This is the seventh of a continuing series of historical fact sheets on the origins of NASA's X-33 program. The X-33 is a technology demonstrator for NASA's "next generation" of space launch vehicle. It will flight test a range of technologies needed for single-stage-to-orbit reusable launch vehicles, such as a metallic thermal protection system and the aerospike engine. Currently, there is no announced schedule of test flights. Eventually, based on the X-33 experience shared with NASA, Lockheed Martin hopes to build a commercial single-stage-to-orbit reusable launch vehicle, called VentureStar. In the future, rather than operate space transport systems as it has with the Space Shuttle, NASA has proposed purchasing launch services from commercial launch providers.

The decision to design and build the X-33 grew out of a NASA study called Access to Space. Previous fact sheets have dealt with the Access to Space study and its conclusions, the emergence of a tentative NASA program to build an experimental advanced technology demonstrator flight vehicle, the X-2000, public and Congressional support for a single-stage-to-orbit spaceship, and the funding difficulties of the country's only single-stage-to-orbit vehicle program, the DC-X, as well as the conversion of the DC-X into a NASA technology testbed vehicle, the DC-XA.

This fact sheet traces the early history of NASA's X-34 program. In addition to acquiring the DC-X from the Pentagon as an experimental vehicle, NASA commissioned the creation of two new experimental (or "X") vehicles, known popularly as the X-33 and the X-34. The X-34, like the X-33, was a showcase for NASA's "new ways of doing business," especially the cooperative agreement.

Unlike the DC-XA, the X-34 and X-33 were built originally for NASA's RLV Program. The X-34 would demonstrate reusable multiple-stage technologies for small payloads, while the X-33 would test reusable single-stage-to-orbit technologies capable of provisioning the Space Station. From the start, the X-34 program, known also as the Reusable Small Booster Program, would be made to serve two objectives: commercial launch needs and technology development. Attempting to satisfy both objectives with the same vehicle ultimately led to the program's demise. Among the reusable launcher technologies to be demonstrated were autonomous ascent, reentry, and landing; composite structures; reusable liquid oxygen tanks; rapid vehicle turnaround; and a durable thermal protection system. The business objective was to stimulate development of a reusable launcher for smaller payloads through an industry-led partnership between NASA and industry lasting 30 to 36 months and having a fixed government budget.

Prior to the creation of the X-34 program, NASA already had been interested in developing boosters, or in converting surplus missiles, for carrying smaller payloads. With the end of the Cold War, American defensive missiles, such as the Minuteman, were deemed to be no longer necessary for the nation's defense. This availability of excess missiles led NASA in 1993 to propose their use to lift small payloads. Universities Space Research Association (USRA) submitted a proposal to NASA's Office of Space Science (OSS) that would use Minuteman and other ballistic missiles to conduct a pilot program to demonstrate low-cost, short duration, small scientific satellite missions in support of university-based research and technology development. Speaking before NASA and Congress, Orbital Sciences Corporation, which was developing small launchers for the commercial market, opposed the dumping of strategic missiles on the market, because that action would have a dramatically negative impact on domestic manufacturers of small launch vehicles.

Also in 1993, NASA's Marshall Space Flight Center, in conjunction with Headquarters, conducted the Low Cost Launch Vehicles Study. The study assessed alternatives for reducing the cost of launching small payloads in low earth orbit, namely, 500 pounds in orbit at a cost of $5 million or less. NASA looked at 77 U.S. orbital launchers, 13 U.S. sounding rockets, and 43 foreign launchers, including excess military missiles. The Low Cost Launch Vehicles Study concluded that using surplus Pentagon missiles would be a very attractive option for NASA, while placing payloads on foreign launchers would have "a serious negative impact" on the international competitiveness of the U.S. launcher industry.

If NASA only wanted to lower the cost of launching small payloads, the study recommended, then the space agency should continue to procure launch services from both commercial providers and companies offering to use leftover rockets. As for promoting technological development, the Low Cost Launch Vehicles Study foresaw no technology that "would enable drastic reduction in the costs for current launchers." NASA, the study advised, should foster the development of cheaper launchers by purchasing launch services and by supporting "joint venture" activities in which a company and NASA would share in providing the resources required to develop a specific launch system.

The idea of a "joint venture" between a company and NASA to jointly provide the resources required to develop a specific launch system soon became embodied in the X-34 program, also known as the Reusable Small Booster Program. The first public detailed description of the X-34 program issued during the industry briefing on October 19, 1994. The objective of the program was to stimulate the development of a reusable commercial launch vehicle for smaller payloads being placed in low orbit, and to demonstrate that an industry-led partnership between NASA and industry could accomplish this objective in 30 to 36 months within a fixed government budget. >From the start, the X-34 would be made to serve two masters. It would be both a commercial launcher, available for commercial payloads by 1998, and a technology demonstrator. Among the reusable launcher technologies to be demonstrated were autonomous ascent, reentry, and landing, composite structures, reusable liquid oxygen tanks, rapid vehicle turnaround, and a durable thermal protection system.

