Robert Bigelow, who owns Budget Suites of America, formally announced the long-rumored prize just a day after the first privately funded spaceship rocketed out of the atmosphere and won the $10 million Ansari X Prize, which was designed to spur commercial spaceflight.
Bigelow acknowledged that reaching orbit would be much harder than briefly popping into space as SpaceShipOne did.
"To be honest, I think it's a long shot," he said of any team's chances of winning the prize by 2010 as required.
Faster and higher
SpaceShipOne, built by aircraft designer Burt Rutan and financier Paul Allen, had to travel at about three times the speed of sound in order to reach the 62-mile altitude required to win the Ansari X Prize.
An orbital spacecraft has to travel six times faster and four times higher, and, like NASA's space shuttle, also requires more extensive heat shielding.
Even so, Bigelow said, a commercial orbital spacecraft is "something the United States very badly needs."
Bigelow's space station company, Bigelow Aerospace, also needs it. With the space shuttle off-limits to paying passengers and the Russian Space Agency charging $20 million per seat on its Soyuz ships, a commercial craft could provide the only affordable way for the company to reach orbit."