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GAO Rejects Rocketplane Kistler Protest On Losing NASA Funding

By | February 4, 2008

      NASA Now Likely Able to Select Another Firm For Space Transport Aid

      The Government Accountability Office (GAO) denied a protest by Rocketplane Kistler, which contested a NASA decision to drop potential financial backing of company efforts to develop a private commercial transport service to low Earth orbit.

      While NASA earlier selected Rocketplane as eligible to receive financial assistance toward the company developing a space transport system, the company was unable to raise required amounts of private investment, and NASA then withdrew its selection of Rocketplane for the Commercial Crew and Cargo program.

      That GAO decision likely opens the door to NASA selecting another firm as eligible for assistance.

      GAO, the referee agency for contract disputes, ruled that Rocketplane was wrong in asserting that NASA shouldn’t have used a less formal, so-called "other transactions" authority to select the firm to receive NASA assistance in the effort to supply the space transport service.

      According to the GAO, NASA didn’t have to use a formal contracting procedure in selecting Rocketplane to receive assistance.

      In assessing the Rocketplane contention that NASA should have used a formal contracting arrangement, the GAO instead found that NASA "could use a Space Act agreement under that agency’s ‘other transactions’ authority, and was not required to use a procurement contract, for the development and demonstration of a space transportation system, where the principal purpose of the announcement was not to acquire goods or services for the direct benefit of the agency, but to stimulate a public purpose authorized by law."

      Therefore, Rocketplane erred in its legal reasoning, the GAO found.

      And, accordingly, "We deny the protest."

      Since this arrangement with NASA didn’t involve a formal contract award, the GAO observed that it normally wouldn’t review a protest of the action.

      And NASA wasn’t legally bound to use formal contracting procedures here, because the deal with Rocketplane "did not principally provide for the acquisition of goods and services for the direct benefit and use of NASA," according to the watchdog agency.

      Rocketplane last fall lost its deal to develop rocket transportation to haul cargo to the International Space Station (ISS), leaving NASA to seek a new competition for companies wishing to share in the $174.7 million remaining seed money that the space agency offers to firms that can provide the service.

      NASA terminated its funding agreement with Rocketplane Kistler, of Oklahoma City, a deal that the company had received in 2006.

      Until the new competition results in selection of another firm, that leaves Space Exploration Technologies Corp. (SpaceX) for a while as the only COTS-selected firm.

      The space agency noted that Rocketplane "repeatedly failed to meet agreed-upon milestones in its effort to develop and demonstrate commercial transportation capabilities to low Earth orbit" as part of the Commercial Orbital Transportation Service (COTS).

      With Rocketplane dropped from the program, NASA then provided a synopsis and full announcement for a new round of industry proposals, permitting firms to compete for funding that remains in the COTS program.

      Rocketplane had received $32.1 million in NASA seed money, but failed to raise about half a billion dollars in private funds.

      The space agency intends to enter into one or more new COTS agreements early this year. Companies that are U.S. commercial providers, as defined in the Commercial Space Act, will be eligible.

      COTS provides seed money to companies when they reach performance milestones to help them design and develop space transportation capabilities that could pave the way for private cargo deliveries to the International Space Station.

      The money math works out this way:

      Of the $206.8 million NASA agreed to invest in Rocketplane Kistler, the company received a total of $32.1 million. The remaining $174.7 million will be offered to aerospace firms in the new competition.

      NASA needs private space transportation companies, and perhaps Russian and European space agencies, to step in when the United States — the nation that put men on the moon — will become unable to take even one astronaut into low Earth orbit.

      That will be the situation for half a decade, from the 2010 mandated retirement of the space shuttle fleet until 2015, when the next-generation U.S. spaceship Orion-Ares is slated to blast off on its first manned flight. That gap might be narrowed if some lawmakers succeed in plans to provide funding to extend space shuttle flights for a couple of years, and to accelerate the Orion-Ares beginning of flight to 2013 from 2015.

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