Lockheed Wins $3.9 Billion Contract For Lunar Craft

Lockheed Martin Corp., the world's largest defense company, won a $3.9 billion NASA contract to build a spacecraft that will return U.S. astronauts to the moon, beating a Northrop Grumman Corp.-led team.

"There will be launch vehicles, lunar landers, a lot of opportunities down the road," he said. "We have to pick up and move on."

Lockheed overcame a rocky history with NASA to win. Marco Caceres, a Fairfax, Virginia-based space industry analyst with Teal Group, projected Lockheed would lose, in part because of its earlier failure to develop a space plane to replace the shuttle.

Lockheed won NASA's X-33 program in 1996 to design a space plane which would have been launched from a standing position without using multiple stages or fall-away rocket motors. A composite liquid hydrogen fuel tank for the craft failed during testing in 1999, and the program was canceled in 2001 after NASA spent $912 million.

It appears work on propulsion and materials for that failed effort may have helped Lockheed prevail in Orion, Mr. Caceres said.

"Lockheed is the one that has done the more recent research and development, so that may be the deciding factor," he said.

The contract covers delivery of two spacecraft: one cargo version and one for crew, Mr. Cooke said. Options for additional production valued at as much as $3.5 billion and potential engineering awards of $750 million would give the project a combined total value of $8.15 billion through 2019, he said.

Lockheed had experience with support for shuttle maintenance and developed 10 robotic capsules used by NASA since the Apollo missions, Mr. Karas said.

"We may not have had the lead role with the shuttle, but as far as its external tank or the services we provide, we have thousands of people who work on human space flight everyday," Mr. Karas said.

Lockheed expects about 2,000 people will work on Orion, with about one third coming from existing NASA programs that are winding down, and the rest being new hires, he said.

The award means "hundreds of millions" in revenue for Hamilton Sundstrand over the life of the project, said Robert LeDuc, president of Hamilton Sundstrand's flight systems unit.

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