Sources: United Space Alliance Directed To Stop Pursuing New Business

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WASHINGTON — United Space Alliance (USA), the Boeing-Lockheed Martin joint venture created in 1995 to operate NASA’s now-retired space shuttle, has been barred by its corporate parents from pursuing any new business, according to industry sources.

The move raises new questions about the future of the Houston-based company, a major NASA contractor that has struggled to carve out a prominent new role for itself in the post-shuttle era. USA’s current shuttle operations contract is set to expire in September.

“I have been told by folks who work at senior levels directly at USA that they have been told they can’t go after any new [contracts] — that they are basically standing down,” one industry source said. “Does that mean Boeing and Lockheed plan to totally dismantle the company? I can’t go that far, but if you are not allowed to go after any new work, that certainly says something.”

Another industry source said USA was notified of the Boeing-Lockheed Martin decision during a Dec. 6 meeting of the USA advisory board. “If they are in a proposal and a down-select hasn’t occurred, they would be able to fulfill that, if they won, but they couldn’t bid future contract obligations,” this source said.

USA was not represented at a twice-yearly chief executive roundtable with NASA Administrator Charles Bolden, held Dec. 6 at agency headquarters here, according to attendees. The meeting was attended by the heads of NASA’s largest contractors, including Boeing Network and Space Systems President Roger Krone and Lockheed Martin Space Systems Executive Vice President Joanne Maguire, attendees said.

USA spokeswoman Tracy Yates said Virginia Barnes, the company’s president and chief executive, did not attend the meeting because it conflicted with the USA advisory board meeting. Yates described the USA advisory board meeting as a “major event” that “involves all of our top management.”

“NASA was informed in advance that our [chief executive] would not be there and why. There was no issue,” Yates said.

Speculation about USA’s future has been rampant since the space shuttle retired last summer, forcing the company to lay off workers in droves. While USA does have other NASA support contracts, these are dwarfed in size by the shuttle-focused Space Program Operations Contract.

“Looks like united space alliance will no longer be a company,” one Houston-based engineer wrote in a Dec. 13 Twitter message that has since been deleted.

Yates acknowledged Jan. 4 that Boeing and Lockheed Martin are discussing the future of USA, but declined to be more specific.

“All I can really say is that the member companies are having strategic discussions about the future of United Space Alliance since its primary mission of space shuttle operations has concluded,” Yates said.

Jenna McMullin, an Arlington, Va.-based spokeswoman for Boeing Network and Space Systems, deferred comment Jan. 6 to USA. Joan Underwood, a spokeswoman for Denver-based Lockheed Martin Space Systems, did not return phone calls by press time.

USA’s Space Program Operations Contract was last extended in October and modified in November to cover shuttle program closeout activities, including getting the retired orbiters ready for museum display. The contract extension and modification, worth some $280 million combined, are set to expire at the end of September.

NASA is gearing up for a new human spaceflight support contract intended to bridge the gap between shuttle and a follow-on system. Yates declined to say whether the company had intended to pursue the Test and Operations Support Contract (TOSC), citing company rules barring her from commenting on prospective new business.

Boeing, for its part, does intend to bid for the work, expected to be awarded in October, Paula Korn, a company spokeswoman, said. Korn said Boeing views it as a follow on to work the company performs at Kennedy under its Checkout, Assembly and Payload Processing Services contract originally awarded in 2002. NASA has twice extended that contract, which currently runs through September, for a total maximum value of $825 million.

“Boeing’s Space Exploration division is preparing a bid on TOSC, supporting [international space station] commercial crew and cargo services,” Korn said in a Jan. 6 statement. “Boeing currently provides payload processing for the [space station], expendable launch vehicles and other ground operations programs at Kennedy Space Center, through NASA’s [Checkout, Assembly and Payload Processing Services] program.”

USA currently holds a number of relatively small NASA contracts, including an Integrated Mission and Operations Contract at Johnson Space Center in Houston, that also runs through September, thanks to a $35 million extension awarded in November 2010.

“USA and its member companies are committed to continuing excellent performance on all contracts,” Yates said.

USA announced no new contract wins in 2011 beyond the modification of its main Kennedy Space Center support contract.

 

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