section_path: Development history/Conception and funding
section_name: Conception and funding
paragraph_text: Conception and funding
  
  In October 2005, SpaceX announced plans to launch Falcon 9 in the first half of 2007. The initial launch would not occur until 2010.
  
  SpaceX spent its own capital to develop and fly its previous launcher, Falcon 1, with no pre-arranged sales of launch services. SpaceX developed Falcon 9 with private capital as well, but did have pre-arranged commitments by NASA to purchase several operational flights once specific capabilities were demonstrated. Milestone-specific payments were provided under the Commercial Orbital Transportation Services (COTS) program in 2006. The NASA contract was structured as a Space Act Agreement (SAA) "to develop and demonstrate commercial orbital transportation service", including the purchase of three demonstration flights. The overall contract award was US$278 million to provide three demonstration launches of Falcon 9 with the SpaceX Dragon cargo spacecraft. Additional milestones were added later, raising the total contract value to US$396 million.
  
  In 2008, SpaceX won a Commercial Resupply Services (CRS) contract in NASA 's Commercial Orbital Transportation Services (COTS) program to deliver cargo to ISS using Falcon 9/Dragon. Funds would be disbursed only after the demonstration missions were successfully and thoroughly completed. The contract totaled US$1.6 billion for a minimum of 12 missions to ferry supplies to and from the ISS.
  
  In 2011, SpaceX estimated that Falcon 9 v1.0 development costs were approximately US$300 million. NASA estimated development costs of US$3.6 billion had a traditional cost-plus contract approach been used. A 2011 NASA report "estimated that it would have cost the agency about US$4 billion to develop a rocket like the Falcon 9 booster based upon NASA's traditional contracting processes" while "a more commercial development" approach might have allowed the agency to pay only US$1.7 billion".
  
  In 2014, SpaceX released combined development costs for Falcon 9 and Dragon. NASA provided US$396 million, while SpaceX provided over US$450 million.
  
  Congressional testimony by SpaceX in 2017 suggested that the unusual NASA process of "setting only a high-level requirement for cargo transport to the space station leaving the details to industry" had allowed SpaceX to complete the task at a substantially lower cost. "According to NASA's own independently verified numbers, SpaceX's development costs of both the Falcon 1 and Falcon 9 rockets were estimated at approximately $390 million in total."