NASA, then, had no interest, in Goldin's words, developing or releasing a request for proposals for any launch vehicle, even as a technology demonstrator. If the X-2000 would not be built, on what X vehicle would NASA flight test technologies for the Access to Space Technology / Demonstration Program? The answer was the DC-X, built by McDonnell Douglas for the Strategic Defense Initiative Organization's SSTO (now the Ballistic Missile Defense Organization's SSRT) Program.

NASA had plans to use the DC-X as a technology testbed as early as the summer of 1993. The Access to Space Option 3 team, in fact, had suggested that the DC-X serve as a flight test vehicle for a range of advanced technology and operations concepts, such as structures and materials (e.g., reusable cryogenic tanks), thermal protection systems, and avionics (see "The DC-X" in Fact Sheet 2). As the Access to Space Technology / Demonstration Program evolved as a possible joint project of NASA and the Defense Department, the Pentagon would pay for DC-X flights ($5 million) and divide the cost of testing reusable fuel tanks, propulsion systems, thermal protection systems, and other technologies on the vehicle with NASA.

By March 1994, the DC-X Delta Clipper had flown three times, but had not launched since September 30, 1993, because of a lack of funds. The project needed an additional $5 million to undertake from 5 to 15 more flights in October and November, but the money was not forthcoming, even though it was in the budget proposed by the Clinton Administration. The new fiscal year's budget had not yet been established. When the Defense Appropriations conference bill went to the White House for signature on November 10, 1993, ARPA was to receive $40 million for the SSRT Program, of which $5.1 million was earmarked for finishing the DC-X flight tests.

Despite the enactment of this legislation into law, the $5 million intended for the DC-X test flights still had not yet been released as January 1994 was coming to a close. What had happened in the meantime was a recision, a reduction of program funds proposed by the Executive Branch to the Congress. On December 31, 1993, the Comptroller of the Department of Defense submitted recision proposals amounting to $314.7 million for several programs, including $50 million from the "ARPA space program," that is, the SSRT Program. The battle over the recision lasted through most of January 1994, and saw Rep. Newt Gingrich, then House Minority Whip, and Rep. Bob Walker, joining the fight to save the SSRT Program and the DC-X test flights. On top of the recision, Pentagon Comptroller John Hamre rejected the amount appropriated by Congress to ARPA for the SSRT and would only allow $10 million. Major Jess Sponable, in charge of what was left of the SSRT Program since 1992, would have to cancel the DC-X contract on February 1, 1994, unless the ARPA funds were released to him. They were not.

Instead, on January 31, 1994, NASA's Administrator Daniel Goldin released $900,000 in NASA funding to keep the DC-X at the White Sands Missile Range and to defray the Clipper Site overhead charges until the ARPA funds could be released. Not until late in April, however, did the Pentagon finally release $5.1 million from ARPA to BMDO to continue DC-X testing. About $3.5 million went to McDonnell Douglas, while the rest covered range expenses at White Sands Missile Range.

The DC-X flew again on June 20, 1994, after spending nine months in storage, its previous flight having taken place on September 30, 1993. This was its longest (136 seconds) and highest (870 meters) flight to date. The vehicle flew again a week later, and demonstrated its ability to land under total control of internal programming.

NASA had rescued the Delta Clipper flight program. The space agency began to draw up plans for use of the DC-X as a NASA technology testbed, as the Access to Space Option 3 team had recommended. At the head of the DC-X Evaluation Team were Gene Austin and Jim Kennedy. Their Pentagon counterparts were Col. Gary Payton, Maj. Jess Sponable, and Curtis McNeal of the Ballistic Missile Defense Organization. The Technology Team, headed by Terry Greenwood, and the DC-X Integration and Demonstration team, headed by Steve Cook, considered cryogenic tanks, primary structures, thermal protection systems, propulsion, and avionics, as well as contract and cost issues.

