— NASA’s Constellation program is facing a potential $1 billion funding shortfall in the remaining four months of the current budget year, a situation that likely will force contractors to scale back work on major elements of the program before the agency obtains the congressional authority it needs to officially terminate the effort

In a June 9 letter to key U.S. lawmakers, NASA Administrator Charles Bolden said the work slowdown could result in “contractor workforce reductions estimated at 30-60 percent of the current population, or 2,500-5,000, for the balance of the year.”

According to the letter, NASA is confronting an estimated $994 million in potential costs associated with ending the Constellation program, which NASA has proposed doing next year. “Once these termination liability estimates are accounted for, the overall Constellation program is confronting a total estimated shortfall of $991 million for continued program effort for the balance of the year, compared with the revised FY 2010 plan,” the letter states.

Some contractors working on the 5-year-old program, designed to replace the retiring space shuttle with new rockets and spacecraft optimized for lunar missions, have told NASA they expect the agency to cover potential termination costs, according to administration and congressional sources.

But NASA officials say all of its contractors are bound by a boilerplate clause included in most agency contracts to set aside current-year program funds as insurance against the costs they could incur as a result of having to cancel orders, vacate leases and pink-slip employees if a program is ultimately shut down.

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“Given this estimated shortfall, the Constellation program cannot continue all of its planned FY 2010 program activities within the resources available,” Bolden wrote in the letter, which was sent to Rep. Bart Gordon (D-Tenn.), chairman of House Science and Technology Committee, and to Sen. Bill Nelson (D-Fla.), who chairs the Senate Commerce science and space subcommittee. “Under the Anti-Deficiency Act, NASA has no choice but to correct this situation.”

Bolden said NASA would “generally provide no additional funding” for development of the first stage of Constellation’s Ares 1 rocket, and would “descope remaining contracts, and reduce support contractor levels,” according to the letter.

Constellation’s Orion crew capsule, originally designed to launch atop the Ares 1, would essentially remain in limbo as NASA determines how best to continue a slimmed-down version of the capsule for use as an emergency lifeboat at the international space station. The letter said priority would be given to making the transition to the crew lifeboat version of Orion, with secondary priority assigned to continuing work on the J2X, an engine designed to serve as Ares 1’s second stage.

The letter said $89 million for Constellation ground operations would be cut, reducing “support contractor levels, task order scope and, operating cost. Effort will be made to preserve work to enable flight test strategy but with schedule impact.”

Other areas to be scaled back include the work on Constellation’s Extra-Vehicular Activity suit and on program integration, according to the letter.

Several influential lawmakers oppose the White House’s plan to cancel Constellation, and Congress last year passed legislation barring NASA from doing so until a replacement program is approved by Capitol Hill.