Spacehab Subsidiary Awarded New $9.5 Million NASA Contract

Astrotech Payload Processing Services Being Tapped on Multiple NASA Spacecraft Missions

Houston, Texas, September 20, 2006 – SPACEHAB, Incorporated (NASDAQ: SPAB), a leading provider of commercial space services, announced today that its Astrotech Space Operations subsidiary has been awarded a new payload processing services contract by NASA’s Kennedy Space Center.

With a value not to exceed $9.5 million, this indefinite-delivery, indefinite-quantity (ID/IQ) contract is for payload processing support on several NASA spacecraft. Under consideration are observation telescopes and satellites such as the Gamma-ray Large Area Space Telescope (GLAST) and the Solar Dynamics Observatory. Future payload processing may be acquired based upon the Government’s needs.

“Providing a full complement of processing and facility services for a new series of NASA exploration, observation, and technology development spacecraft is exciting,” stated Jim Royston, Senior Vice President and General Manager of Astrotech Space Operations. “We understand the intricacies of preparing these delicate satellites for launch, and we look forward to supporting the Agency on these bold missions.”

Last September Astrotech received a similar contract from NASA, valued at up to $4.9 million, to support the Agency’s STEREO, THEMIS, and Dawn missions. STEREO, a solar-terrestrial observation spacecraft currently in process at Astrotech’s east coast location, is anticipated to liftoff next month. With an expected arrival at the Company’s facility in October, the THEMIS mission is designed to study the Northern Lights. NASA’s mission to further study the solar system’s beginnings, Dawn, will visit Astrotech for processing in spring 2007, and is expected to begin its journey to space next summer.

Astrotech provides all support necessary for the customer to successfully process their spaceflight hardware for launch, including advance planning; use of unique facilities; and spacecraft checkout, encapsulation, fueling, transport, and remote control through launch. In its 22-year history, Astrotech has supported the processing of over 240 spacecraft without a single impact to a customer’s mission launch schedule.