SPACEHAB Subsidiary Wins New $35 Million NASA Contract at Vandenberg

Astrotech to Begin Support on Multiple Spacecraft Missions at the Western Range

SPACEHAB, Incorporated (NASDAQ:SPAB), a leading provider of commercial space services, today announced that its Astrotech Space Operations subsidiary has been awarded a new contract by NASA for payload processing services for expendable launch vehicles (ELVs) from Vandenberg Air Force Base (VAFB) at the Western Range in California.

With a value not to exceed $35 million, this indefinite-delivery, indefinite-quality (IDIQ) contract is for payload processing support on several upcoming NASA spacecraft missions. The contract stipulates that the multi-mission contract services are targeted to begin in calendar year 2007 running through 2009 with additional options through 2011. Astrotech responded to the NASA Request for Proposal (RFP) in March of this year.

“NASA is an extremely valuable customer to Astrotech and we are proud to play an important role in support of NASA ELV missions at Vandenberg,” said Astrotech Space Operations General Manager, Don M. White, Jr. “We pledge to our NASA customer that the Astrotech team will continue to provide the skilled and safe processing support services our customers have come to expect over the past 23 years.”

Astrotech was awarded a similar NASA IDIQ contract in 2005 for Payload Processing Services at its Titusville, Florida location in support of East coast ELV launches. Additionally, Astrotech is nearing the construction phase on the previously announced $20 million facility upgrade contract at VAFB, expanding the Company’s accommodations at that location for five-meter fairing spacecraft.

From three locations nationwide, Astrotech provides all support necessary for government and commercial customers to successfully process their satellite hardware for launch, including advance planning; use of unique facilities; and spacecraft checkout, encapsulation, fueling, transport, and remote control through launch. In its 23-year history, Astrotech has supported the processing of nearly 250 spacecraft without a single impact to a customer’s mission launch schedule.

About SPACEHAB, Incorporated

Incorporated in 1984, SPACEHAB (www.spacehab.com) is a leading provider of commercial space products and services to NASA, international space agencies and universities, Department of Defense, and private customers worldwide. The Company offers end-to-end space access solutions, space systems development, mission integration and pre-launch processing facilities and services, and large-scale government program support services.

The statements in this document may contain forward-looking statements that are made pursuant to the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements are subject to risks, trends, and uncertainties that could cause actual results to be materially different from the forward-looking statement. These factors include, but are not limited to, continued government support and funding for key space programs, product performance and market acceptance of products and services, as well as other risk factors and business considerations described in the company’s Securities & Exchange Commission filings including the annual report on Form 10-K. Any forward-looking statements in this document should be evaluated in light of these important risk factors. The Company assumes no obligation to update these forward-looking statements.