NASA is embarking on a bold new strategy to spur new private investment in spaceflight technology. If the effort succeeds, it could transform both the agency and the U.S. aerospace industry, but first there is the matter of congressional authority to overcome.

On Nov. 15, one day before the successful last flight in the now-dead X-43 project, NASA officials held a meeting at headquarters in Washington to promote a new agency-sponsored prize program inspired by the Ansari X Prize for private spaceflight.

Under the agency’s old way of doing business, officials decided what they wanted built, asked private companies to bid on building it, then awarded a contract to the lowest acceptable bidder — who often was located in an important Congressional district. Then, whether the project succeeded or not, NASA would pay out monies to the winning bidder, based on that bidder’s predicted construction cost.

For example, Lockheed Martin won the billion-dollar-plus contract to build the X-33 in 1996 on the basis of its radical engineering concept. The company then attempted to build it, pocketing $1.2 billion in fees. When the program was canceled due to engineering problems with the X-33’s composite fuel tanks, no one expected Lockheed to give the money back.

The Centennial Challenge Awards would follow a new paradigm, following the X Prize mode and hoping to repeat the success of SpaceShipOne, the winner of the $10 million purse and the first privately funded craft to carry a human occupant in a sub-orbital spaceflight.

“Winners will be determined by actual achievements, not proposals,” said Brant Sponberg, NASA’s award program manager at the Nov. 15 meeting as he outlined NASA’s initial roadmap for the program.

Sponberg explained to an audience of private commercial space developers — including Peter Diamandis of the X Prize Foundation and David Gump of t/Space — prize competitors will have to produce some results first before NASA will fork out any cash.

Though NASA does not expect to finalize the details of its program until early next year, officials said they hope to offer three prize categories, with awards running from $250,000 to $50 million.

The priciest category, called the Flagship Awards, would range from $10 to $50 million with one or two prizes given out each year. Specific contests will include achieving a robotic soft landing on the moon, using a solar sail to maneuver in space or developing a small unmanned returnable capsule for bringing materials and experiments back from the International Space Station.

The next-smaller category, dubbed the Keystone Awards, would run from $250,000 to $5 million, with three to five presented per year. NASA would give Keystone Awards for overcoming a variety of smaller technological challenges, such as developing a better spacesuit glove, a better lunar rover or better radiation shielding.

The smallest category, called Quest Challenges, would award students up a $1 million for projects in a wide range, from building model rockets to writing science fiction.

In all the categories, NASA intends to offer two types of contests. The first would be what the agency labels “first-to-demonstrate.” The awards would be similar to the Ansari X Prize, won by anyone who is first to achieve a specific goal. The second, dubbed “repeatable contests,” often would be annual competitions to achieve incremental improvements in specific technologies.

NASA also is considering allowing private organizations to sponsor some prizes, as happened when the Ansari family became the prime donor to the X Prize and had their name added to the moniker. In other cases, NASA is weighing the idea of ceding the task of running contests to those private companies experienced in doing so, thereby reducing administrative costs.

If NASA actually can get the prize program started, it could mean no more dead-end projects such as the X-33 and X-43. Instead, NASA will offer an award, watch as private companies to develop the technology on their own, then — even if NASA decides not to use the technology — allow the award-winner to retain ownership and even sell it on the open market.

Moreover, these prizes could be small potatoes compared to some suggestions. Last June, the President’s Commission on the Implementation of United States Space Exploration Policy not only supported NASA’s Centennial Challenge Awards, the commission even suggested prizes on a far larger scale.

“As an example of a particularly challenging prize concept,” the commission wrote, “$100 million to $1 billion could be offered to the first organization to place humans on the moon and sustain them for a fixed period before they return to Earth.”

Such a billion-dollar prize — sort of a super X Prize — would no doubt energize and reshape the American space launch industry in ways no one today can predict.

The only problem with all these plans, however, is NASA lacks the authority to award almost anything. Though Congress already has authorized $12 million for the CCA program and even stated it wants NASA to get the program going quickly, legislators so far have failed to increase NASA’s authority to award large prizes. At this moment the largest prize that NASA can legally hand out is only $250,000.

Worse, the legal and bureaucratic hurdles for NASA to offer an award for a human spaceflight, comparable to the X Prize, are formidable.

“When you talk about humans it involves other obstacles,” Sponberg told United Press International. “We’ve got to coordinate with (NASA’s) Office of Mission Safety Assurance, with the office of the Chief Medical Officer, and this also involves the (Federal Aviation Administration).”

He added, “We don’t yet know whether we will be able to pursue a human mission or not.”

Here, too, Congress has made no effort to grease the wheels and make it easier for NASA to encourage private human space travel. NASA officials have spent innumerable hours over the last few months lobbying Congress for some increased authority and have gotten nothing.

In fact, the only bills pending in Congress specifically limit NASA from awarding any prize larger than $1 million. Yet Sponberg still thinks the program can get off the ground.

“The hope is that when the 109th Congress comes into session next year we’ll see progress on this front,” he said.

Unfortunately, Congress seems to be taking a completely opposite tack. The Commercial Space Launch Amendments Act of 2004 — which passed the House last week and is expected to pass the Senate when it reconvenes next week — actually tightens safety restrictions on any future private competitions like the X Prize.