NASA Cancels $2 Billion Satellite Refueling Project Amid Contractor Woes and Shifting Priorities

In a surprising turn of events, NASA announced the termination of its ambitious $2 billion On-orbit Servicing, Assembly, and Manufacturing 1 (OSAM-1) project this Friday, marking the end of nearly a decade's endeavor to pioneer satellite refueling in space. The decision follows critical remarks from NASA’s Inspector General regarding the project’s main contractor, Maxar, over its "poor performance".

Initiated in 2015, OSAM-1 aimed to demonstrate the feasibility of docking with and servicing the U.S.-owned Landsat 7 imagery satellite, thereby extending its operational life. However, the project, led by NASA’s Goddard Space Flight Center in Maryland with Maxar Space Systems as the prime contractor, has faced significant setbacks, including severe cost overruns and delays.

The NASA Inspector General’s October report highlighted that the project's escalating costs and lagging schedule were largely attributed to Maxar’s underestimation of the project's complexity and their lack of necessary expertise. Despite the delivery of major spacecraft segments to Goddard, incomplete components and unresolved technical issues led to a bleak outlook, with projections suggesting the project would surpass both its $2.05 billion budget and its already delayed December 2026 launch target.

Compounding the project's woes, the space community has evolved to prioritize alternative strategies over refueling unprepared spacecraft, diminishing the potential for a committed partnership that could justify continuing the OSAM-1 mission.

NASA, acknowledging the challenges of "continued technical, cost, and schedule challenges," is now exploring new partnerships and alternative applications for the developed hardware, with a commitment to support the approximately 450 personnel involved through the fiscal year 2024.

Maxar, acquired by Advent International in May 2023 and subsequently divided into Maxar Intelligence and Maxar Space Systems, expressed disappointment over the program's discontinuation but remains dedicated to assisting NASA in the project's orderly shutdown.

The cancellation of OSAM-1 underscores the complexities and uncertainties inherent in pioneering space technologies, while also highlighting the critical importance of contractor performance and adaptive strategic planning in the execution of ambitious space missions.