Northrop Grumman reported on failed HALO module contract
Northrop Grumman suffered losses of more than $100 million in the program to create a module for the lunar station, a contract for which was signed with the American space agency NASA. In its fourth quarter and full year 2023 earnings report released on January 25, the company disclosed unsuccessful contract adjustments related to the HALO module for the Lunar Gateway station.
The first adjustment of $36 million was made in the second quarter, and the second, of $42 million, was made in the fourth. Thus, the total amount of losses for the year, taking into account adjustments and additional expenses, reached $100 million. The company attributed the losses to increased costs caused by changes in the architecture and requirements for the Lunar Gateway station, as well as macroeconomic issues. Northrop Grumman cited the same reason when announcing the first contract adjustment.
Northrop Grumman received a $935 million contract from NASA in July 2021 to build the HALO module, based on the Cygnus cargo spacecraft. HALO will provide housing at the Lunar Gateway Station and will have multiple docking ports for Orion and lunar landers, as well as additional modules provided by international partners. HALO will be launched alongside a Maxar module using a Falcon Heavy rocket.
Last July, company executives said they were able to reduce the risk of design changes by doing initial work on the HALO module under cost-based contracts before accepting a fixed-price contract. However, as Northrop Grumman CEO Katie Warden explained, the requirements for the HALO project turned out to be less stable than expected, and the company is currently under pressure to manage change.
Saying that the company has learned some lessons from Project HALO, Worden noted that Northrop Grumman is taking a more cautious approach to new fixed-price contracts.
NASA planned to launch the HALO module and Lunar Gateway in October 2025 as part of the Artemis mission. However, at a press conference on January 9, it was announced that the launch of the next two Artemis missions would be delayed by almost a year, and the launch of the Gateway station could be delayed separately indefinitely. NASA is currently working with manufacturers Maxar and Northrop Grumman to revise the module delivery schedule ahead of the Artemis 4 mission, scheduled no earlier than September 2028.