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NASA officially terminates contract with Rocketplane Kistler

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NASA officially announced this afternoon it is terminating its contract with Oklahoma City-based Rocketplane Kistler. The company was awarded a $207 million contract from the National Aeronautics and Space Administration in August of 2006 to build an orbital rocket ship capable of carrying cargo to and from the International Space Station.

Last month, NASA informed the company it was taking steps toward terminating the contract. Today the space agency made it official.

"We have spent the past year working with Rocketplane Kistler and given them every opportunity to succeed," said Alan Lindenmoyer, manager of the Commercial Crew and Cargo Program at NASA's Johnson Space Center in Houston. "But we concluded it is in our best interests to end the contract and re-open the bidding the process."

NASA had paid Rocketplane Kistler $32 million before putting the brakes on the project. The contract required the company to come up with $500 million in private funding over a four-year period.

Lindenmoyer said Rocketplane Kistler met three of four milestones for the project but failed on the fourth, which involved raising the private funds. Because of the funding woes, Lindenmoyer said Rocketplane Kistler stopped technical work on the project in July, which caused the company to miss a critical design review in August.

Lindenmoyer said Rocketplane Kistler would not be required to pay back the $32 million NASA already had given the company. The new bidding process will be for the $175 million that remains.

The state of Oklahoma awarded Rocketplane investors an $18 million tax credit to help build a suborbital tourism plane in 2003.

Oklahoma astronaut John Herrington, Rocketplane's pilot, said the company's space tourism venture still will be successful despite recent financing issues.

"Wait a week and see what happens," Herrington said. -Scott Cooper and Ben Fenwick

More Rocketplane coverage:
Rocketplane begins staff layoffs
Ex-Rocketplane chief engineer says funding diverted from tourism vehicle
Rocketplane lays off manager, seeks $500 million
Rocketplane responds
Texas rocket leaves Oklahoma soil, returns 
Rocketplane beat to launch by Texas company 
Another rocket company ready to do business with state

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