Two of the guys have federal explosives licenses and so they can build pretty much whatever they want. Although in this case since the propellant is not a high explosive, I don't think any license was required.
You do have to get clearance from the FAA to fly over 10,000 feet, but the beer keg rocket didn't go that high. I think it was somewhere around 6,000 feet.
Code://try //{ if (a) do { f( b); } while(1); else do { f(!b); } while(1); //}