Definition
The Commercial Orbital Transportation Services (COTS) program was a NASA initiative (est. 2006) to coordinate the delivery of crew and cargo to the International Space Station (ISS) by private companies.
Why It Matters
It proved that the government can accelerate innovation more effectively by buying services from competing startups than by building everything itself.
Core Concepts
- The $278M Award: SpaceX was selected in August 2006 as a winner, providing the capital to develop Falcon 9 and the Dragon spacecraft.
- Milestone-Based Payments: Funding was not given upfront but paid out as the company hit specific technical milestones (e.g., successful engine tests, design reviews).
- Institutional Endorsement: For SpaceX, the win was a “seal of approval” from NASA, despite the Flight One failure in March 2006.
- SpaceX vs. Kistler: Originally, NASA intended to give the funding to Kistler Aerospace without competition, but a protest by Musk forced a fair bidding process.