Firm to Waive Profit on Shuttle Booster Repairs

The builder of the booster rocket that doomed the space shuttle Challenger has voluntarily accepted a $10-million reduction in its fees and agreed to take no profit from $409-million worth of work that is required to fix future rockets, NASA announced Tuesday.

The agreement avoids lawsuits involving the National Aeronautics and Space Administration and Morton Thiokol Inc. growing out of the Jan. 28, 1986, accident that destroyed the shuttle and killed its crew of seven.

“Both NASA and Morton Thiokol believed it was in the best interest of all concerned to resolve the matters without resorting to lengthy and expensive litigation,” a space agency statement said.

Acts as Sole Supplier

Morton Thiokol is the sole supplier of the reusable solid-fuel booster rockets that provide 80% of the power to get space shuttles into orbit. A leak of hot gases from a joint in Challenger’s right booster is blamed for the explosion.

The contract under which the boosters were built included a $10-million fee penalty that could be invoked for such a failure.

NASA said that, as a result of the firm’s voluntary reduction of its fees, “it is unnecessary for NASA to further consider a levy of the fee penalty.”

“Further, Morton Thiokol will perform, at no profit, approximately $409-million worth of work required to fix the faulty joints, rework existing hardware to include the design fix and to replace the reusable motor hardware lost in the Challenger accident.”

Will Finish Contract Work

Morton Thiokol will complete contract work remaining at the time of the accident, plus additional work ordered that was not connected with the accident. That part of the work will cost about $487 million, and Thiokol’s profits will be based on its performance.

In the agreement, there was “no admission by Morton Thiokol nor determination by NASA as to Morton Thiokol’s responsibility or liability for the accident,” said Thomas Russell, a vice president and spokesman for the rocket builder.