Last month, just before the space shuttle fleet was grounded once again over safety concerns, NASA awarded two $28 million contracts to produce paper studies for a replacement vehicle.

NASA will pick a winner early next year, handing either Lockheed Martin or a team made up of Boeing and Northrop Grumman a multibillion-dollar contract that will decide the fate of the agency’s manned spaceflight program for decades to come. Or will it?

Even as NASA hunkers down for a wait of a year or longer for a glimpse of new blueprints, it has quietly placed a side bet at a fraction of the cost that could wind up producing a viable shuttle alternative far sooner — an outcome that some hope will permanently ground NASA’s notoriously political and bureaucratic procurement process.

In the last year, with $6 million in NASA funding, Transformational Space, or tSpace, surged ahead with a design for an orbital spaceship called the Crew Transfer Vehicle, or CXV. The company built a full-scale mockup of its four-seat space capsule, successfully demonstrated a novel method for launching spaceships from airplanes, and, this month, dropped another full-scale capsule from a helicopter off the California coast to test parachute deployment and capsule recovery.

That’s grabbing attention at NASA, where millions are normally expended just to create project proposals dressed up with charts in pretty binders. “It’s very rewarding to see tSpace actually do this,” said Michael Lembeck, tSpace’s contracting manager at NASA. “I know how easy it is to throw out a set of viewgraph presentations and claim you’re going to save the world as opposed to actually building something and making it work.”

The job of sending crews to the International Space Station after the shuttle retires for good has until now been relegated to NASA’s big-budget space shuttle replacement, called the Crew Exploration Vehicle, or CEV. But even as the space shuttle, currently NASA’s only spaceship, stays grounded indefinitely, the CEV remains firmly in the realm of paper studies.

Not so for newly empowered private commercial space developers like tSpace and Scaled Composites, whose plans are moving forward at warp speed. TSpace’s design is unlikely to unseat any time soon politically connected contractors like Lockheed, Boeing and Northrop Grumman. But some inside NASA openly hope that tSpace and other freelance companies like it will spark badly needed changes at the beleaguered U.S. space agency, and ultimately create an entirely new R&D model for NASA that cuts off pork-barrel politics in favor of real innovation.

By NASA’s own estimate — made before the latest mishap — the shuttle carries a 1-in-100 chance of catastrophe every time it flies. Each shuttle launch costs $500 million, or about what tSpace estimates it will need to develop an entirely new spaceship.

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