Award of Space Station Contract Eagerly Awaited : McDonnell Douglas, Rockwell Seeking Job

Times Staff Writer

It's a high-stakes contest involving many of America's aerospace and electronics elite, with billions of dollars in prize money to be awarded in the weeks ahead.

The winners will get the right to build a fragile-looking structure the length of a football field that will serve as America's first permanent outpost in space and a possible launching pad for exploratory missions to the moon and Mars.

Assembly of the space station isn't scheduled to begin until 1994. But the countdown for McDonnell Douglas employees in Huntington Beach began last July when the company submitted its bid to the National Aeronautics and Space Administration.

McDonnell Douglas is heading one of two multicompany teams competing for a space station contract with an expected value of more than $3 billion. Another aerospace giant, Rockwell International, captains the other team.

At the same time several other consortiums are vying to build other portions of the space station project, which is expected to carry a total price tag exceeding $14 billion.

No matter which team gets the principal contract, the space station is expected to generate hundreds of new jobs in Orange County.

With the space agency expected to announce the winning bidders soon, "it's pins and needles time," said Robert F. Thompson, vice president of McDonnell Douglas' space station division.

For the winner, the contract means prestige, pride and, of course, profits. The successful bidder is not only assured of a leading role in the next era of manned space exploration, but it also will have an edge in the competition for future programs, such as the potential colonization of the moon or a manned mission to Mars.

"This is the first opportunity to get into a manned space program since the space shuttle was initiated over 10 years ago," said John MacGregor, a senior manager in McDonnell Douglas' space station unit. "It will be at least 10 years before we see a similar opportunity."

The National Aeronautics and Space Administration had been expected to declare the winners in early November. But as the expected announcement date neared, NASA Administrator James C. Fletcher unexpectedly postponed the decision for several weeks.

That means more "nervous time" for employees at Rockwell's space station division in Downey, said Seymour Z. Rubenstein, division president. "Most of the people working on the program have put in three years of long, intensive effort," he said. "They want the opportunity to build it." As currently planned, the space station is expected to be operational by 1996 at a cost of $14.6 billion in 1988 dollars, according to NASA estimates. However, some critics have said the orbiting station is likely to cost much more.

The space station is designed to be used for decades and expandable as the need arises. Astronauts and robots would assemble the complex lattice-like structure from parts carried aloft in a series of 20 space shuttle launches scheduled to begin in 1994.

The station would accommodate a crew of six to eight people, who would live in two cylindrical modules measuring 14 by 45 feet. The orbiting outpost would have an expected life span of 30 to 40 years and serve as a laboratory for public and private research ventures, as well as a home base for exploratory space missions in the 21st Century.

Last July, four teams consisting of America's aerospace elite submitted their bids on two space station contracts dubbed "work package one" and "work package two." McDonnell Douglas alone delivered about 20 tons of documents to the Johnson Space Center in Houston, which is overseeing the second work package.

Work package one, which encompasses construction of the space station's living and work quarters, is the subject of bids submitted by teams headed by Martin Marietta and Boeing. McDonnell Douglas is a member of the Martin Marietta group.

Work package two, for which the McDonnell Douglas and Rockwell groups are the lead bidders, involves construction of the station's external framework and internal systems, such as "resource nodes" connecting work areas, air locks enabling astronauts to enter and exit and systems for data management, communications, tracking and thermal control.

Rockwell's teammates are Grumman, Harris, Sperry, TRW, Intermetrics and United Technologies. The McDonnell Douglas team includes IBM, Honeywell, Lockheed, RCA and Astro Aerospace.

The process of selecting the other companies "is kind of like putting together a good football team," McDonnell Douglas' Thompson said. "You go find yourself a good halfback, a good split end and a good wide receiver." McDonnell Douglas contends that its team, with such big-name players as IBM and Lockheed, has helped erase the underdog image it had when the competition began. Rockwell was perceived as the initial front-runner because it had built the command modules for the Apollo program and the orbiters for the Columbia and Challenger space shuttle programs.

McDonnell Douglas, which worked on the Mercury and Gemini programs and also built the Skylab space station, lost out to Rockwell for the space shuttle contract awarded in the 1970s. McDonnell Douglas won a much smaller contract to build rocket boosters to launch satellites from the shuttle.

