Orbital Sues Virginia, Says State Owes It $16.5 Million

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WASHINGTON — Orbital Sciences Corp. is suing the state of Virginia over $16.5 million the company says it shelled out a few years ago to help cover cost overruns incurred during construction of the state-owned launchpad Orbital leased to launch cargo delivery missions to the international space station (ISS) for NASA.

In a lawsuit filed Sept. 24 with the Richmond Circuit Court, Orbital is demanding the $16.5 million, plus interest. Orbital is seeking a jury trial and has named as defendants Virginia; the Virginia Commercial Space Flight Authority that runs the Mid-Atlantic Regional Spaceport (MARS) on Wallops Island, Va.; and Virginia’s state comptroller, David A. Von Moll.

Reached by email Oct. 4, Orbital spokesman Barron Beneski declined comment, as did Dale Nash, executive director of the Virginia Commercial Space Flight Authority. None of the defendants had filed a response to Orbital’s complaint as of Oct. 4. 

Orbital filed suit less than a week after its Antares rocket launched the first Cygnus space freighter to the station from MARS Pad-0A, which is located on NASA’s Wallops Flight Facility. Funding for the vehicles came mostly from NASA in the form of a roughly $300 million technology development contract signed in 2007, and an eight-flight, $1.9 billion Commercial Resupply Services contract signed in 2008. 

Orbital struck a deal with Virginia to launch its missions from Pad-0A, which the state agreed to build. However, Virginia bungled the construction project, which led to delays and cost overruns beginning in 2010, Orbital said in the complaint. The company stepped in — “reluctantly,” according to the complaint — and started buying MARS assets to provide the state with cash to continue construction.

Orbital bought $42 million worth of hardware, with the understanding that Virginia would eventually buy these assets back, the complaint says. The state bought back about $25.5 million worth of hardware in 2012, but balked at repurchasing a horizontal rocket transporter and associated hardware. The state argued this hardware could only be used for Antares and therefore was not a reimbursable cost. Orbital disagreed.

The Aerospace Corp., a federally funded think tank specializing in military space, was brought in to mediate and ruled  in Orbital’s favor in 2012, according to the complaint. Orbital subsequently sought payment but was told June 5 by Virginia Transportation Secretary Sean Connaughton that the state would not pay. Connaughton informed Orbital of the state’s decision during a meeting of the Virginia Commercial Space Flight Authority’s board of directors, according to the complaint.