With proposals due soon for the $175 million NASA is putting up to help at least one firm demonstrate cargo delivery to the international space station, Rocketplane Kistler is waging a legal and political battle to prevent the U.S. space agency from giving away the money that

 once had been theirs.

Rocketplane Kistler (RpK) was one of only two firms selected last year to receive funding under NASA’s Commercial Orbital Transportation Services (COTS) demonstration program. The Oklahoma City-based firm beat more than 

20 other contenders to win $207 million in public funding

to help them complete the K-1 reusable rocket and make a trial run to the space station.

NASA gave RpK about $32 million before terminating the company’s COTS agreement in October for failing to meet milestones contained in their agreement such as raising

 $500 million in promised private financing by a May deadline and falling behind a pair of K-1 design reviews that were supposed to be done by the end of the summer.

RpK immediately appealed NASA’s decision, blaming the agency for spooking would-be investors

by signing a multi

year deal for space station re

supply services this spring with Russia and then by requesting input this summer from firms besides RpK and the other original COTS winner – El Segundo, Calif.-based Space Exploration Technologies (SpaceX) – about their readiness and willingness to sell re

supply services to NASA.

RpK asked NASA to reinstate its COTS award or at least give the company $10 million for progress it had made prior to the termination of its agreement. RpK said it otherwise would have to take NASA to court (RpK has no recourse to the U.S Government Accountability Office, which normally referees government contracting disputes, because its COTS agreement is not a standard government contract).

Unmoved, NASA informed RpK in writing in late October that the termination was a final agency decision.

With its direct appeals exhausted, RpK wrote NASA

 Nov. 9 saying the company was ready and willing to pursue satisfaction through the courts, but would hold off taking legal action if NASA granted Rocketplane

Chairman George French a face-to-face meeting in Washington with the man who signed RpK’s termination notice: Rich Gilbrech, NASA’s new associate administrator for exploration systems. “The meeting and discussions must be scheduled to occur soon during the last week in November or the first week of December this year,” wrote RpK attorney

 James H. Roberts of Washington-based Van Scoyoc-Kelly PLLC.

NASA spokeswoman Beth Dickey said the agency “does not comment on potential litigation and so will not comment on the substance of any communications between NASA and RpK related to the October 18, 2007, termination of the Space Act agreement.”

Dickey said NASA would continue to conduct its ongoing competition for the $175 million and hopes to select in February one or more new companies to invest in as part of the COTS program.

RpK’s renewed threat to sue follows a protest it filed Oct. 30 with the U.S. Government Accountability Office. The protest challenges NASA’s plan to dole out the $175 million through a flexible Space Act Agreement rather than a traditional procurement contract. While RpK’s COTS award took the form of a negotiated Space Act

Agreement, the company’s protest says it now believes that what NASA is seeking to buy under COTS is a better fit for a more traditional contract. The GAO has said it would review the protest.

Meanwhile, RpK’s Nov. 9 letter to NASA did not say what French hoped to gain by meeting with Gilbrech, and French did not respond to messages left on his cell phone by a Space News reporter

 Nov. 13 and 16.

An RpK official told Space News at the X Prize Cup in late October the company would not submit a new proposal for the COTS money, something NASA says RpK is welcome to do.

NASA sources familiar with the matter said French, a Wisconsin businessman who bought struggling Kistler Aerospace on the eve of last year’s COTS competition and folded it into his Rocketplane suborbital business, is pressuring the agency for a payout by protesting the new procurement

 and employing Van Scoyoc-Kelly to push legislative language in Congress that would bar NASA from making new COTS awards.

If such language ends up in one of the unfinished spending bills now before Congress, one NASA source said the agency could seek to shift the funds towards the Ares 1 rocket it is

building to launch the Orion Crew Exploration Vehicle.

“It’s not like they couldn’t use the money,” the NASA source said.

Van Scoyoc-Kelly is run by attorney and lobbyist Kevin F. Kelly, a former senior aide to Sen. Barbara Mikulski (D-Md.), who chairs the Senate Appropriations subcommittee that drafts NASA’s budget.

Kelly had a hand in shaping language Mikulski inserted into a NASA spending bill last year that would have barred the space agency from buying a new Landsat remote sensing satellite with a fixed price contract, an approach Boulder, Colo.-based Ball Aerospace and Technologies had been promoting for more than a year, according to industry and government sources on both sides of the issue.

 That bill never became law, but NASA subsequently

altered its procurement strategy anyway, breaking the instrument and bus into two separate contracts and giving Greenbelt, Md.-based Goddard Space Flight Center a more active role in the program.

Kelly is an active political donor, giving more than $20,000 to candidates and political action committees in 2007, according public records.

 Reached by telephone Nov. 13, Kelly declined to confirm or deny that he was pushing COTS language on RpK’s behalf. “We’re not going to comment,” he said.

RpK’s legal and political tactics were only part of the drama unfolding in the final weeks before the Nov. 21 deadline for submitting COTS proposals.

SpaceDev, the Poway, Calif., company that finished a close third behind SpaceX and RpK in last year’s COTS competition, lured former astronaut Jim Voss away from Transformational Space Corp. (t/Space), another COTS contender.

Voss, a space shuttle astronaut who flew five missions including a five-month stay aboard the international space station, was t/Space’s chief engineer and vice president for space exploration.

SpaceDev Managing Director Scott Tibbitts said Voss joined the company the first week of November as vice president for engineering and would help with all of SpaceDev’s programs, not just its COTS bid.

T/Space President David Gump said the Reston, Va.-based company, which finished last year’s COTS competition in the top six, plans to submit a new proposal despite losing Voss to SpaceDev. Gump said Nov. 12 that the company has a replacement for Voss, but is unwilling to publicly identify the individual “for competitive reasons” prior to submitting its proposal to NASA.


, which won $278 million in last year’s COTS competition and has earned roughly $100 million so far from NASA for meeting all of its milestones to date,

now is going after the available $175 million to the chagrin of some of the other contenders.

SpaceX President Elon Musk confirmed Nov. 13 that his company will submit a proposal for what he described as “a simplified Capability D,” referring to an option spelled out in the company’s current COTS agreement for demonstrating the ability of the Dragon capsule and Falcon 9 rocket to carry crew to the space station.

Meanwhile, industry sources said that several COTS contenders’ plans were thrown for a loop by private reports that Denver-based United Launch Alliance had been chastised by NASA Administrator Mike Griffin for promoting the Atlas 5 rocket’s potential as a crew launcher and discouraged from priming or supporting any COTS bids on the grounds that the program was intended for smaller, entrepreneurial firms. United Launch Alliance is a joint venture between Boeing and Lockheed Martin, both of which already have major roles helping build the Orion crew capsule and Ares 1 rocket NASA intends to use for trips to the space station and eventually the Moon once the space shuttle is retired.

Griffin told Space News that he had not warned United Launch Alliance to stay away from COTS.

“For the record, I have not told anyone not to help any contenders on COTS, or that COTS is only for ‘entrepreneurs

,’” Griffin wrote Nov. 13 in an e-mail. “We had big companies bidding last time, and I expect the same again. Anyone who wants to bid, can bid. On the prior occasion, the price offered by the established launch vehicle suppliers was not competitive. And that was that.”