SPACEHAB Subsidiary Awarded $1.2 Million Spacecraft Facility Study.

HOUSTON -- SPACEHAB, Incorporated (NASDAQ:SPAB), a leading provider of commercial space services, announced today that its Astrotech Space Operations subsidiary has been awarded a $1.2 million contract to perform a feasibility study and preliminary design for government payload processing facilities.

The study calls for an engineering and concept development report for a new processing facility and associated infrastructure. Astrotech must complete its study and design efforts by September 2006. "The study contract could lead to the design and construction of the entire processing facility, an opportunity that would greatly enhance our existing coast-to-coast capabilities," said Don White, Vice President of Astrotech.

Astrotech has extensive experience in designing, building, and operating spacecraft processing facilities. The Company's Cape Canaveral 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.

The Company also owns and operates a full-service facility for processing satellites and upper stages at Vandenberg Air Force Base. This 60-acre site supports expendable Atlas, Delta, Pegasus, and Taurus launches from the Western Range. The Astrotech team recently completed payload processing support at this location for NASA's CloudSat and CALIPSO spacecraft. The satellites were launched onboard a Delta II rocket on a mission designed to study the planet's environment. In addition to providing services at its company-owned facilities, Astrotech provides payload processing services and facilities maintenance support on the Sea Launch program at the Home Port facilities in Long Beach, California under contract to United States Sea Launch.

About SPACEHAB, Incorporated

SPACEHAB, Incorporated (www.spacehab.com) is a leading provider of commercial and government space services with three primary business units. The Flight Services business unit develops, owns, and operates habitat and laboratory modules and cargo carriers aboard NASA's Space Shuttles for Space Station resupply and research purposes. SPACEHAB's Astrotech subsidiary provides payload processing support services for both commercial and government customers at company-owned facilities in Florida and California. The Company's Government Services business unit supports NASA's Johnson Space Center providing configuration management, product engineering, and support services for both the Space Station and Space Shuttle programs. Additionally, through The Space Store, Space Media provides space merchandise to the public and space enthusiasts worldwide (www.thespacestore.com).

The statements in this document may contain forward-looking statements that are made pursuant to the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements are subject to risks, trends, and uncertainties that could cause actual results to be materially different from the forward-looking statement. These factors include, but are not limited to, continued government support and funding for key space programs, product performance and market acceptance of products and services, as well as other risk factors and business considerations described in the company's Securities & Exchange Commission filings including the annual report on Form 10-K. Any forward-looking statements in this document should be evaluated in light of these important risk factors. The Company assumes no obligation to update these forward-looking statements.