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NASA move may force shutdown of Constellation program

CAPE CANAVERAL — In a surprise move, NASA has told major contractors working on its troubled Constellation moon rocket program that they are in violation of federal spending rules and must immediately cut back work by almost $1 billion to get into compliance.

As many as 5,000 jobs from Utah to Florida are expected to be lost over the next month.

The effect of the directive, which went out to contractors earlier this week and which Congress was told about on Wednesday, may accomplish something that President Barack Obama has sought since February: killing Constellation's system of rockets, capsules and lunar landers that has already cost at least $9 billion to date.

The decision caps a behind-the-scenes battle between aerospace giants and NASA managers over who is responsible for covering the costs of dismantling the Constellation program.

At issue is the federal Anti-Deficiency Act that requires all federal contractors to set aside a portion of their payments to cover costs in case the project is ever canceled.

New NASA calculations say contractors are $991 million short of what they must withhold — and the agency has ordered the companies to find that money from the roughly $3.5 billion they're budgeted to get for Constellation projects this year.

In a letter to Congress released Wednesday, NASA Administrator Charlie Bolden said: "Under the Anti-Deficiency Act (ADA), NASA has no choice but to correct this situation."

The biggest loser is Utah-based Alliant Techsystems Inc., or ATK, which is building the first stage of the Ares I rocket — Constellation's centerpiece that was supposed to take astronauts to the International Space Station and ultimately the moon.

According to NASA, the company's termination costs total $500 million — the most for any contractor working on the program.

Other large companies affected include Lockheed Martin ($350 million); Pratt Whitney Rocketdyne ($48 million); and Boeing ($81 million). "Many of these reductions will be implemented via reductions in work force … primarily affecting Texas, Alabama, Colorado, Utah, and Florida," NASA told Congress, but it did not include a breakdown by state of job losses.

NASA move may force shutdown of Constellation program 06/09/10 [Last modified: Wednesday, June 9, 2010 10:59pm]
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