Spacehab Subsidiary Awarded $1.6 Million Contract For New Mission

Astrotech to Provide Payload Processing and Spacecraft Fueling Operations for Satellite Servicer

Houston, Texas (August 3, 2006) - SPACEHAB, Incorporated (NASDAQ: SPAB), a leading provider of commercial space services, today announced that its spacecraft processing and facility services subsidiary, Astrotech Space Operations, has been awarded a new $1.6 million payload processing contract by The Boeing Company (NYSE: BA) to support the U.S. Defense Advanced Research Projects Agency (DARPA) Orbital Express mission.

“We are quite pleased to be working with Boeing and its team on another exciting mission,” stated Jim Royston, Astrotech Senior Vice President. “Astrotech’s support not only includes use of our world-class satellite processing facilities, but takes advantage of our growing mission services such as spacecraft fueling.”

The Orbital Express Advanced Technology Demonstration Program is intended to validate the technical feasibility of robotic, autonomous on-orbit refueling and reconfiguration of satellites. The mission, expected to reduce risk for future on-orbit servicing missions, is funded through DARPA, the central research and development organization for the U.S. Department of Defense. The Orbital Express spacecraft is scheduled for processing and encapsulation at Astrotech’s Titusville, Florida facilities this September with an anticipated launch date of December 2006.

Ball Aerospace & Technologies Corp. (NYSE: BLL), a member of Boeing’s Orbital Express team, is providing the Next Generation Satellite and Commodities spacecraft (NEXTSat/CSC) for this demonstration activity. This satellite employs elements from their BCP-2000, a highly accurate and proven spacecraft bus. This same bus system is baselined for use on SPACEHAB’s Apex program, the Company’s own commercially provided vehicle supplying a comprehensive end-to-end space access service. Apex is designed to support a wide range of mission requirements such as on-orbit research and orbital operations, as well as the delivery of cargo and crew to low earth orbit, including the International Space Station via NASA’s Commercial Orbital Transportation Service (COTS) initiative.