The McDonnell Douglas and Rockwell teams are believed to have spent in excess of $100 million each in the initial space station design and development or everything from a wet trash compactor for the station's galley to the robots that will help assemble the station.

A Washington-based newsletter, Space Station News and Advanced Space Technology, reported in late October that McDonnell Douglas had the edge in the competition because it had submitted a lower bid than Rockwell. The report, which cited unidentified industry sources, said both bidders' management and technical presentations were perceived as a draw.

McDonnell Douglas and Rockwell officials declined to comment on the report.

No matter which team wins, Southern California can't lose.

Both McDonnell Douglas and Rockwell expect to boost their Southern California employment by as many as 1,000 people if they receive the contract.

McDonnell Douglas expects to add 2,000 to 3,000 workers at several of its U.S. facilities, with about 1,000 of those in Huntington Beach. "It's going to be important to the economic future of Orange County that the work is done here," Thompson asserted.

McDonnell Douglas' Huntington Beach unit would receive more than $1 billion in new revenue over a 10-year period if the company wins the contract. At its peak, the program could generate as much as $200 million annually for the Orange County unit.

Although $200 million in additional revenue is not overwhelming for a company with more than $12 billion in annual sales, the space station represents a promising growth area for the St. Louis-based aerospace giant.

McDonnell Douglas doesn't plan a major layoff in Huntington Beach if it loses the competition, but "we would expect an awful lot of disappointment," Thompson said. He said manufacturing activity is stable at the Huntington Beach facility, noting that the site is gearing up for a $317-million contract to build seven Delta II rockets for the Air Force.

If Rockwell gets the contract, it expects its space station division employment to peak at 2,000 in the 1990s, with about 1,500 of those at company facilities in Anaheim, Downey and Los Angeles.

Rockwell already employs more than 600 people in its Downey space station division. "If we do not win," Rubenstein explained, "they will not work here, period." The company would attempt to reassign those workers to other company sites, he said.

The station project is important for both companies as a way to pick up the slack as major defense programs begin to wind down. Some of McDonnell Douglas' big-ticket programs, such as construction of combat aircraft, are gradually being phased out. The same is true of Rockwell's work on the B-1 bomber program.

Moreover, after significant increases in defense spending through most of the 1980s, Congress is likely to be funding fewer big military programs in the future.

Aerospace company officials contend that more than just dollars and jobs are at stake. They said the space station program is a key test of America's ability to remain a leader in space as international competition intensifies.

U.S. experts say the Soviets, whose Salyut space station was launched in 1971, have taken the lead in manned space exploration while the United States continues to cope with the setback caused by the Challenger space shuttle disaster in January, 1986. Japan, China and several European countries have also been making progress in their space programs.

"The thing you have to look at in today's world is, if you don't go ahead with these programs, where are you?" said Rockwell's Rubenstein. "If the U.S. doesn't move forward, it can only move backward." Officials of both companies expressed concern that political and budgetary issues may jeopardize the space station program. The station's design has been scaled down once because of concerns over its price.

"If people perceive that things cost more than they're worth, they don't want to do them," said McDonnell Douglas' Thompson. A study by the National Research Council has estimated that the total cost of the space station is likely to be between $17 billion and $21.5 billion in 1988 dollars--significantly more than the $14.6-billion NASA estimate.

But the council study covers certain costs that NASA doesn't include in its estimates, such as $1.8 billion for emergency rescue vehicles. It also assigns higher prices than NASA to some items; for example, the NASA budget includes only $200,000 to replace lost equipment, while the council estimates that those costs may range up to $1.7 billion.

Observers note that the recent stock market collapse has intensified pressures in Congress to cut federal spending to reduce the budget deficit.

"The space station will cost a substantial amount of money, and you're always nervous when they have a Wall Street crash, and they are saying, 'Cut the budget,' " NASA Administrator Fletcher said in a recent speech in Anaheim.

Fletcher said he anticipates pressure to cut NASA's budget, but he is "hopeful we can withstand that pressure."

House and Senate subcommittees have authorized fiscal 1988 space station outlays of $767 million, the full amount NASA requested. But most observers expect the final space station budget to wind up in the $600-million to $700-million range, which would force a further scaling back of the project.


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