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NASA warns Rocketplane Kistler on COTS cancellation

Rocketplane Kistler's contract with NASA to demonstrate commercial transportation services to support the International Space Station has been threatened with cancellation.

NASA says associate administrator for exploration systems Scott Horowitz has formally notified the company that it has failed to perform under its Space Act agreement with the agency.

Under its Commercial Orbital Transportation Services (COTS) programme, NASA signed agreements with Rocketplane Kistler (RpK) and Space Exploration Technologies (SpaceX) in August 2006.

NASA says RpK has failed to complete two milestones under its agreement: Milestone 4, a second round of private fundraising; and Milestone 5, a critical design review for its pressurised cargo module.

The agency says it is required to provide written notice at least 30 days in advance of terminating the agreement for failure to perform, which includes failing to meet agreed milestones.

Originally RpK's plan was to raise $416 million in financing by February 2008, in three rounds. It secured an initial $40 million from its strategic partners, leaving it with $376 million to raise in the second and third rounds.

But in February 2007, NASA and RpK renegotiated the financial milestones, combining the second and third financing tranches into a single round worth $500 million, to be completed by May of this year.

In June, after failing to complete the combined, final round of financing, RpK told NASA it had secured significant commitments for lead investors and would complete Milestone 4 by the end of July, the agency says.

RpK missed the July target, but told NASA it was continuing fundraising efforts with several interested investors, the agency says. Then in August the company informed NASA it had failed to meet Milestone 5, the critical design review, and had been forced to suspend all technical work because of funding challenges.

The agency says Horowitz sent the letter warning of possible termination on 7 September, but emphasises:  "NASA has not terminated its relationship with RpK and has not finalised a decision whether to do so."

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