Cuts Funding, Issues Notice Of Default

After months of discussions between the two entities, last week officials at NASA sent notice to Oklahoma City-based Rocketplane Kistler, issuing a default letter which cuts off future funding on its portion of a $500 million development contract signed with the private spaceflight company last year.

The Wall Street Journal reports the space agency sent Rocketplane Kistler the notice Friday, after the company missed two scheduled development milestones as part of its Commercial Orbital Transportation System (COTS) contract. As ANN reported, the company was awarded a contract in August 2006 to develop a low-cost system to transport cargo -- and, ultimately, crewmembers -- to the International Space Station.

Officials with NASA and Rocketplane Kistler stressed the default letter does not represent the formal cancellation of the contract -- but it does give the agency the option of doing exactly that after 30 days, and the writing would appear to be on the wall for RpK.

"As a result of a review of that performance, NASA decided that further efforts by the company are not in the agency's interest," agency spokeswoman Beth Dickey told MSNBC this week.

Rocketplane Kistler tried earlier this year to secure $500 million in private financing to continue development of its K-1 launch vehicle -- one of the two missed milestones of the COTS agreement. Despite the lure of a lucrative NASA contract, however, the company was unable to score the needed cash.

RpK Chairman George French told the Journal "we're looking at all the possible ways to cure the deficiency" noted in NASA's default letter.

Rival commercial launch ventures -- including another COTS winner, Space Exploration Technologies -- have also found it difficult to earn private funding, according to industry experts cited by the WSJ.

Under terms of the COTS development contract, SpaceX and RpK shared in the $500 million allocated by NASA to develop a private space transportation solution to resupply the ISS, to be used after NASA retires its space shuttle fleet in 2010.

RpK was allocated $207 million of that money. Dickey said the company wouldn't have to pay NASA back the money if the contract is declared void.

There remains the possibility Rocketplane Kistler could hold onto the contract, Dickey added, if it is able to raise the necessary private funding over the next month.

FMI: www.rocketplanekistler.com, www.nasa.gov