, NASA announced it was adding Orbital Sciences Corp. to the COTS program. NASA agreed
to give
Dulles, Va.-based Orbital
$170 million that
originally had been allocated for another company, Rocketplane Kistler.


Doug Cooke, NASA associate administrator for exploration systems, said he is not worried that the COTS program is about to see a repeat of the Rocketplane Kistler situation. In that case,
renegotiated milestones were not reached and
the Oklahoma City-based company’s efforts to raise the private capital it needed to finish its vehicle ultimately collapsed.


“In the [Rocketplane Kistler]
case we felt like it was a brick wall we had run up against,” Cooke said. “We’re not seeing anything like that here.

Meanwhile, Orbital
met its first COTS milestone – a kick-off program plan review –
in March. Lindenmoyer said Orbital would soon be paid $10 million for meeting that milestone.


Orbital has seven more COTS milestones coming up this year – various design reviews
worth a combined $90 million.


The company’s first hardware milestone is a ground-based avionics test slated for June 2009, according to Orbital’s COTS agreement, a copy of which is posted on the NASA Johnson Space Center’s Freedom of Information Act Web site


Orbital’s most important milestone also happens to be the smallest in terms of the NASA payout. Launching the proposed Taurus 2 rocket and its cargo module to the station in December 2010 would mark the completion of Orbital’s COTS demonstration effort and net the company a final
payout of $2.5 million.