NASA announced it fired Rocketplane Kistler from its COTS Project, which provides milestone-based money to develop and demonstrate commercial orbital transportation services. NASA seeks a spaceship that could open new markets and pave the way for private companies to launch and deliver cargo to the International Space Station.

"RPK failed to meet its financial milestone," which included raising $500 million in private funding, announced Alan Lindenmoyer, manager of NASA's Commercial Orbital Transportation Services (COTS). "We've come to the conclusion that it's in NASA's best interest to reopen the competition." In fact, Rocketplane Kistler missed two recent milestones necessary to maintain COTS funding and was put by NASA on notice a month ago.

As a result, Rocketplane Kistler was forced to stop further development work on its K-1 launch vehicle. They thus lost around $180 million that they could have received. NASA was prepared to award around $207 million in total, of which they already gave Rocketplane around $32 million. The remaining $174.7 million will be apparently offered to aerospace firms in a new competition.

Rocketplane Kistler will reportedly continue its focus on the K-1, while its sister unit Rocketplane Global will work on a suborbital spaceplane, similar to the original Lear-based Rocketplane. Rocketplane Global is set to announce a new space plane design next week at the X Prize Cup in New Mexico, which involves an entirely different suborbital space plane. In fact, because the company had to split to work in parallel on NASA's COTS and the previously announced space plane, it faced delays on both projects.

"I'm very proud of our team. We passed numerous NASA milestones and we're highly rated by NASA," said Rocketplane's chairman and CEO, George French Jr. He did not exclude a possible resubmission, and neither did NASA. "Through August of this year, we received glowing reviews from NASA on the technical progress we are making on the K-1 vehicle, including cargo modules being developed specially for NASA. On the financial side, I believe we received more commitments from private investors to finance the K-1 program than any purely commercial space venture to date."

The other company in the COTS race, Space Exploration Technologies Corp., or SpaceX, of El Segundo, Calif., has met all of its financial and technical milestones, NASA announced at the press conference. "A vibrant commercial space industry will help NASA fulfill its promise to support the International Space Station, retire the space shuttle and return humans to the moon," Lindenmoyer said.

NASA essentially wanted to develop the Commercial Orbital Transportation Services because there will be a five-year gap between the planned retirement of its space shuttle in 2010 and the new generation shuttle's successor, the Orion, which should take flight in 2015 and is developed by Lockheed Martin. Thus if a solution could be found before 2010, the Agency would not have to rely entirely on Russian spacecraft for trips to the International Space Station.