Just got off the phone with David Gump, president of Transformational Space Corporation (t/Space), a finalist for NASA’s Commercial Orbital Transportation Services (COTS) program. Gump confirms that t/Space is still in operation despite losing out to SpaceX and Rocketplane Kistler for NASA money to develop commercial spaceships for supplying the International Space Station.

It was t/Space that got the COTS ball rolling by suggesting to NASA that it pay t/Space for meeting milestones on the way toward developing a new spaceship that NASA would hire rather than owning and operating itself.

If t/Space didn’t meet a milestone, NASA could walk away from the deal without losing any more money. If the company succeeded, NASA would end up with a lower-cost spaceship than one built under the traditional cost plus contracts that have resulted in tremendous cost overruns in the past. Which would leave NASA free to spend most of its efforts on its return-to-the-moon mission while continuing to meet its obligations for Space Station.

In exchange for a mere $6 million in NASA study money for coming up with ideas for paper spaceships, t/Space went balls-out and built actual, flying hardware instead to prove the viability its proposal. See my Popular Science article on t/Space for more details.

The same month (June, 2005) that t/Space successfully demonstrated a novel method for air launching spaceships, NASA Administrator Mike Griffin announced that he would seek proposals for building commercial spaceships using the exactly the money-for-milestones scheme proposed by t/Space. No coincidence, I think.

Gump says he and his company have a tougher road ahead of them without development money from NASA but that he intends to compete for contracts to service Space Station after the Space Shuttle retires in 2010. “There are customers in the national security sector who were disappointed that we weren’t one of NASA’s selections and are continuing to want to utilize us,” Gump told me, “and there are commercial customers that we’ve met with and would use us as well.” No deals have been cut yet for development money, though, so stay tuned for specifics.

Meanwhile, t/Space’s booster provider, Air Launch LLC, is making steady progress toward building satellite launchers under Defense Advanced Research Projects Agency (DARPA) and Air Force contracts. Scaled up versions of these launchers will comprise t/Space’s boosters, so t/Space isn’t just stuck in a holding pattern waiting for money to come through–development is continuing.