When they briefed Dan Goldin on the project, on March 1, 1994, they discussed the technologies needed for single-stage-to-orbit flight "in a Real World, Operational Environment." The candidate technologies were thermal protection panels, a graphite-composite liquid hydrogen tank, a graphite-composite structure between the fuel tanks (the intertank structure), a liquid-to-gas rocket control system, hazardous gas detection equipment, and graphite-composite feedlines and Russian flange hardware for the propulsion system.

The DC-X Evaluation Team also discussed the need to perform the rotational maneuver that was critical to proving the concept of a vertical lander. The DC-X had not yet performed this maneuver. The full-scale version of the Delta Clipper would return from space nose first, then perform the rotational maneuver (turning 180 degrees), in order to land on its base, not its nose. In addition, the group briefed Goldin on new approaches to managing the project, which they called a "New Way of Doing Business Within NASA." Several factors made this approach "new." They included "Employee Empowerment," "Limited Government Oversight," a small budget, limited personnel, the "acceptance of Limited Risk," and the "By-Pass[ing of] Bureaucracy." All of these were aspects of "rapid" program management, the kind of management approach that the Lockheed Skunk Works claimed as its own, and NASA was not known for its use of "rapid" program management.

One of the most daring aspects of the proposed "New Way of Doing Business Within NASA" was the use of cooperative agreements with the technology and integration contractors. In fiscal 1996, NASA had 1,027 active cooperative agreements, of which only 76, or 7.4 percent, were with large commercial firms, that is, firms that do not fit the federal guidelines established to define small businesses. Traditionally, NASA used (and continues to use) cooperative agreements with nonprofit institutions and universities in cases requiring a close working relationship. Cooperative agreements with commercial firms support research and development; provide technology transfer from the Government to the recipient; or serve to develop a capability among U.S. firms to potentially enhance U.S. competitiveness. In contrast, however, NASA now began to view the cooperative agreement as a new way to acquire hardware, initially the DC-X vehicle. This was a dramatic departure from traditional procurement practices, and, as a result, the cooperative agreements issued for converting the DC-X into a NASA technology testbed broke new ground.

NASA's plan to convert the DC-X into a NASA single-stage-to-orbit technology testbed (under the NASA name DC-XA, where "A" stood for Advanced) and as a "management showcase" could not have come at a better time. The DC-X flew again for the fifth time on June 20, 1994, after spending nine months in storage, its previous flight having taken place on September 30, 1993. This was its longest (136 seconds) and highest (870 meters, 2600 feet) flight to date. The vehicle flew again a week later, and demonstrated its ability to land under total control of internal programming. A ground equipment explosion caused a shock wave that ripped a 4-by-15-foot (1.2-by-4.6-meter) hole in the DC-X aeroshell. Pete Conrad, watching his computer screen in the Flight Control Center, heard an abort request from his two colleagues and activated the software command for "autoland." The DC-X safely returned to the ground. The crew executed a successful intact abort. This was an aerospace first.

The McDonnell Douglas Delta Clipper team now had to decide what to do with the vehicle. During the July 1994 program progress and status report, Paul L. Klevatt, director of McDonnell Douglas's SSRT effort, tackled that difficult question. He began by praising the vehicle's achievements to date, including accomplishing an unprecedented turnaround time of only seven days between flights and flying a normal trajectory, despite severe damage, until issuance of the autoland command. Though a final report would not be available until three days later, the most likely cause of the "anomaly" was an explosion of hydrogen and oxygen outside the vehicle. The damaged composite aeroshell, liquid hydrogen tank, and other parts all could be repaired. That was the good news.

