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NASA shuts down $2 billion satellite refueling project after contractor Maxar comes under fire for poor performance


A “grapple test” of the OSAM-1 spacecraft’s robotic maintenance arm.


NASA announced on Friday that it was halting a $2 billion project to test refueling satellites in space, after the agency’s auditor criticized the program’s main contractor, Maxar, citing his “poor performance”.

The space agency said in a statement that the OSAM-1 project – On-Orbit Service, Assembly and Manufacturing 1 – was being discontinued after nearly a decade of work.

NASA cited in its announcement “continuing technical, cost and schedule challenges, as well as a broader community shift away from refueling unprepared spacecraft, which has leads to a lack of a committed partner.”

The agency said in a statement to CNBC that about 450 people support OSAM-1, but that NASA is “committed to supporting the project workforce by plan through fiscal year 2024.”

“While we are disappointed by the decision to discontinue the program, we are committed to supporting NASA in exploring potential new partnerships or alternative uses of the hardware as it completes the shutdown,” Eric said Glass, a spokesperson for Maxar Space Systems, in a statement to CNBC.

Maxar was privatized by private equity firm Advent International in May 2023 before being split into two businesses: Maxar Intelligence, focused on satellite imaging and analysis, and Maxar Space Systems, focused on spacecraft manufacturing.

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NASA’s Goddard Space Flight Center in Maryland led work on OSAM-1, with Maxar Space Systems as the project’s prime contractor under several agreements. OSAM-1 has been in development since 2015, with the aim of docking in orbit with the US imaging satellite Landsat 7, to repair and refuel the aging spacecraft to extend its lifespan.

But OSAM-1 fell years behind schedule, while the program’s cost to NASA skyrocketed. In a scathing October reportNASA’s inspector general “found that project cost increases and schedule delays were primarily due to poor performance by Maxar”, while noting that the agency’s Goddard Center also struggled with key elements of development.

“NASA and Maxar officials acknowledged that Maxar underestimated the scope and complexity of the work, did not fully understand NASA’s technical requirements, and lacked the necessary expertise,” the inspector general said of NASA in its report, following a year-long audit.

The agency’s auditor noted that OSAM-1 was likely to “exceed its current price tag of $2.05 billion and launch date of December 2026,” which was already six years late. The report, citing Maxar representatives, noted that the company was “no longer profiting from its work on OSAM-1” and that, from NASA’s perspective, it no longer appeared “to be a high priority for Maxar in terms of quality of its staff. “

NASA’s cancellation of OSAM-1 comes months after Maxar delivered major segments of the spacecraft in Goddard, Maryland – but other key elements were not yet complete.

Satellite servicing is a nascent sub-sector of the space industry that has only recently begun to prove itself, with Northrop Grumman’s extension missions representing a first effort.

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