Spacehab Subsidiary Awarded $1.2 Million Spacecraft Facility Study

Houston, Texas (May 17, 2006) - SPACEHAB, Incorporated (NASDAQ: SPAB), a leading provider of commercial space services, announced today that its Astrotech Space Operations subsidiary has been awarded a $1.2 million contract to perform a feasibility study and preliminary design for government payload processing facilities.

The study calls for an engineering and concept development report for a new processing facility and associated infrastructure. Astrotech must complete its study and design efforts by September 2006. “The study contract could lead to the design and construction of the entire processing facility, an opportunity that would greatly enhance our existing coast-to-coast capabilities,” said Don White, Vice President of Astrotech.

Astrotech has extensive experience in designing, building, and operating spacecraft processing facilities. The Company’s Cape Canaveral location is situated on a 62-acre tract approximately three miles west of Kennedy Space Center, adjacent to the Spacecoast Regional Airport. This complex consists of nine major buildings dedicated to spacecraft non-hazardous processing, hazardous processing, payload storage, warehouse storage, and customer office accommodations. With over 150,000 ft2 of facility space, Astrotech processes virtually all U.S.-based commercial spacecraft at this location.

The Company also owns and operates a full-service facility for processing satellites and upper stages at Vandenberg Air Force Base. This 60-acre site supports expendable Atlas, Delta, Pegasus, and Taurus launches from the Western Range. The Astrotech team recently completed payload processing support at this location for NASA’s CloudSat and CALIPSO spacecraft. The satellites were launched onboard a Delta II rocket on a mission designed to study the planet’s environment. In addition to providing services at its company-owned facilities, Astrotech provides payload processing services and facilities maintenance support on the Sea Launch program at the Home Port facilities in Long Beach, California under contract to United States Sea Launch.