The Orbital Sciences Corporation Antares rocket, with the Cygnus spacecraft onboard suffers a catastrophic anomaly moments after launch from the Mid-Atlantic Regional Spaceport Pad 0A, Tuesday, Oct. 28, 2014, at NASA's Wallops Flight Facility in Virginia.
The Orbital Sciences Corporation Antares rocket, with the Cygnus spacecraft onboard suffers a catastrophic anomaly moments after launch from the Mid-Atlantic Regional Spaceport Pad 0A, Tuesday, Oct. 28, 2014, at NASA's Wallops Flight Facility in Virginia. - 
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An unmanned rocket that was supposed to ferry supplies to the International Space Station exploded just after liftoff Tuesday. That has drawn attention to NASA’s growing reliance on private space companies to do its legwork.

In 2008, NASA was preparing to retire the space shuttle. So it hired two private companies to resupply the space station: Orbital Sciences Corp., whose rocket just exploded, and Space Exploration Technologies (also known as SpaceX).

The initial price tag was $3.5 billion. The idea was to both to achieve the space agency’s goals at a lower cost to taxpayers, and to help foster the growth of the commercial space industry.

To do that, NASA wasn’t buying a new space shuttle.

“What they actually bought was cargo delivery services, just like you would buy services on Fed Ex or something like that,” says Frank Slazer, vice president for space systems at the Aerospace Industries Association.

Tuesday’s explosion may prompt concern over the increasing privatization of space. But industry watchers are quick to remind that NASA has always relied on the private sector.

“NASA’s never built a rocket,” says John Logsdon, who founded the Space Policy Institute at the George Washington University. “Rockets that NASA and the Air Force use have always been built by private companies.”

He doesn’t think the explosion says anything profound about this model of business.

“What it says is launching things into space is hard. And there will be unfortunately failures along the way,” he says.

The stakes are going to rise, though.

NASA recently hired Boeing and SpaceX to ferry astronauts to the space station in a few years. (Of course Boeing, and its heritage units, played an integral role in building the Apollo spacecraft.)

Meanwhile, the commercial space industry has grown globally. It’s now worth about $225 billion, according to Carissa Christensen, managing partner of the Tauri Group. That figure includes commercial satellite launches and operation.

“Putting that in context,” she says, “the total amount that governments spend globally is about $75 billion.”

NASA is getting ready to spend more. It’s now in the process of awarding the next round of cargo contracts.