Grounded: Left behind in the contracting race to restore Americans to space

This animation shows what Sierra Nevada Corp.'s Dream Chaser shuttle would look like launching, docking with the space station and landing on a runway. (Sierra Nevada Corporation)

They had been waiting for this moment for the better part of a decade the announcement from NASA on who would build the next spaceship to take astronauts to the International Space Station.

Sierra Nevada Corp., a more than 3,000-person outfit headquartered in Nevada, was a distinct underdog. Its competitors were Boeing, which traces its space legacy to the Apollo, Gemini and Mercury programs, and SpaceX, the brash upstart founded by billionaire Elon Musk that became the first private company to resupply the space station.

But the executives at the Sierra Nevada had built something they considered ground-breaking: a sporty space plane called the Dream Chaser that looked like a miniature version of the shuttle and gave them confidence they would win the contract, potentially worth billions of dollars.

It was also a chance to make history by restoring Americas ability to launch its own astronauts from U.S. soil, ending reliance on Russia, to which the United States has paid hundreds of millions of dollars for trips to the space station since the shuttle was retired in 2011.

On the day of the contract announcement, Mark Sirangelo, director of the companys space program, took the call at his desk. It was not good news. Like a death in the family, he would later say.

And so Sierra Nevada entered a realm particular to the world of government contracting: that of the big-time corporate loser.

Ford will survive if someone decides to buy a Chevrolet, and it wont break Dennys if you eat breakfast at IHOP. But the stakes are higher for contractors who put everything on the line in a marketplace dominated by a single customer: the federal government.

The losers locker room is a scene of despair, anger, calls for litigious revenge. There is lost revenue, sometimes layoffs, even bankruptcy. In Sierra Nevadas case, it had a spaceship suddenly in search of a mission and now even more pressure to find a customer to fly it.

As federal procurement spending has been cut dramatically by almost $100 billion between 2010 and last year the stakes have only climbed. Having to absorb defeat with less business to fall back on is driving a wave of industry consolidation, and many contractors are looking to foreign governments and the commercial sector to help offset the losses.

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Grounded: Left behind in the contracting race to restore Americans to space