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The New York Times September 01, 2006

Lockheed Wins Job of Building Next Spaceship

By Warren E. Leary and Leslie Wayne

WASHINGTON, Aug. 31 — Lockheed Martin won a multibillion-dollar contract from NASA on Thursday to build the nation’s next spaceship for human flight, a craft called Orion that is to replace the space shuttle and eventually carry astronauts to the moon and beyond.

The much-awaited announcement was a major victory for Lockheed and a startling setback for its rival, a joint venture of Boeing and Northrop Grumman.

Before the announcement, many analysts had said the deal was the Boeing team’s to lose. A leader in building unmanned rockets and spacecraft, Lockheed has little experience with human spaceflight; by contrast, Northrop, Boeing and their subsidiaries built not only the space shuttle fleet but the Apollo vehicles that took men to the moon in the 1960’s and 70’s.

In a late-afternoon news conference to announce the decision, NASA was tight-lipped about the reasons, saying the details of the two competing bids were “proprietary.” Doug Cooke, a deputy associate administrator who led the selection team, said both proposals “were sound and carefully prepared.”

Mr. Cooke said the Lockheed Martin design looked “achievable,” an indication that it relied more heavily on known technologies than developing new ones. “This is a design that is based on known capabilities,” he said.

The NASA decision is likely to change the dynamics of the space business, setting Lockheed up to be the dominant player in space exploration and perhaps forcing Boeing to rethink its role.

“For both companies, this was a make-it-or-break-it award to stay in the manned space business,” said Brett Lambert, managing director of the Densmore Group, an aerospace consulting firm, adding, “This decision defines who will continue to be a major player in space for the next 10 years.”

The plan calls for building a space capsule with an emergency escape tower similar to the Apollo capsule that ferried men to and from the moon. Orion, though, would be much larger than Apollo. The NASA administrator, Michael D. Griffin, who did not speak at the news conference, has called the new ship “Apollo on steroids.”

Orion is to carry up to six astronauts to the International Space Station; a later version would take four astronauts to the moon, where they would use a separate lander ship to reach the surface. Still later versions could serve as crew-return vehicles for ships that one day may take humans to Mars, NASA officials said.

The shuttle fleet is to be retired in 2010. Orion is to make its first human flight by 2014, but at Congress’s urging NASA hopes to fly at least a year earlier to minimize a gap in the nation’s ability to send people into space. The agency is also developing new booster rockets, based on space shuttle technology, to launch Orion and cargo to the moon. The rocket to launch Orion is set to make its first flight in 2009.

The Orion contract calls for Lockheed Martin to get $3.9 billion through 2013 for designing, developing, testing and evaluating the new craft and building two for initial flights into space. A second stage, from 2009 to 2019, provides $3.5 billion for building an unspecified number of manned ships to go to the space station and the moon, and some cargo-only versions for supplying the station. The contract also includes $750 million for engineering work to modify or improve the ships.

But some experts say that these numbers are conservative and that NASA projects typically run 50 percent above initial estimates, in part because there is little incentive to stay within budget once a contract has been awarded.

Howard McCurdy, a space policy expert at American University in Washington, said that once Boeing’s subsidiary Rockwell got the contract to build the space shuttle, “they had NASA over a barrel — they were like a monopoly supplier.”

This will be the first time that Lockheed has been given a lead role in manned space flight. It comes after the company failed in a 1996 attempt to design the X-33 space plane, which was to be a replacement for the quarter-century-old shuttle fleet but was abandoned because of technical problems after NASA spent more than $900 million on it.

Joan Underwood, a spokeswoman for Lockheed Martin Space Systems, said that even her company would not know the exact reasons for its selection “until each team is debriefed by NASA in a week or two.”

But she said Lockheed had been the only maker of capsule systems used by NASA since the Apollo program, from the Viking missions to Mars in the 1970’s to those of the rovers Spirit and Opportunity, which are still gathering information on Mars.

“We are the capsule company,” she said.

The big loser on Thursday was Boeing, which has stumbled in its space business lately. Its entry into the commercial space launching business came as commercial demand for satellites began to fall. Its spy satellite program was so plagued with problems that the Pentagon took it away from Boeing and gave it to Lockheed.

In addition, it was a major contractor for the International Space Station, which has suffered from enormous cost overruns. Its engineers were blamed, in part, for the problems that led to the Columbia shuttle disaster in 2003, and the United States Air Force recently withheld $1 billion of rocket launching contracts from Boeing after it was found that company employees had stolen proprietary documents from Lockheed to compete for Air Force rocket business.

A victory yesterday would have been a signal that Boeing had turned the corner.

“For Boeing, it would have been a real vote of confidence in their ability to manage a major program,” said John Pike, director of Global Security.org, an aerospace research company.

Tanya Deason-Sharpe, a Boeing spokeswoman, said that while Boeing was disappointed, it would compete for other manned space vehicle contracts, including the Ares I rocket that will launch Orion into space and the Ares V cargo launcher, also part of the program.

“Boeing is bigger than any single contract win or loss,” she said.

The blow to Northrop and Boeing is softened by the prospect of additional work as subcontractors to Lockheed or in other parts of the program.

Lockheed plans to spread out the work on the program in a number of locations where NASA already has a strong economic and political presence. Work is expected to be done in Houston, where Lockheed estimates that 1,200 new jobs will be created; in Denver, with 500 new jobs; in Florida, with 300; and at the Michoud plant in New Orleans, with 200.

The announcement was welcomed by members of Congress from those regions. Representative Mark Udall, a Colorado Democrat, called it “great news for Colorado” and “a boon to Colorado’s aerospace industry, which is third in the nation.”

While Lockheed and Boeing were the big competitors on this contract, they are partners on other government space contracts. Both are partners in United Space Alliance, a joint venture that provides support services for the shuttle. In addition, Boeing and Lockheed have formed another venture, United Launch Alliance, to jointly provide Air Force rocket launchings.

Mr. Griffin, the NASA administrator, who has been a forceful presence in the space shuttle fleet’s return to orbit after the Columbia disaster, stayed in the background at Thursday’s news conference. A spokesman said that the announcement spoke for itself and that Mr. Griffin did not take part because his presence would have been a distraction.

Warren E. Leary reported from Washington for this article and Leslie Wayne from New York. Kenneth Chang contributed reporting from New York.


Copyright 2006, The New York Times Company