NASA cuts Boeing from competition for delivery rights to International Space Station

U.S. space agency NASA has dropped Boeing Co from a multibillion-dollar competition to fly cargo to the International Space Station and will delay selecting one or more winners for about two months, officials said on Thursday.

Losing the contract is another blow to Boeing's defense, space and security business, coming days after Boeing lost the Long Range Strike Bomber competition, a major Pentagon contract estimated to be worth up to $80 billion.

Boeing was offering an unmanned version of its Starliner CST-100 space taxi, under development as part of a separate NASA $4.2 billion program to transport crew to the space station.

“We received a letter from NASA and are out of CRS-2,” Boeing spokeswoman Kelly Kaplan wrote in an email, referring to NASA’s Commercial Resupply Services contract. Boeing had previously suggested that its entry could have future uses for private customers as well.

“I don’t think we'll know the ‘why’ until our debrief with NASA,” she added.

NASA, which had been expected to announce the competition winners on Thursday, declined to comment on its reasons for dropping Boeing, citing a communications blackout while it evaluates bids. Spokeswoman Kathryn Hambleton said the contract award date had been pushed back to January 30, 2016, to give the agency time to evaluate all the proposals.

"This is a very complex procurement," she said.

NASA previously said it intended to award multiple contracts, each including at least six cargo flights to and from the station, a $100 billion research laboratory that flies about 250 miles (400 km) above Earth.

Thursday’s delay was the third postponement in the hard-fought competition, which has already seen a bid by Lockheed Martin Corp excluded, according to industry sources.

Lockheed declined to comment.

Orbital ATK Inc and privately owned SpaceX hold station cargo delivery contracts worth more than $3.5 billion. Both are proposing extensions of their existing technologies, in contrast to the proposals from Boeing, Lockheed and privately owned Sierra Nevada Corp, which proposed entirely new vehicles.

Sierra Nevada said it was informed by NASA on Thursday that it remains in the running for the competition.

Orbital confirmed it was still in the running for a follow-on contract. SpaceX declined to comment.

Both companies are recovering from launch accidents, which may be playing a role in NASA’s protracted assessment of the proposals.

SpaceX is slated to resume flying its Falcon 9 rocket in December, following an explosion on June 28 that claimed a load of station cargo.

The company is slated to launch a communications satellite on its return-to-flight mission and is not expected to make another station cargo run until January at the earliest.

Orbital dumped the troubled Soviet-era engines, which were refurbished and sold by Aerojet Rocketdyne Holdings Inc, that powered its Antares rocket, which crashed in October 2014 on the way to the space station.

Orbital is refitting the Antares with new Russian-made rockets and its scheduled to resume flights in the spring.

Meanwhile, the company has purchased two Atlas 5 rocket launchers from United Launch Alliance, a partnership of Lockheed and Boeing, to fly cargo capsules to the station in December and early next year.

(Reporting by Irene Klotz; Additional reporting by Alwyn Scott; Editing by Christian Plumb)