The omnibus budget package signed into law Dec. 26 granted the full $17.3 billion requested for NASA for 2008, but its provision barring the space agency from awarding funds to demonstrate space station logistics services pending a resolution of a dispute with RocketplaneKistler is a big disappointment.

RocketplaneKistler was one of the two companies originally selected to split up to $500 million in NASA funding under the Commercial Orbital Transportation Services (COTS) program but had its deal terminated by the agency last year after failing

to raise the private financing needed to finish developing its K-1 reusable launcher. The cancellation made $175 million in COTS funding available to give somebody else a chance to demonstrate a space station logistics service.

But RocketplaneKistler quickly moved to block any such award, filing a protest with the U.S. Government Accountability Office (GAO) challenging the space agency’s use of a


contracting vehicle known as a Space Act Agreement for the COTS demonstration. The company also threatened in a letter

to sue NASA unless the space agency either reinstated its COTS award – which, oh by the way, was a Space Act Agreement – or pay it $10 million for progress made prior to the termination.

In parallel, RocketplaneKistler enlisted the services of the lobbying firm Van Scoyoc-Kelly PLC.

The firm’s principal

is Kevin Kelly, a former staffer to Sen. Barbara Mikulski (D-Md.), who chairs the Senate Appropriations subcommittee that oversees NASA’s budget.

When the 2008 spending bill was finished it was accompanied by

report language noting that one of the two COTS agreements

is in dispute and directing

NASA to hold off on making a new agreement

until the matter is resolved. Otherwise, the report says, NASA might find itself in a situation where it has to fund three COTS agreements

when it had only planned and budgeted for two.

This congressional direction would be reasonable if the premise behind it were true, but in fact it is false: Reinstatement of RocketplaneKistler’s COTS contract is not a possible outcome of the GAO’s review. That review is focused only on the question of whether NASA’s plan to pursue another Space Act Agreement, rather than a more traditional contract, is appropriate.

Further, the beauty of a Space Act Agreement is that NASA would be free to walk away at any time, which makes the danger of the agency having to fund three companies moot.

George French, RocketplaneKistler’s chief executive officer, has said he has no plans to carry through on previous threats to challenge NASA’s termination of the company’s COTS contract in court. He should be taken at his word, but there is nothing to keep him from changing his mind. It is not clear exactly what

RocketplaneKistler wants at this point.

What is clear is that RocketplaneKistler appears


to prevent NASA from spending the COTS money the company had hoped to get, perhaps until it gets the payoff it is seeking from the government.

Equally clear, and unfortunate, is that Sen. Mikulski and her committee are willing to play the role of enabler here.

The GAO is slated to rule on RocketplaneKistler’s appeal by

Feb. 7, which in theory could allow NASA – assuming the company’s challenge is denied – to proceed with the new COTS award later in the month, something the agency says it is prepared to do. But a GAO dismissal wouldn’t necessarily be the end of it, because the bill language is not specific as to what constitutes resolution of this case. In other words, there is the possibility that RocketplaneKistler could drag this case out indefinitely through various legal avenues


Fortunately, the ambiguity in the bill language also affords Congress an early opportunity to make things right. If the GAO dismisses RocketplaneKistler’s protest, Sen. Mikulski should clearly signal to NASA that it is free to make the new COTS award.

If RocketplaneKistler wants to pursue further action beyond that, so be it. But Congress should not continue to punish NASA or another viable COTS contender – if there is one – on behalf of a company that was given an opportunity and failed to deliver.

With NASA facing a five

-year gap between the space shuttle’s planned retirement and the debut of its Ares/Orion successor,

Congress should be doing everything it can to help the agency develop alternative transportation systems, not putting a hold on funding that could help solve the