In a decision that left Boeing’s once-mighty but now flailing manned spaceflight business reeling, Lockheed Martin has also thrown the so-called “NewSpace” community (those private ventures started up to dramatically reduce the costs, while increasing the reliability and frequency, of access to space) into a state of confusion, with its announcement a couple weeks ago of plans to investigate rating its Atlas V launcher to transport humans to orbit. To the consternation of some, this was announced in a joint press conference with Bob Bigelow of Bigelow Aerospace, in which he declared his intention to launch a small “space hotel” capable of three people by the end of the decade, with an expansion to nine guests within three years after that. Bigelow has always been considered a member of the new guard, and the move left many scratching their heads.

NASA is no doubt concerned (and some of its personnel perhaps infuriated) about Lockheed Martin’s announcement. They are currently trying to justify the development of a new launch system, partially based on Shuttle hardware, for their new Orion lunar exploration spacecraft, the contract for which was awarded to Lockheed Martin only three weeks ago. Part of the justification for that new launcher was that it would be “safe, simple and soon,” and that the existing expendable launch vehicles available from Lockheed Martin and Boeing would cost too much to “human rate” for the new crew system. Lockheed Martin’s claims are potentially a body blow to this argument. After all, if Lockheed Martin is contemplating doing this with their own money for commercial purposes, it’s hard to imagine that it costs the several billion dollars that it would have to in order to justify spending that amount on a whole new launcher. NASA will no doubt continue to argue that the Atlas doesn’t have the necessary performance for the job, but Atlas performance improvements could probably also be included in the human rating process. NASA administrator Mike Griffin and Associate Administrator Scott Horowitz (whose former employer, ATK, is lined up to build the new vehicle) can’t be pleased.

Why would Lockheed Martin take this action, sure to anger one of its biggest customers, so soon over the Orion award that many viewed as a surprise, when it toppled the expected winner and incumbent human spaceflight contractor, Boeing? One theory is that it is finally starting to take the new commercial space age seriously (something that Boeing, at least so far, seems to continue to fail to do), and are willing to risk NASA’s wrath to take advantage of this new future market. Both they and Boeing had to dramatically increase their prices a few years ago when much of the anticipated market for the the new Atlas and Delta, whose development was heavily subsidized by the Air Force, failed to materialize, and there were too few missions to effectively amortize their fixed operational costs over each flight. So one consideration could be that they hope to increase their flight rate for the vehicle by finding new customers, which could reduce their per-flight costs considerably, providing some margin for future price reductions.

This is possible, but it seems improbable, given the company’s historical aversion to either commercial space or investing its own bottom-line money in space. In order to determine whether or not it’s true, we’ll have to see a lot more than a press announcement over the next few months and years. There was, after all, no commitment to do anything except perform some studies of what might be needed technically, along with some business cases. If they actually start spending their own money to make the needed modifications to the vehicle, then this will look like a more tenable interpretation.

Was it instead a PR move to draw more support from potential users in the NewSpace community? Or a feint to somehow keep Boeing off its game? At this point, those outside the company’s executive suites can only speculate, barring additional data.

Equally, or perhaps even more interesting, is Bigelow’s motivation for this new arrangement. He had been long viewed as an informal partner and supporter of Paypal founder Elon Musk’s new Space Exploration (SpaceX) company, which promises much lower launch costs than any of the existing American providers. He reportedly has contracts in place to use the company’s Falcon launchers, upon achievement of operational capability, to launch his hotel prototypes, and the company planned to develop a crew module as well as part of its recent contract award with NASA under the Commercial Orbital Transportation System (COTS) program, to help provision the International Space Station after the Shuttle is retired in 2010.

But SpaceX’s projected schedule continues to slip. Their first delayed launch attempt of their initial small Falcon 1 vehicle early last spring resulted in a launch failure shortly after leaving the pad in Kwajalein, and the months since have been spent in fixing the problem that caused it, as well as other potential issues. Their next attempt is scheduled for late November. Perhaps Bigelow, a shrewd businessman, is simply hedging his bets. Or he may be spurring competition among his potential providers. Either way, it would seem to indicate at least a reduction, if not a loss, of faith in the ability of SpaceX to deliver on Bigelow’s part.

Some in the NewSpace community have expressed concern that the Lockheed Martin announcement could bode ill for the COTS program, by indicating that the company will have the capability to do the job without the need for NASA to invest in the two contractors. But like Bigelow, Mike Griffin was using the COTS program to hedge his own bets that NASA will be able to develop the new systems planned to get the agency out of low earth orbit, in the hope that a fledgling industry could perhaps pick up that slack, and this announcement would seem to do nothing to change his need to do that–he can’t rely on Lockheed Martin either (particularly when they haven’t yet actually taken any concrete action). For those concerned that this move could put that company in a position to take all the market of the NewSpace industry, this would seem to indicate little faith in that industry. The premise, after all, is that the “mammals” of NewSpace can do it cheaper and better than the old “dinosaurs” of old space. Lockheed is not developing a new vehicle, after all. It is still the expensive Atlas, and any modifications needed to allow it to carry humans can only make it more so. Increasing its flight rate will allow price reductions, but there is a floor on the price set by the marginal costs of throwing an expensive launch vehicle away with every flight (unless Lockheed is willing to operate at a severe loss to grab the market–something that it has never done before). Both SpaceX and Rocketplane Kistler, the two COTS awardees, with partially and fully reusable vehicles, respectively, should in theory have much lower marginal costs than the Atlas, since they don’t throw their vehicles away. If this turns out not to be the case, then the promise of NewSpace was a false one, and they don’t deserve the business anyway.

Either way, the future of human spaceflight just got more interesting in the near term, because regardless of whether Lockheed Martin is serious or not, Bob Bigelow has demonstrated himself to be. He is following the dictum of the movie, Field of Dreams, in the hope and expectation that if he builds it, they will come. With the latest private space adventurer docking to the only existing space hotel, the ISS, just a few hours before his announcement, it’s looking like an increasingly good bet.