NASA awards to space station cargo haulers on hold

CAPE CANAVERAL, Florida Thu Jan 15, 2009 8:36pm EST

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CAPE CANAVERAL, Florida (Reuters) - NASA is suspending contract awards to two firms selected to fly cargo to the International Space Station after a third contender formally protested the outcome of the competition, officials said on Thursday.

PlanetSpace, a Chicago-based partnership set up by three of the U.S. space agency's prime contractors -- Lockheed Martin Corp, Boeing Co and Alliant Techsystems Inc -- filed its protest with the U.S. Government Accountability Office on Wednesday contesting contracts awarded last month.

The contracts worth $3.5 billion went to start-up Space Exploration Technologies of Hawthorne, Calif. and Virginia-based Orbital Sciences Corp. They called for a total of 20 flights to the space station to deliver cargo after the space shuttles are retired in 2010.

The GAO declined immediate comment on the protest, other than to say that NASA would have 30 days to respond to the complaint and that it would issue a ruling by April 29.

NASA, meanwhile, said only that it was required to suspend work on the contracts in response to the complaint.

PlanetSpace said it had offered better deal to NASA at a lower cost than one of the two proposals selected.

"The PlanetSpace proposal represented better value to the government. We believe that the GAO will find that flaws in the procurement justify award to PlanetSpace. We look forward to the GAO's review of this case," the company said in a statement on Thursday.

NASA decided to use commercial contractors for deliveries to the space station rather than relying on the Russian Progress cargo vehicles, which also transport cargo to the $100 billion orbital complex, a project of 16 nations that has been under construction for more than a decade.

Russia will transport U.S. astronauts to and from the station on its Soyuz capsules after the shuttles are retired in 2010. The proposed shuttle replacement will not be ready to fly until about 2015.

(Editing by Tom Brown and Cynthia Osterman)

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