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Dollars from Heaven: Thousands of companies get pieces of NASA pie

Last of a three part series

Tuesday, February 18, 2003

By Patricia Sabatini, Post-Gazette Staff Writer

As the National Aeronautics and Space Administration has evolved, it has made an art out of privatization.

Today, about 90 percent of NASA's $15 billion annual budget, or about $12.7 billion, is spent outside the agency. And 70 percent of that amount -- or $9.2 billion in fiscal 2001 -- goes to businesses.

Thousands of companies from coast to coast share in a piece of that pie, including some in Pittsburgh, but the bulk of the work goes to just a handful of the nation's largest aerospace firms.


Dollars from Heaven

Online Graphic:
Spinoffs from Space

The Series

Day One
NASA spending hits wide area including Pa., W.Va. and Ohio

Day Two
NASA-funded research small but vital


In fiscal 2001, NASA awarded contracts for goods or services to nearly 3,000 companies in 918 cities spread across 49 states.

But of those firms, the top 100 received almost 90 percent of the dollars, and the top four contractors accounted for more than half the money NASA spent. While these top contractors derived a significant portion of their revenue from NASA, a steady diet of budget cuts in the space agency has meant that they and most other companies no longer rely on the space program as their main profit engine, analysts say.

Overall, Boeing is NASA's biggest contractor, followed by Lockheed Martin, United Space Alliance and Thiokol. Together, those four companies pulled in $4.9 billion of the $9.2 billion NASA spent in the private sector in fiscal 2001.

Chicago-based Boeing, the world's largest producer of commercial jets and the third biggest U.S. defense contractor, builds the shuttles' main engines and gets a portion of the profits from United Space Alliance, a 50-50 partnership between Boeing and Lockheed Martin that oversees NASA's shuttle operations and the International Space Station.

Some of Houston-based United Space's duties include astronaut and flight controller training, writing software code for the shuttles' engines and repairing and rebuilding shuttle parts. The company has been running the shuttle program since 1996, and has a contract to continue the work through September 2004.

These days, its main task is to maintain an aging fleet of shuttles that is now down to three vehicles, the newest of which is 11 years old.

With the destruction Feb. 1 of the Columbia, NASA's remaining shuttles are the Atlantis, Discovery and Endeavor.

The newest is the Endeavor, which was built to replace the Challenger, which blew up in 1986. It cost roughly $2 billion and made its first flight in 1992.

Although United Space farms out shuttle work to roughly120 subcontractors, most of that business also goes to Boeing.

Bethesda, Md.-based Lockheed Martin's main duties include producing the giant external fuel tanks for the space shuttles and managing data collection, including telemetry and communications.

The No. 4 NASA contractor, Thiokol, a unit of Alliant Techsystems, makes the rocket boosters used to launch the shuttles.

For a short time, Thiokol was owned by Pittsburgh-based aluminum giant Alcoa, having been acquired in 2000 as part of Alcoa's purchase of Cordant Technologies. Alcoa sold Thiokol to Alliant in 2001.

In recent years, NASA's tentacles have reached deeper into Pittsburgh, although none of the local contracts is very large.

Since the late 1990s, the agency has awarded contracts to at least a half-dozen Pittsburgh area companies, including Alcoa, Allegheny Technologies, Ansoft, Calgon Carbon, Fisher Scientific and II-VI Inc.

The largest chunk of business went to Saxonburg-based II-VI, a maker of optical parts for high-powered lasers.

Over a two-year period, II-VI, whose name comes from groups II and VI in the periodic table of elements, sold NASA $1.3 million worth of special materials used to make radiation detectors. The detectors will be used to determine the origin of gamma-ray bursts in space, the largest known explosions in the universe.

The detectors are to be placed in the orbiting Burst Alert Telescope on NASA's gamma burst observatory, set for launch in December. Among the mission's goals is to use these readings to study the early universe.

The II-VI contract, which was completed in late 2001, was a relatively small one for the company, representing less than 1 percent of II-VI's revenues. Still, the opportunity to work with NASA was exciting, spokesman Craig Creaturo said.

"Getting a chance to get in on a program like that and study this [gamma-ray] phenomenon was pretty interesting to us."

The next largest pieces of business went to Calgon Carbon, whose Canadian subsidiary secured a $502,000 order for water purification equipment, and Allegheny Technologies, which won a $432,000 contract for fabricated metal products.

Small orders were placed with Alcoa (for $162,000 worth of aluminum products), Ansoft ($69,000 worth of software), and Fisher Scientific ($27,000 worth of measuring equipment).

Patricia Sabatini can be reached at psabatini@post-gazette.com or 412-263-3066.

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