WASHINGTON --- Rocketplane Kistler's effort to restart development of the K-1 reusable rocket and conduct for NASA a series of International Space Station re-supply demonstration flights has been dealt a setback with the loss of strategic partner Orbital Sciences Corp. and the approximately $10 million the Dulles, Va.-based company had pledged to bring to the table.

NASA picked Oklahoma City-based Rocketplane Kistler and El Segundo, Calif.-based Space Exploration Technologies (SpaceX) in mid-August from a field of six finalists to share $500 million in funding the space agency plans to spend on the Commercial Orbital Transportation Services (COTS) demonstration program through 2011.

Rocketplane Kistler has pledged to match NASA's $207 million investment in the K-1 roughly two-for-one with outside capital. Upon winning the COTS contract, Rocketplane Kistler announced that Orbital Sciences Corp. was signing on as a strategic partner to manage the K-1 development and contribute to Kistler's financing efforts with a $10 million investment.

But that plan has fallen through, according to Orbital Sciences.

"We haven't been able to agree on all the elements of the business plan so we will not be part of the program going forward," Orbital Sciences spokesman Barron Beneski said Sept. 25. "And of course as a result we will not be investing the $10 million."