NASA has selected a number of companies to enter into competitive negotiations for the Space Launch Initiative (SLI). As defined in the President's budget blueprint for the Agency, the Space Launch Initiative provides commercial industry with the opportunity to meet NASA's future launch needs, including human access to space, with new launch vehicles that promise to dramatically reduce cost and improve safety and reliability. The primary focus of the Space Launch Initiative is on technology development for concepts that would be able to launch payloads for NASA, commercial and military missions and be able to fly crew to and from the International Space Station. Satellite delivery and future International Space Station support are the primary set of requirements for the new system and would include elements like crew transfer vehicles, reusable launch vehicles and orbital transfer systems. NASA also announced today it will not add Space Launch Initiative funds to the X-33 or X-34 programs. As a result, the current X-33 program will come to completion when the cooperative agreement between NASA and Lockheed Martin expires on March 31, unless Lockheed Martin chooses to go forward with the program with its own funds. NASA is in the process of ending its X-34 contract with Orbital Sciences Corp. of Dulles, VA. Continuation of both programs had depended upon their successfully competing for Space Launch Initiative funding under a NASA Research Announcement that will lead to award of some $900 million over the next two-and-a-half years. That solicitation was issued in October 2000, and industry proposals submitted in December 2000. Contract awards could be awarded as early as April, but none of those negotiations will include X-33 or X-34. NASA determined that the benefits to be derived from flight testing these X-vehicles did not warrant the magnitude of government investment required and that SLI funds should be applied to higher priority needs. More than 300 personnel from throughout NASA participated in the SLI proposal evaluation process. "This has been a very tough decision but we think it is the right business decision," said Art Stephenson, Director of NASA's Marshall Space Flight Center, Huntsville, AL. Marshall manages the SLI, X-33 and X-34 programs for NASA. "We have gained a tremendous amount of knowledge from these X-programs, but one of the things we have learned is that our technology has not yet advanced to the point that we can successfully develop a new reusable launch vehicle that substantially improves safety, reliability and affordability." "The Space Launch Initiative will take us to that point. It is a comprehensive, long-range plan to promote commercial development and civil exploration of space and provides the strategy and funding to enable at least two competing architectures for full-scale development of a 2nd generation reusable launch vehicle by mid-decade," added Stephenson. "Through focused risk-reduction activities and risk-reduction technology development, we will make significant improvements in safety, reliability and affordability over the launch capability we have today. A new launch system that meets these goals could begin operating early in the next decade." NASA began the X-33 program in 1996 as part of its Reusable Launch Vehicle program. It called for the demonstration of a subscale single-stage-to-orbit vehicle, one that would go from launch stand to orbit without using multiple stages as the Saturn moon rocket did or dropping rocket motors and fuel tank like the Space Shuttle. Using composite materials to reduce vehicle weight is one of the keys to successfully developing a single-stage-to-orbit launch vehicle. In November 1999 the X-33's composite liquid hydrogen fuel tank failed during testing. An investigation into the cause of the failure revealed that composite technology was not mature enough for such a use. Lockheed Martin proposed to complete development of the X-33 by replacing its two composite liquid hydrogen tanks with aluminum tanks. NASA agreed to permit them to compete for SLI funding to do so. But the benefits of testing the X-33 in flight did not justify the cost. NASA investment in the X-33 program totaled $912 million, staying within its 1996 budget projection for the program. Lockheed Martin originally committed to invest $212 million in the X-33, and during the life of the program increased that amount to $357 million. The X-34 program also was initiated in 1996, to provide a low- cost technology test bed that would demonstrate a streamlined management approach with a rapid development schedule and limited testing. A joint NASA/Orbital Sciences Corporation review of the project last year revealed the need to redefine the project's approach, scope, budget and schedule. To ensure safety and mission success of the X-34 it became necessary to increase Government technical insight, hardware testing and integrated systems assessments. As a result, the projected cost of completing the X-34 program at an acceptable level of risk rose significantly above the planned budget. NASA decided that such additional funding for X-34 risk reduction would have to be competed within the SLI evaluation process. As with X-33, NASA determined that the benefits to be derived from continuing the X-34 program did not justify the cost.