NASA will not sign a deal to launch rockets from Cape Breton, opting for a project based in Virginia instead.

Thirteen companies were vying for a contract to develop a space transportation system that could ultimately deliver cargo and crew to the International Space Station.

Among the companies was PlanetSpace Inc., a Chicago-based organization that wanted to set up a launch pad in Cape Breton, in eastern Nova Scotia.

NASA said Tuesday that the Virginia company Orbital had the best overall package, although NASA would not give specifics about each company's bids or why Orbital was chosen over the others.

"I believe the selected company has proposed the best approach to achieving a sustainable and technically credible capability," Doug Cook, NASA's deputy associate administrator for exploration, said during a conference call with reporters.

While Cook wouldn't go into specifics, another NASA official said the fact that PlanetSpace was considering a Canadian site for its launch pad, as opposed to an American one, wasn't a factor in NASA's decision.

"I think more important than the actual location of the launch site was, did the company understand the regulatory environment in which they would have to operate?" said Alan Lindenmoyer, manager of the commercial crew and cargo program at the Johnson Space Center in Houston.

PlanetSpace had looked at setting up its launch pad in one of two unnamed sites in Cape Breton, hoping to send its Silver Dart rocket into space to both service space stations and carry tourists. The company's website talked about plans to fly 2,000 people into space with fares starting at $250,000 US.

Last year, Geoff Sheerin, the company's chief executive, said PlanetSpace was raising $200 million from private investors and bank loans and planned to launch the Silver Dart starting in 2008.

Officials from PlanetSpace would not comment on Tuesday.

NASA investing $170 million

Orbital is considered a leader in the space business and currently designs and launches satellites, in addition to building missile defence systems.

The company says it will be able to deliver up to 2,300 kilograms of cargo to the International Space Station and return 1,200 kilograms of cargo from the station to Earth.

Orbital has committed to a demonstration mission by December 2010, with a launch from the Wallops Flight Facility on the east coast of Virginia. The demonstration will use Orbital's Cygnus spacecraft, launched atop a new Taurus II rocket

NASA will invest $170 million US in Orbital's project. Orbital will contribute $150 million US.

With files from the Canadian Press