The agency in a statement said it will discontinue the On-orbit Servicing, Assembly and Manufacturing 1 project after nearly a decade of work due to "continued technical, cost, and schedule challenges, and a broader community evolution away from refueling unprepared spacecraft, which has led to a lack of a committed partner."
The program's lead contractor, Maxar, told CNBC, "while we are disappointed by the decision to discontinue the program, we are committed to supporting NASA in pursuing potential new partnerships or alternative hardware uses as they complete the shutdown."
OSAM-1 has been in development since 2015 with the goal of assisting the U.S.-owned Landsat 7 imagery satellite by refueling and repairing it in orbit to extend its life.
NASA's Goddard Space Flight Center in Greenbelt, Md., was heading the project, with Maxar Space Systems as the main contractor under multiple deals.
The spacecraft would have utilized an attached Space Infrastructure Dexterous Robot (SPIDER) to refuel the Landsat, assemble a communications antenna and demonstrate in-space manufacture of a 32-foot carbon fiber composite beam to verify the capability of constructing large spacecraft structures in orbit.
The agency previously expressed hopes that the program would demonstrate its servicing technologies could be used in other NASA missions and even transfer OSAM-1 technologies to commercial entities and jumpstart a new domestic servicing industry projected to be worth $5 billion by 2030.
An audit from NASA's Inspector General, however, found OSAM-1 was on track to exceed the projected $2.05 billion budget and would not make its December 2026 launch date, laying the blame on the "poor performance of Maxar."
"NASA and Maxar officials acknowledged that Maxar underestimated the scope and complexity of the work, lacked full understanding of NASA technical requirements, and were deficient in necessary expertise," the report read.
The report also noted Maxar was "no longer profiting from their work on OSAM-1,″ after which the project appeared not "to be a high priority for Maxar in terms of the quality of its staffing."
OSAM-1's cancellation comes after Maxar delivered the spacecraft and SPIDER housing unit to the Goddard center in September. Other major components, such as a robotic servicing arm, SPIDER and SPIDER's modular antenna, were not yet finished.
NASA said it is reviewing how to mitigate the impact of the project's shuttering on its Goddard center workforce.
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