NASA Averts Constellation Shutdown with Fresh Funds

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NASA is paying Alliant Techsystems (ATK) and other contractors to continue work on the agency’s marked-for-termination Constellation program through the end of September, though it is unclear whether the hundreds of millions of dollars NASA released in mid-June will avert layoffs, according to agency officials.

NASA Administrator Charles Bolden wrote U.S. lawmakers June 9 that the agency would be slowing work on the Ares 1 rocket and other parts of Constellation to address a $1 billion shortfall the program was facing as a result of contractors failing to adequately account for costs they could incur as a result of having to layoff employees, cancel orders, vacate leases and mothball facilities if the program is terminated.

Bolden estimated that 2,500 to 5,000 contractors could have to be reassigned or laid off as a result.

NASA said some of those job losses were expected in Utah, where ATK is building Constellation’s Ares 1 main stage at its facilities there. According to Bolden’s letter, Ares “will generally receive no additional funding for the first stage contract.”

But one week after Bolden’s letter arrived on Capitol Hill, NASA released $161 million to ATK to continue work on Ares 1. NASA officials say the June 16 “progress payment” constituted a routine cash infusion made periodically to contractors throughout the year, and that money would keep ATK from stopping work on the contract through Sept. 30.

“The money was to prevent immediate contract termination on the part of the contractors,” NASA spokesman Michael Braukus said June 25. “The contractors are probably going to make other adjustments, such as reducing employee staff levels, to make up the difference in covering the shortfall of funding.”