The X-34 program procurement instrument would be a cooperative agreement. At the October 19, 1994, industry briefing, NASA Marshall Space Flight Center procurement officer Mark Stiles explained the cooperative agreement and how NASA would make use of if with for-profit entities. NASA would pay industry according to a schedule of milestones, and the share contributed by the space agency would be fixed. Industry would have to share program costs with NASA, with industry's share coming in the form of cash and IR&D. Industry's share was set at 50 percent. In the case of cost overruns, industry would have to make up the difference. Moreover, the cooperative agreement did not permit industry to make a profit from the venture.

NASA issued a draft version of the X-34 Cooperative Agreement Notice and requested industry comments by November 2, 1994, then on January 12, 1995, the space agency released the final Cooperative Agreement Notice (CAN 8-2) for the X-34 program. Some of the industry comments in response to the draft Cooperative Agreement Notice indicated industry concerns and fears about the nature of the NASA-industry relationship.

For example, bidders wanted to know what recourse industry had if NASA failed to meet a milestone deadline. In response, NASA provided recourse to an appeals process. Bidders also wanted to know if proposals using numerous NASA personnel would be favored. The amount of government participation, NASA responded, was not an evaluation factor; however, effective use of NASA expertise and facilities was an intent of the Cooperative Agreement Notice. Bidders also asked: Would promises of greater cost sharing sway NASA in evaluating proposals? What if NASA backs out of the program? The final version of Cooperative Agreement Notice 8-2 addressed these and many other bidder questions.

The extent of NASA-industry cooperation in the X-34 program, as it would be in the X-33 program, was more far-reaching than in traditional procurement arrangements. Usually, a contractor relies solely on the personnel and resources available within the firm and from affiliated subcontractors. Under the X-34 cooperative agreement, industry would negotiate with NASA centers for the use of NASA personnel and facilities prior to submission of any proposal, and industry would pay for the use of those facilities (but not for the labor of civil service employees) out of the program's resources. Also, the cooperative agreement was different in that NASA expected industry to contribute to the program's costs. Proposed cost sharing could be in the form of cash or IR&D money.

NASA set a deadline of February 24, 1995, for industry to submit X-34 proposals, and announced its selection of a winner on March 8, 1995. NASA and Orbital Sciences Corporation signed the cooperative agreement on March 30, 1995. The X-34 program moved rapidly. From release of the Cooperative Agreement Notice to the deadline for proposal submission was less than a month and a half, and NASA announced its selection only twelve days later. The entire process from release of the Cooperative Agreement Notice to announcement of the winning bid was only two months.

In order to carry out the terms of the cooperative agreement, Orbital Sciences and Rockwell International formed a jointly owned firm called American Space Lines (ASL) to develop, operate, and market the X-34. Orbital owned a few more shares of ASL than Rockwell. The two companies invested $100 million ($50 million each) in the project. NASA contributed $70 million plus personnel and facilities at five NASA centers (Marshall, Langley, Dryden, Ames, and Johnson). The ASL vision of the X-34 was a commercial vehicle that would deliver satellites weighing up to 2,500 pounds (1,134 kg) to orbit. The ASL commercial X-34 consisted of three stages: a large B-747 aircraft, a fully reusable rocket-powered booster, and a small expendable orbital vehicle.

That the X-34 program was leading to the creation of a commercial launch vehicle was touted by American Space Lines' investors (Orbital Sciences and Rockwell) and by the press. The media labeled the X-34 program an "acid test for space commerce" and "a commercial venture that will capture the lion's share of the small satellite launch market next century." The X-34 was still, as NASA had intended, a technology demonstration project. However, that objective became lost in the ballyhoo.

As design of the X-34 progressed, the most major and thorniest issue that arose was the selection of an appropriate rocket engine. The X-34 was on a tight schedule, and the vehicle design had to be fixed by late November or early December of 1995, that is, no more than nine months after signing the cooperative agreement with NASA. Two main candidate engines emerged. One was the RS-27 built by the Rocketdyne Division of Rockwell International in Canoga Park, California. McDonnell Douglas used the RS-27 for the first stage of its Delta rocket. The other candidate engine was the RD-120 built by NPO Energomash of Khimky, Russia. The RD-120 powered the second stage of the Zenit rocket. Selection of the Russian engine would be good news for Pratt & Whitney of West Palm Beach, Florida, which had been trying to sell Energomash engines in the United States since October 1992, when the two companies signed a marketing agreement. The RD-120 engines, however, would be built in Russia.

The engine was the most critical of all the X-34's component systems, if the vehicle were to achieve any commercial success. Having a powerful engine was critical if the commercial version could not place payloads in orbit. A less powerful engine might be able to place payloads in orbit, but only the lightest of payloads, so that much of the commercial market (and ultimately the profitability of the venture) would be lost. Also, with a less powerful engine, the per-launch cost increased, and the overall vehicle mass grew. If the X-34's weight grew too much, the B-737 would not be able to carry the X-34. Commercial considerations favored selection of the more powerful RD-120 engine, which tests had shown to be the more powerful of the two engines. In addition, using the RS-27 engine reportedly would add two months to X-34 development time, according to an Orbital Sciences official. However, Rockwell insisted on using the RS-27. The Delta program was winding down, and, as one NASA official pointed out, the cost of the RS-27, in effect, paid back Rockwell for its investment in the project.

