NASA announces $500 million rocket contract

Officials at the National Aeronautics and Space Administration announced Tuesday that Boeing has been awarded a $514.7 million contract to construct the upper stage of the Ares I rocket that will launch the exploration vehicle to carry astronauts back to the moon.

A contracting team led by Chicago-based Boeing beat out another team under the direction of ATK, a weapons and space systems company.

"It was an excellent and open competition," said Doug Cooke, NASA's deputy associate administrator for exploration systems. The competition began in January, and the two teams submitted final proposals on Aug. 13. Boeing also won the opportunity to build optional parts for the upper stage. If NASA decides to order the parts, the contract value could increase to $1.1 billion.

Steve Cook, who manages the Ares project, said the competition was notable because teams were bidding to construct a design devised by NASA. "This sets us up with NASA expertise leading contracts," said Cook. Because NASA owns the design, the agency can award contracts to different companies to build the same model again in the future, he said. NASA used a similar contracting system when it first built lunar exploration rockets in the 1960s.

The Ares I rocket will propel the crew of the exploration vehicle Orion into orbit. Ares I's upper stage consists of an engine and an avionics unit, which will take over navigation after the rocket reaches a height of 314,000 feet.

NASA plans to construct Ares in several phases. The agency already has issued contracts for Orion itself, the upper stage engine on Ares I, and Ares I's lower stage. These contracts went to Lockheed Martin, Pratt & Whitney Rocketdyne, and ATK, respectively. The rocket will be ready for assembly by 2016.

NASA announced the award a day before the two-year anniversary of Hurricane Katrina, and Cook said employees at NASA's Gulf Coast stations were a major factor in the timely award. The researchers had "done an outstanding job through personal hardships," he said, and the contract work will bring workers and research to centers in the Gulf Coast region.

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