WASHINGTON — Northrop Grumman has filed a new claim on its contract to build modules for NASA’s Lunar Gateway, pushing the program’s annual losses to $100 million.
In its fourth-quarter and full-year 2023 earnings release on January 25, the company disclosed an “unfavorable EAC” of $42 million. [estimate at completion] An “adjustment” is included in the contract to build the Gateway Habitat and Logistics Outpost (HALO) module. The company said it recorded a similar $36 million bill in the second quarter, bringing total annual billings under the contract to $100 million.
The company blamed the charges primarily on “increased costs due to the combination of macroeconomic challenges with the evolving Lunar Gateway architecture and mission requirements.” The company provided a similar explanation when it reported the charges in the second quarter.
Northrop received a $935 million firm-fixed-price contract from NASA in July 2021 to build a module based on the company’s Cygnus cargo spacecraft. HALO will provide initial habitat on the Gateway and include several docking ports for visiting Orion spacecraft and lunar landers, as well as additional modules provided by international partners. It will be launched aboard a Falcon Heavy with power and propulsion elements (PPE) manufactured by Maxar.
When Northrop reported its second-quarter billings in July, company executives said they would reduce the risk of design changes by doing initial work on HALO on a cost-plus contract before accepting a fixed-price contract to produce HALO. He said he thought he did.
“Regarding the HALO program, we have found that the requirements are not as stable as we and the government had anticipated, and we are looking forward to future change management,” said Northrop Grumman CEO Kathy Worden. We are working with the government to address this.” she said at an earnings conference in July.
Worden mentioned the most recent bill during the company’s latest earnings call, but the conference call featured a discussion of a much higher bill the company took out on a production contract for the B-21 stealth bomber. accounted for the majority. “We have programs like HALO, and we’ve certainly learned some additional lessons and are leveraging them moving forward,” she said.
Northrop generally takes a more cautious approach when bidding on fixed-price contracts, she said. “We take a different approach when considering fixed price, and if the customer chooses fixed price, we either reject the bid or, in the case of SDA Tranche 2, we offer a price we have in mind. As it was fair and reasonable, the customer decided not to negotiate further with us.”
On January 16, the Space Development Agency awarded contracts to L3Harris, Lockheed Martin, and Sierra Space for two tracking layer tranches of missile tracking satellites totaling approximately $2.5 billion. Northrop had won a contract to provide some of the satellites for Tracking Layer Tranche 1 in 2022.
NASA had been working toward an October 2025 launch of HALO and PPE, but the agency’s Jan. 9 announcement that it would postpone the next two Artemis missions by nearly a year also included the launch of the first Gateway element. There may be additional delays.
“We are currently working with our industry partners at Maxar and Northrop Grumman to develop a schedule for when it would make sense to launch before Artemis 4,” said NASA Deputy Administrator Amit Kshatriya. said. He announced the delay in the Moon-to-Mars mission during a call with reporters. “We believe they have a great path to get there to support that mission, but we will update that schedule.”