DATE: Tuesday, August 19, 1997              TAG: 9708190299

SECTION: BUSINESS                PAGE: D1   EDITION: FINAL 

SOURCE: BY AKWELI PARKER, STAFF WRITER 

DATELINE: HAMPTON                           LENGTH:   74 lines

HAMPTON SPACE COMPANY HOPES TO SEE PROFITS SOAR SPACETEC AND HOUSTON-BASED UNITED SPACE ALLIANCE ARE BANKING ON COMMERCIAL SHUTTLE VENTURES

There was a time when the only people launching satellites were government researchers or rich multimedia magnates.

OK, so times haven't changed much - but they will soon, say two companies bullish on the profit potential for space.

Hampton-based SpaceTec has signed an agreement with Houston-based United Space Alliance to get commercial space shuttle shots off the ground.

Their goal: to transform the shuttle from a bureaucratic program, dependent on congressional largesse, into a privately run, fly-for-profit endeavor that's cheap enough to broaden access to space.

``NASA can't continue to float all the bills,'' said SpaceTec President Howard Warren. The Peninsula firm started out 12 years ago with three employees and used to get most of its work from the government - NASA. Today it employs 45 and gets about 60 percent of its work from commercial clients.

Ventures like United Space Alliance and SpaceTec are betting they can put payloads into space ``faster, better and cheaper'' than the National Aeronautics and Space Administration.

NASA agrees, saying that outsourcing relatively routine chores like shuttle launches will free the agency to focus on its core mission of research and development. For instance, the agency would like to devote more resources to next-generation space projects, like reusable launch vehicles to replace the shuttle in the next century.

``Our plans are to market our expertise on an international basis,'' Warren said.

SpaceTec will seek out customers with ``candidate payloads'' and handle their needs, from wading through paperwork to designing the container in which the payload goes aloft.

``What you've got to do is get away from the traditional way NASA has done business in the past,'' said Warren.

``In other words, cut some of the red tape out of it.''

For companies eager to get their bird in the air, red tape can mean lost revenue. But United Space Alliance is blowtorching bureaucracy like the atmosphere sizzles meteors.

The company has merged nearly half a dozen payroll, accounting and benefit systems into one and is on track to beat the $400 million it had estimated it would save the shuttle program over a six-year period.

In most industries, cost-cutting carries with it concerns about relaxed safety standards, and space is no exception. But both companies said it's in their best interests to prioritize safety: For one thing, their contract forces them to operate to high safety standards, with stiff penalties if they don't.

With SpaceTec handling the back-office minutiae, a payload customer basically gets one-stop shopping - as opposed to the time-consuming scavenger hunt of going directly through NASA.

Having more than a decade of space know-how, SpaceTec was an attractive partner for 10,000-employee United Space Alliance.

``You look for companies that have entrepreneurial experience in the development of space technologies, service and operations,'' said Jeff Carr, a spokesman for United Space Alliance in Texas.

United Space Alliance consists of partners Boeing North American of Seattle and Bethesda, Md.-based Lockheed Martin. NASA tapped United Space Alliance in 1996 to take over operation of space shuttle operations.

Since then, the joint industry venture has been waving the banner for commercial use of the shuttle and looking for companies - like SpaceTec - to sniff out and work with payload candidates worldwide.

United Space Alliance's other payload development partner so far is Vienna-based SpaceHab, but the Houston-based company said it's constantly looking for other partners to preach the privatization gospel.

Said Carr, ``We're just scratching the surface right now.'' ILLUSTRATION: ASSOCIATED PRESS/File color photo

The shuttle Columbia lifts off during an April launch at Kennedy

Space Center. Hampton-based SpaceTec is hoping that privatization

offers plenty of space for turning a profit.

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