Klevatt explained that two options existed. Option 1 was to repair the vehicle and complete the remaining three or four flights as soon as possible. Option 2 was to transfer everything to NASA in accordance with NASA's DC-XA planning. If Option 2 were pursued, two paths could be followed. Option 2(a) was to repair the DC-X incorporating changes learned from the "anomaly" and complete the flight schedule in 1995, while Option 2(b) was to repair the DC-X incorporating the DC-XA changes and fly the upgraded vehicle in 1996, as called for by the NASA DC-XA plan. Ultimately, ARPA would pay McDonnell Douglas $2.5 million to repair the vehicle's hydrogen tank and replace the damaged sections of the composite aeroshell, and the Defense Department would transfer the vehicle to NASA in July of 1995.

These options were open because NASA had issued NASA Research Announcements (NRAs) for technology testing on the DC- X, published in Commerce Business Daily on February 7, 1994. A separate agreement or contract would be issued for integrating the technologies on the vehicle. NASA held an industry briefing for NRA 8-11, Advanced Propulsion, and NRA 8-12, Advanced Structures and Thermal Protection Systems, on February 18, 1994, to explain the program to potential industry bidders. The NRAs would not be released until February 23, 1994. The briefing emphasized NASA's commitment to "fast track" procurement, partnerships with industry, and a program focus on producing hardware, not paper studies. One overview, echoing Clinton during the Presidential campaign, summed up the Access to Space Option 3 Team theme: "It's Ops Cost, Stupid."

The briefing also made it clear that NASA saw the future full-scale single-stage-to-orbit rocket as key to maintaining the International Space Station. As for the DC-X, NASA wanted to use it as a testbed for single-stage-to-orbit technologies. The space agency was requesting industry proposals under the NRAs, and would make a decision by March 3, 1994. NRA 8-11, Advanced Propulsion, sought to have industry undertake research in five technical areas, such as bipropellant and tripropellant thrusters and thrust cells, oxygen-rich turbine drives, and the use of Russian hardware for both expendable launchers and advanced launchers, such as a single-stage-to-orbit rocket. NRA 8-12, Advanced Structures and Thermal Protection Systems, focused on fuel tanks, thermal protection systems, graphite-composite primary structures, and health monitoring systems and other nondestructive means of evaluating vehicle systems.

Because NASA was using the cooperative agreement in a new way to convert the DC-X into the DC-XA, the February 18, 1994, industry briefing included a lengthy and detailed discussion of the process. Industry had to option of using the cooperative agreement or a more traditional contract approach. The advantages of the cooperative agreement were too good to overlook, however. According to the briefing, some of the advantages were no statement of work, no "best and final offer," interaction between NASA and industry prior to proposal submission was permitted, and a total proposal page count of 25 pages. Industry would be expected to contribute resources, such as in-kind goods and cash, as well as IRAD.

As a result of the issuance of the two NRAs, NASA awarded six cooperative agreements with industry (McDonnell Douglas and Rockwell) in June and July of 1994. McDonnell Douglas and Rockwell worked in conjunction with NASA laboratories, such as the Marshal Space Flight Center and the Ames Research Center, as part of the cooperative arrangements. Ultimately, from the work conducted under these cooperative agreements, including a cooperative agreement for the integration of technologies on the Delta Clipper (with McDonnell Douglas), the upgraded DC-XA emerged.

The 28-month agreement between McDonnell Douglas and Marshall to reconfigure the DC-X included $17.6 million in NASA funding and $7.6 million from McDonnell Douglas. The upgrades that turned the Delta Clipper into the DC-XA included: (1) a switch from an aluminum oxygen tank to a Russian-built aluminum-lithium alloy cryogenic oxygen tank with external insulation; (2) an exchange of the aluminum cryogenic hydrogen tank for a graphite-epoxy composite liquid hydrogen tank with a low-density reinforced internal insulation; (3) a graphite-epoxy composite intertank structure; (4) a graphite-epoxy composite feedline and valve assembly; (5) a gaseous hydrogen and oxygen auxiliary power unit to drive the hydraulic systems; and (6) an auxiliary propulsion system for converting liquid hydrogen into gaseous hydrogen for use by the vehicle's reaction control system.