THE NEW SPACE RACE: NASA’s new chief has radically rewritten the rules for private space stations.

NASA’s previous plan involved issuing a “request for proposals” early next year as part of a competition that would have selected one or, at most, two companies to move forward into assembly and certification of their stations prior to flight. However, according to Duffy’s directive, there is up to a $4 billion shortfall in the budget NASA was expected to receive, and what would be needed for this program. The president’s budget request included $272.3 million in fiscal year 2026 and $2.1 billion over the next five years for the development and deployment of new commercial space stations.

Because of this plan’s perceived shortcomings, with the new directive, NASA is making some substantial changes to the Commercial Low Earth Orbit Destinations Program moving forward:

Instead of moving forward in Phase 2 with a firm, fixed-price contract for certification and services, NASA will extend the current program of Space Act Agreements awarded to “multiple” participants.

There will be a “full and open” competition for interested companies to receive Space Act Agreements. NASA will award a minimum of two and preferably three providers within six months of the formal announcement of a proposal.

NASA will shift the formal design, acceptance, and certification from this Space Act Agreement phase to a follow-on certification phase (so companies cannot get certified until after they fly).

At least 25 percent of milestone funding will be withheld until after a successful in-space crewed demonstration of a space station.

There is a new minimum capability NASA seeks, which is significantly less than the original “full operational capability” the agency sought. Now, the minimum required capability will be “4 crew for 1-month increments.”

Some of these are rather big changes. The ongoing reliance on Space Act Agreements, for example, will allow companies more leeway in how they design their stations. Had the agency moved into a more structured contract, known as Federal Acquisition Regulations, NASA could have levied more specific requirements on the companies.

This approach of lowering the minimum capabilities will also give companies a better chance to develop operational space stations by 2030, when the International Space Station is expected to be deorbited.

Smart.