As Orbital Sciences, Rockwell, and NASA continued to disagree on the best engine for the X-34, on September 29, 1995, NASA Administrator Daniel Goldin issued five policy guidelines on the use of foreign technology in the Reusable Launch Vehicle Program. The National Space Transportation Policy allowed the government to use foreign components and technologies in developing launch vehicles, provided they were not inconsistent with nonproliferation, national security, or foreign policy goals and did not thwart the commercial sector. Of the five guidelines, two appeared more pertinent than the others to the X-34 engine discussions. These guidelines directed that the use of foreign technology would "not threaten the successful execution of the program, both in its developmental and operational phases," and that "federal funds may be used for manufacture or acquisition of flight-ready foreign component technology, but may nit be used for foreign-based RLV development of foreign technology, unless specifically exempted by the NASA Administrator."

The issuance of these guidelines would have a decisive impact on the outcome of the X-34 program. The guidelines clearly had a bearing on the possible use of the RD-120 engine. Pratt & Whitney continued to develop the engine in Russia, and in late October 1995, they completed a series of three test firings of the NPO Energomash engine. NASA's John Mansfield, the Associate Administrator responsible for the RLV Program, expressed reservations about using Russian engines from the standpoint of protecting the U.S. industrial base and out of concern that instability in Russia could cut off the supply.

Meanwhile, the inability of Orbital Sciences, Rockwell, and NASA to agree on an engine for the X-34 resulted in industry missing two program milestones, one for determining the vehicle airframe design and one for choosing between two different configuration options. Consequently, on November 2, 1995, the NASA X-34 program managers issued a 14-day suspension notice to Orbital Sciences, shutting down the X-34 program and allowing NASA time to review the program. The suspension notice has the same effect as a stop-work order on a conventional procurement contract. The suspension lasted only one day. Now the White House Office of Science and Technology Policy became involved, as NASA began talking about shutting down the program.

Representatives of Orbital Sciences, Rockwell, and NASA's Office of Space Access and Technology met with NASA Administrator Dan Goldin on Wednesday, December 13, 1995, to continue discussions on the X-34 engine selection. Orbital Sciences and NASA preferred the Russian RD-120 engine for its higher performance, while Rockwell still pushed its Rocketdyne RS-27. The discussions failed to resolve the dispute. Orbital Sciences began to reconsider the entire design of the vehicle. "Eventually," Gary Payton, RLV Program manager explained, "as they looked closer and closer at the business plan for the operational version of the X-34, they began to realize that basically the program wasn't going to be very profitable, no matter which engine they put on it."

In January 1996, Orbital Sciences called for an overhaul of the X-34 effort, leaving Rockwell and NASA uncertain of the program's future. The firm argued that the X-34 was becoming too costly and would not meet its performance requirements, because the size, weight, and cost of the booster had grown. Orbital Sciences now was considering a smaller vehicle, and needed about two months to do additional analysis. In addition, on January 24, 1996, Orbital issued stop work orders to all of its X-34 subcontractors, including Rockwell.

In reaction to Orbital Sciences' stop work orders, and following a vehicle study in cooperation with Orbital Sciences, Rockwell pulled out of the X-34 program. Rockwell and Orbital Sciences had studied a smaller launch vehicle that would meet NASA's technology demonstration requirements, while also addressing the needs of the commercial launch market. The study indicated that the smaller vehicle would not be commercially viable. Rockwell maintained that the engine selection issue had been "fundamentally resolved" and that an American engine could both meet NASA's requirements and be competitive in the launch market. The firm also announced its willingness to accept the Russian RD-120 engine.

Rockwell's withdrawal from the X-34 program brought the project to a rapid end. Ultimately, despite the protracted debate over engine choice, the X-34 could not be both a commercial launcher and a technology demonstrator. By January 1996, when work stopped, NASA, Rockwell, and Orbital Sciences had spent $15 million. NASA spent about $5.5 million of the $70 million earmarked for the program, while Orbital Sciences lost $3 million of its own money in just the last quarter of 1995.

NASA now sought ways to accomplish its technology demonstration objectives with a smaller project, but at no increased government cost using the remaining federal dollars, and without the commercial part of the project concept.

NASA let the contract out to bid again on March 27, 1996, as NASA Research Announcement (NRA 8-14). On June 10, 1996, out of nine bidders (Lockheed Martin Skunk Works, McDonnell Douglas, Northrop Grumman, Rockwell International, du Pont Aerospace, Pioneer Rocket Plane, Space Access, and Truax Engineering), NASA selected Orbital Sciences to build the new X-34. NASA and Orbital Sciences signed the new X-34 contract on August 28, 1996. This time, though, NASA and industry chose to pursue the X-34 without a cooperative agreement.

Fact Sheet #8, scheduled to be available December 15, 2000, will deal with the X-33 program. Specifically, it will discuss Phase I of the X-33 program, and it will focus on, among other topics, the creation of the program both as a bold, leap-frog effort to develop reusable single-stage-to-orbit technologies and as an unprecedented (for NASA) experiment in fast-track program management.