WASHINGTON — Orbital Sciences Corp. is warning subcontractors supporting development of a launch abort system for NASA’s Orion crew capsule that funding for the effort will cease April 30, according to industry sources and documents.

In an April 20 letter to Minneapolis-based Alliant TechSystems (ATK), one of two companies developing motors for the Orion Launch Abort System, Orbital said Orion prime contractor Lockheed Martin Space Systems of Denver would restrict funding for the effort by the end of April.

“Orbital Sciences Corporation is in receipt of a notice of funding limitations from our customer, Lockheed Martin, that no additional funds are forthcoming for the remainder of GFY 2010,” Gregory Pappas, subcontracts manager at Dulles, Va.-based Orbital, stated in the April 20 letter to ATK. “As ATK is aware, the current run-out date is April 30, 2010.”

In the letter, Pappas asserted that the lack of funding for the Orion Launch Abort System “does not constitute a Contract termination,” which would violate a law passed in December that prohibits NASA from using 2010 funding to cancel any contracts or activities under its Constellation program.

Constellation encompasses the hardware NASA would need to replace the space shuttle and return astronauts to the Moon. These include Orion, designed to transport astronauts to the international space station and later to the Moon, its Ares 1 launcher and the Ares 5 heavy-lift rocket.

In February U.S. President Barack Obama proposed canceling Constellation, including Orion, in his $19 billion NASA spending request for 2011. But in an April 15 speech at NASA’s Kennedy Space Center in Florida, the president spared the crew capsule from the ax, calling instead for a stripped-down Orion vehicle to serve as a crew lifeboat in the event of an emergency at the space station.

Although the move is viewed as a reprieve for Lockheed Martin and its Orion work force — scattered in states across the country but primarily concentrated in Colorado, Florida and Texas — as a crew-rescue vehicle it will launch unmanned, leaving no need for continued development of the complicated and costly Launch Abort System Orbital is developing with help from ATK and Sacramento, Calif.-based Aerojet.

Julie Van Kleeck, Aerojet vice president for space programs, said the company is aware of the funding restriction for the Launch Abort System and is shifting employees internally rather than issuing pink slips.

“We’ve been notified by Orbital,” Van Kleeck told Space News April 27. “But there’s a lot of restructuring going on in light of the president’s speech. We’re in the process of reassigning people for now. We’re hoping it’s temporary.”

In addition to developing the jettison motor for Orion’s Launch Abort System, Aerojet is providing propulsion systems for the capsule’s command module and service module.

“That’s continuing,” Van Kleeck said of the command and service module propulsion work, adding that the company does not anticipate layoffs as a result of funding restrictions on Launch Abort System development. “We’re conserving funding so we’re going to be ramping the team down and awaiting further direction.”

NASA and Lockheed Martin are preparing to modify the Orion contract in light of the different requirement set associated with the capsule’s scaled-back mission. Nevertheless, in an April 23 letter to Lockheed Martin, NASA reminded the company of its contractual obligation to set aside 2010 Orion funds to cover termination costs in the event the program is canceled in 2011.

“Previous to the letter, this was being covered off-contract at the agency level,” Cleon Lacefield, Lockheed Martin vice president and Orion program manager, said in an April 23 internal e-mail to the Orion team. “The letter changed NASA’s direction and is now requiring us to cover this contingency cost on-contract with current funding.NASA has not yet provided the additional funding for the full termination liability contingency. We are working very hard with our stakeholders so NASA will provide the necessary funding or otherwise resolve the issue so that it doesn’t impact our team’s performance. In the interim, we’re going to hold procurements to minimize impacts to the team.”

Lockheed Martin would not comment on the status of its Orion subcontracts but said the company is continuing to work with NASA to restructure the program and provide a crew-escape vehicle for use aboard the space station.

“We are encouraged that the Administration recognizes the progress that Orion has made and that a decision has been made to leverage Orion’s innovative technologies and unprecedented safety to provide near-term crew rescue capabilities for the International Space Station,” Lockheed Martin spokeswoman Linda Singleton said via e-mail April 27. “The Orion program continues to work to the [fiscal year] 2010 operating plan and we look forward to working with NASA to refine plans for supporting the International Space Station, and to developing an inspiring and sustainable human space exploration architecture for the nation with the Administration and Congress.”

Industry sources said Lockheed Martin funding restrictions would not affect a flight demonstration of the Orion Launch Abort System at White Sands Missile Range in New Mexico scheduled for May 6.