In 2006, SpaceX won a NASA Commercial Orbital Transportation Services (COTS) Phase 1 contract to show that the company can take cargo to the ISS; The contract had a possible option for crew flight. This contract was designed by NASA to provide "seed money" through Space Act Agreements for developing new space opportunities. NASA paid SpaceX $396 million to work on the cargo configuration of the Dragon spacecraft. SpaceX spent more than $500 million to develop the Falcon 9 launch vehicle. These Space Act Agreements have saved NASA millions of dollars in development costs, making rocket development ~4-10 times cheaper than if produced by NASA alone.
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