It was to accommodate a wide range of missions, including payload delivery to low Earth orbit (LEO), payload delivery to high-energy orbits with a K-1 Active Dispenser, technology demonstration flights, microgravity missions, and commercial cargo resupply, recovery, and reboost services for the International Space Station (ISS).

The Government Accountability Office (GAO) sided with SpaceX and NASA suspended the contract in favor of a new process, the Commercial Orbital Transportation Services (COTS) program.

Both SpaceX and the new Rocketplane Kistler won COTS contracts in August 2006, but after failing to meet several financial milestones, NASA announced in October 2007 that it was terminating funding for the project.

[1] Moments before impact, airbags would inflate, bringing the stage to a soft landing from which it could be recovered and reused up to 100 times.

[7] Major partners/subcontractors included:[1] In October 2007 Rocketplane Kistler, the company that was building the K-1, lost its contract with NASA for the COTS program over failure to meet funding targets.