CAPE CANAVERAL, Fla. — Space Exploration Technologies, the startup rocket company developing cut-rate launch services, is expanding its Florida base, with additional hangars to prepare its Falcon 9 rockets and customer payloads for flight.

The firm, owned and operated by Internet entrepreneur Elon Musk, has more than 40 flights worth about $3.5 billion on its manifest from the U.S. government, commercial and international customers.

About 40 percent of that business is for NASA, which has hired the company, also known as SpaceX, to fly cargo to the International Space Station beginning next year. A demonstration flight is scheduled for launch in January.

Falcon 9s fly from Cape Canaveral Air Force Station’s Space Launch Complex 40, which previously was used by the now-retired Titan rocket program. Currently, only one vehicle can be processed at a time at a hangar adjacent to the launch pad.

To accommodate an expected flight rate of 10 to 12 launches per year, SpaceX is building a 16,000-square-meter addition to Space Launch Complex 40 and taking over an old Delta 2 processing building called Hangar AO. Space Florida, a state-funded agency focused on expanding space-related business in Florida, is providing $7.3 million toward the upgrades.

“We’ll be able to integrate three rockets at a time instead of one,” Scott Henderson, SpaceX’s director of mission assurance, said at the Armed Forces Communications and Electronics Association conference in Cocoa Beach earlier this month.

The upgrade includes a clean room, a hazardous hypergolic fueling facility and enough volume to encapsulate a payload in a fairing in a vertical position.

The company also plans to either upgrade Pad 40 or add another launch pad to support its planned Falcon Heavy rockets. That would be in addition to the West Coast Falcon Heavy launch complex under construction at Vandenberg Air Force Base.

“We can do it on Launch Complex 40; technically it’s not a challenge. The problem is how you do that while not breaking up your revenue stream as you’re launching Falcon 9, so you’ve got a challenge there,” Henderson said.

The company, which is based in Hawthorne, Calif., currently has about 1,600 employees, including about 70 in Florida.

“We will never, as a small, commercial, lean, agile company, win the job-creation battle,” Henderson said, referring to the political push for companies to replace jobs lost by the retirement of NASA’s space shuttles.

“It doesn’t really match the commercial model. What we’re really trying to do is increase launch rate, because if you increase launch rate you bring in new customers to Florida, they bring in suppliers, bring in people to watch launches, and all boats lift on the rising tide,” he said.

SpaceX faces what likely will be a keen competition for NASA funds to continue work on a passenger version of its Dragon capsule. A cargo Dragon made its debut flight in December 2010 and is targeted for a second demonstration flight, including possibly berthing at the space station, Jan. 7.

SpaceX currently shares a pool of $316.2 million in NASA funds with Boeing, Sierra Nevada Corp. and Blue Origin for space taxi development and work on related technologies. The White House had requested $850 million for 2012. Congress budged $406 million.

NASA has not yet announced how the cut would impact the number of contractors, the scope of the work or the timing for the next phase of the program. A solicitation was expected to be released before the end of the year.

This article was provided by Space News, dedicated to covering all aspects of the space industry.