WITNESSES EXPRESS
STRONG SUPPORT FOR AEROSPACE PRIZES
$10 Million X-Prize Cited as Success
Model
WASHINGTON, D.C., July 15, 2004 A panel
of expert witnesses, including the Chairman of the X-Prize
Foundation and a former Science Committee Chairman,
today urged Congress to authorize contests and inducement
prizes to spur innovation and advance space exploration.
Testifying before the Subcommittee on Space and Aeronautics,
the witnesses told the panel that a substantial prize
offering could help develop the necessary technology
to fully implement the Presidents Space Exploration
Vision. Citing the success of the X-Prize, which was
the catalyst for the first privately financed flight
into space, the witnesses said prizes could help spur
innovative ideas and technologies.
Subcommittee Chairman Dana Rohrabacher (R-CA)
said, I was particularly pleased that the Aldridge
Commission recommended prizes as a significant means
for increasing the private sectors involvement
in space exploration. The good efforts of the Commission
and the X-Prize have given us the historic opportunity
to do space smarter. Rohrabacher continued,
[L]ast month Burt Rutans hybrid spacecraft
design successfully achieved suborbital flight and safely
returned a human to Earth. In performing this monumental
task he demonstrated that space travel is no longer
the sole domain of government. This is a compelling
example that a revamped national space program, fueled
by inspired market-based creativity and innovation,
holds the promise of America exploring space.
While establishment of a NASA prize program is
certainly worth considering, we should not be lulled
into thinking that it is any substitute for providing
adequate funding for NASAs R&D programs,
cautioned Subcommittee Ranking Minority Member Nick
Lampson (D-TX).
The Presidents Commission on Implementation of
United States Exploration Policy (also known as the
Aldridge Commission) recommended that NASA offer inducement
prizes of up to $1 billion to aid the implementation
of the Presidents Space Exploration Vision. NASA
Associate Administrator for Exploration Systems, Rear
Admiral Craig Steidle, USN (Ret.) discussed the agencys
proposed Centennial Challenges program, which would
establish prize contests for the design and development
of new innovative technologies. NASA is seeking Congressional
authorization of $50 million annually for the program
and hopes to offer prizes of up to $10 million.
Admiral Steidle told the Subcommittee that NASA is
exploring prize competitions for: full missions; key
technologies; leveraging partnership opportunities;
and educational enrichment. By specifying technical
goals, but not pre-selecting the best way to achieve
them, a large number of approaches to a problem will
be developed, including unorthodox approaches that would
likely not be pursued in a traditional procurement,
he said. Centennial Challenge winners will be
judged and earn awards based on actual achievements,
not proposals. Using this approach, we hope to reach
new innovators who would not normally work on NASA issues
and find novel or low-cost solutions to NASA engineering
problems that would not be developed otherwise.
I would suggest that the reason you want to do
prizes is because you will get people involved to win
prizes who would never dream of pursuing a government
contract, said the Honorable Robert Walker
(R-PA), a former Science Committee Chairman and
former member of the Aldridge Commission. What
you will do is encourage people to take risks that they
might find unacceptable if there wasnt a prize
out there, and certainly take some risks that the government,
inside of its regular institutions, would probably find
unacceptable. So what youll end up with, with
prizes, is people willing to do things that are outside
the box. You wont necessarily have RFPs (requests
for proposals), or specs you will have a goal
and there will be people who will take that desire to
pursue that goal and extend it in ways that we cant
even imagine.
Dr. Peter Diamandis, Chairman of the X-Prize Foundation
testified on the success of the X-Prize contest, which
promises $10 million to the first team to build a privately
financed spaceship and fly the weight of three people
to space (defined as 100 kilometers altitude) two times
in as many weeks. The results of this competition
have been nothing short of miraculous, he said.
For the promise of $10 million, more than $50
million has been spent in research, development and
testing. And where we might normally have expected one
or two paper designs resulting from a typical government
procurement, were seeing dozens of real vehicles,
motors and systems being built and tested. Dr.
Diamandis applauded NASAs proposed Centennial
Challenges program saying, Entrepreneurs will
solve the problems that large bureaucracies cannot.
Prizes offer NASA and the U.S. government both fixed-cost
science and fixed-cost engineering. More importantly,
they offer NASA the passion and dedication of the entrepreneurial
mind that cannot be purchased at any price.
Dr. Molly Macauley, an economist and senior fellow
with Resources for the Future, testified that prizes
could provide tremendous benefit, even when the ultimate
goal is not attained. Even if an offered prize
is never awarded because competitors fail all attempts
to win, the outcome can shed light on the state of the
technology maturation. In particular, an unawarded prize
can signal that even the best technological efforts
arent quite ripe at the proffered level of monetary
reward. Such a result is important information for government
when pursuing new technology subject to a limited budget,
she said.
Dr. Douglas Holtz-Eakin, Director of the Congressional
Budget Office, cautioned that to be successful a contests
rules and structure must be clear and adhered to. Unclear
or unenforceable rules are an invitation to conflict,
and the government will bear a cost of adjudication
when disputes arise, he told the panel. Rules
governing entry and elimination, if the contest has
phases, are also important. Dr. Holtz-Eakin also
said that competitors must have confidence that a promised
prize payment will actually be offered. Such confidence,
he said, may waver if the prize payments stretch over
several years and represent a significant share of the
agencys budget. Funds appropriated for a
payment that is in the future but have yet to be obligated
can be rescinded or otherwise limited by subsequent
legislative action, especially if federal policies toward
the programs objectives change. To ensure
the confidence of competitors he suggested that the
agency could purchase an insurance policy or place the
prize funds in a private escrow account.
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