The U.S. space agency also considered a bid by privately owned
Sierra Nevada Corp, but opted to award long-time aerospace
contractor Boeing and California's SpaceX with contracts valued at a
combined $6.8 billion to develop, certify and fly their seven-person
Boeing was awarded $4.2 billion to SpaceX's $2.6 billion. SpaceX is
run by technology entrepreneur Elon Musk, also the chief executive
officer of electric car manufacturer Tesla Motors.
“SpaceX is deeply honored by the trust NASA has placed in us," said
Musk, a South Africa-born, Canadian American billionaire. "It is a
vital step in a journey that will ultimately take us to the stars
and make humanity a multi-planet species."
The awards position Boeing and SpaceX to be ready for commercial
flight services in 2017, said Kathy Leuders, manager for NASA’s
Commercial Crew program. She said both contracts have the same
"The companies proposed the value within which they were able to do
the work and the government accepted that," Leuders told reporters
in a conference call.
The contract has taken on new urgency given rising tensions between
the United States and Russia over its annexation of the Crimea
region of Ukraine and support for rebels in eastern Ukraine.
Boeing's CST-100 spaceship would launch aboard Atlas 5 rockets,
built by United Launch Alliance, a partnership of Lockheed Martin
Corp and Boeing. SpaceX, which already has a $1.3 billion NASA
contract to fly cargo to the space station, intends to upgrade its
Dragon freighter to carry astronauts.
NASA has said that in addition to test flights, the awards would
include options for between two and six operational missions.
By flying astronauts commercially from the United States, NASA could
end Russia's monopoly on space station crew transport. The agency
pays $70 million per person for rides on Russian Soyuz capsules, the
only flights available for astronauts since the retirement of the
U.S. space shuttle fleet in 2011.
China, the only other country to fly people in orbit besides the
United States and Russia, is not a member of the 15-nation space
NASA has spent about $1.5 billion since 2010 investing in partner
companies under its Commercial Crew program. Boeing and SpaceX have
won most of NASA's development funds.
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The companies retain ownership of their vehicles and can sell rides
to customers outside of NASA, including private tourists.
“The work that we have underway … is making the possibility for
everyone to someday see our planet Earth from space,” said Kennedy
Space Center director and former astronaut Bob Cabana.
"I know a lot of us are cheering on the success of our Commercial
Crew program, not because of what it means to NASA … but what it
means to human spaceflight for everyone."
The program is based on a public-private partnership that created
two cargo lines to the station, a research laboratory that flies
about 260 miles (418 km) above Earth.
In addition to SpaceX, NASA has a $1.9 billion contract with Orbital
Sciences Corp for resupply missions.
For Boeing, the win in space is important symbolically, said
Christian Mayes, an industrials analyst at Edward Jones in St.
Louis, who rates Boeing stock a "hold."
"But financially, people need to come back to Earth," said Mayes.
Boeing's space and network businesses contribute less than 10
percent of total revenue, and a $4.2 billion contract over multiple
years "is not going to move the needle," he added.
Boeing shares closed about 0.8 percent higher.
(Additional reporting by Alwyn Scott in New York; Editing by Ros
Krasny, Sandra Maler and Grant McCool)
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