Spacehab Subsidiary Wins New $20 Million Spacecraft Facility Contract

Additional Spacecraft Accommodations to be Developed in California

Houston, Texas (November 14, 2006) - SPACEHAB, Incorporated (NASDAQ: SPAB), a leading provider of commercial space services, announced today that its Astrotech Space Operations subsidiary has been awarded a $20.0 million contract to design and build a payload processing facility for the U.S. Government, Office of Space Launch.

This facility, to be used for pre-launch spacecraft processing, will be located on the Company’s existing 60-acre site at Vandenberg Air Force Base and will enhance the West Coast capabilities already provided. Under a firm fixed-price contract with the Government, design work begins immediately with construction commencing March 2007 and concluding September 2009. Under the terms of the contract, the Company will design and construct the facility to government requirements while maintaining ownership and operation of the facility.

“This contract not only gives us the means to support the needs of this latest customer, but helps us grow our operations and service offerings to all customers on the West Coast,” said Jim Royston, Senior Vice President and General Manager of Astrotech. The Company currently owns and operates a full-service facility for processing satellites and upper stages at Vandenberg Air Force Base, supporting expendable Atlas, Delta, Pegasus, and Taurus launches from the Western Range. The new facility will include 8,000 square feet of additional capacity that enables the processing of payloads that will utilize up to five-meter fairings.

The Company was awarded a $1.2 million contract in May 2006 to perform the feasibility study and preliminary design for this payload processing facility. The contract called for an engineering and concept development report for a new processing facility and associated infrastructure. As intended, this effort led to the contract award for final design and construction of the processing facility.

Astrotech has extensive experience in designing, building, and operating spacecraft processing facilities. The Company’s Titusville, Florida 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 square feet of facility space, Astrotech processes virtually all U.S.-based commercial spacecraft at this location and a considerable percentage of government payloads.