ROCKETDYNE MAY LOSE RENT-FREE ARRANGEMENT.

Byline: Lisa Mascaro Daily News Staff Writer

Rocketdyne has been using the NASA-owned Santa Susana Field Lab rent-free since 1987 and could be charged up to $3.1 million for continued use through the year 2003, a new audit shows.

The report by NASA's Office of Inspector General calls on the agency's Marshall Space Flight Center to withdraw its authorization for free commercial use, which auditors said may have resulted in Rocketdyne having an unfair advantage in the space launch marketplace.

``We recommend that MSFC withdraw its existing authorizations and contract provisions, charge Rocketdyne rent for its future commercial use, and recover rent for past commercial use,'' the 33-page report says.

Rocketdyne spokesman Dan Beck said the company believes its contract with NASA is fair because the government receives benefits from company improvements to the site. For instance, the company spent $1 million to upgrade the rocket test stands, which benefits NASA projects such as the Mars Pathfinder expedition that sent the rover Sojourner to the red planet.

``Before that little Sojourner could crawl a few feet on Mars, the craft had to travel,'' Beck said. ``Our engine, which is assembled at Santa Susana and tested there, sent that mission on its way. We're pretty proud of that.''

Beck also said the company had not been told of concerns over the contract or any potential rent.

The audit said the Commercial Space Launch Act of 1984, designed to promote the use of government-owned facilities by privately owned companies, has led to some confusion over how to charge users. However, the auditors said federal regulations require that rent be paid by Rocketdyne, and that the existing rent-free arrangement should be revised.

The portion of the 2,700-acre field lab in question is an area that has been operated for decades by Rocketdyne and owned by NASA since 1973.

Management from the Marshall Center, which manages the contract for NASA, concurred with the findings, according to the audit.

Officials ``will ensure that rent or other adequate consideration is received from Rocketdyne for its future use of the NASA-owned . . . facility,'' the report said.

But officials said recouping lost rent may be difficult.

``Management noted that any legal basis to collect rent for the use of production facilities during the period that the government authorized use . . . is at best tenuous,'' the report said.

The report further said that while the auditors found no indication that Rocketdyne turned around and charged rent to its two main subcontractors, it may have enjoyed an unfair advantage in winning contracts.

``This savings could have affected both Rocketdyne's and its prime contractors' ability to win commercial launch vehicle contracts,'' the report said.