NASA ceases $2 billion satellite refueling project following Maxar’s performance critique

NASA is discontinuing a $2 billion endeavor aimed at testing satellite refueling capabilities in space, it declared Friday, following criticism from the agency’s auditor directed at the principal contractor, Maxar, citing “poor performance.”

The space agency stated that the OSAM-1 — On-orbit Servicing, Assembly, and Manufacturing 1 — project is being terminated after nearly ten years of effort.

NASA underscored in its announcement “continued technical, cost, and schedule challenges, and a broader community evolution away from refueling unprepared spacecraft, which has led to a lack of a committed partner.”

The agency conveyed in a statement to CNBC that approximately 450 personnel are involved with OSAM-1, but NASA “is committed to supporting project workforce per plan through fiscal year 2024.”

OSAM-1 aimed to repair and refuel the Landsat 7 satellite for extended operational life. (Credits: Pexels)

“While we are disappointed by the decision to discontinue the program, we are committed to supporting NASA in pursuing potential new partnerships or alternative hardware uses as they complete the shutdown,” articulated Maxar Space Systems spokesperson Eric Glass in a statement to CNBC.

Maxar underwent privatization by private equity firm Advent International in May 2023 before being divided into two entities: Maxar Intelligence, concentrating on satellite imagery and analytics, and Maxar Space Systems, focusing on spacecraft manufacturing.

NASA’s Goddard Space Flight Center in Maryland spearheaded the efforts on OSAM-1, with Maxar Space Systems serving as the project’s primary contractor through multiple agreements. OSAM-1 has been in the works since 2015, aiming to rendezvous with the U.S.-owned Landsat 7 imagery satellite in orbit, intending to repair and refuel the aging spacecraft to prolong its operational life.

However, OSAM-1 has lagged behind schedule by several years, while its costs to NASA have escalated. In a scathing report released in October, NASA’s Inspector General “found that project cost increases and schedule delays were primarily due to the poor performance of Maxar,” while also acknowledging challenges faced by NASA’s Goddard Center in key aspects of the project’s development.

“NASA and Maxar officials acknowledged that Maxar underestimated the scope and complexity of the work, lacked full understanding of NASA technical requirements, and were deficient in necessary expertise,” stated NASA’s Inspector General in its report, following a year-long comprehensive audit.

The agency’s auditor indicated that OSAM-1 was likely to surpass its current $2.05 billion price tag and the originally projected December 2026 launch date, which was already delayed by six years. The report, citing Maxar representatives, highlighted that the company was “no longer profiting from their work on OSAM-1” and, according to NASA, it no longer appeared “to be a high priority for Maxar in terms of the quality of its staffing.”

NASA’s decision to terminate OSAM-1 comes after Maxar delivered significant segments of the spacecraft to Goddard in Maryland, although other crucial components were still pending completion.

Satellite servicing represents a burgeoning sub-sector of the space industry, with Northrop Grumman’s extension missions serving as an early example of such endeavors.

Sajda Parveen
Sajda Parveen
Sajda Praveen is a market expert. She has over 6 years of experience in the field and she shares her expertise with readers. You can reach out to her at [email protected]
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