Lockheed Martin officials have begun looking throughout the Orion crew-capsule program for savings that can be used to cover possible contract termination costs.
Those savings could include layoffs of some of the 600 to 650 Lockheed employees in Colorado who are working on the NASA spacecraft.
“We’re implementing a 20 percent adjustment across the program,” Lockheed spokeswoman Joan Underwood said Thursday. “We need to do some cost-cutting within the program as work continues.”
Cost efficiencies being implemented now include finding positions on other company programs for Orion workers and not purchasing hardware that isn’t needed yet.
“It’s possible there may be some layoffs that are unavoidable,” Underwood said. “We won’t know that for another week or so.”
The reductions stem from a proposed redirection for NASA and a new way that Lockheed says contract-termination liability is assigned.
In 2006, Lockheed Martin Space Systems, based in south Jefferson County, won a $3.9 billion initial-phase contract to design and build Orion. The spacecraft is part of NASA’s Constellation program that aims to return humans to the moon and beyond.
A federal fiscal-year 2011 budget proposed by President Barack Obama urges ending the Constellation program in favor of supporting commercial human spaceflight.
Under the plan, Orion would be revamped as an escape vehicle for the international space station. Obama also proposed spending $2.5 billion over two years to close down the Constellation program.
In late April, NASA notified Lockheed that contract-termination costs usually covered by the agency would be borne by the company.
No dollar amount has been announced.
“With this change in long-standing policy, we need to absorb the costs within the contract funds,” Underwood said.
On Wednesday, NASA Administrator Charles Bolden told a House committee that the Orion rescue vehicle could be ready in three to five years at a cost of $4.5 billion. A new development plan for Orion will be available for review next week, he said.
Ann Schrader: 303-954-1967 or firstname.lastname@example.org
The Denver Post