A gunman and a hostage were found shot dead inside a building at Johnson Space Center in Houston on Friday. ((NASA))

A manarmed with a handgun who killed himself and a hostage inside the Johnson Space Center in Houston on Friday has prompted a review of the agency's security policies.

William Phillips, 60, a NASA contract worker, hadbarricaded himself inside a room in the building and took two hostages, police said.The male hostagewas killed.

A female hostage was not seriously injured.

The male hostage, identified by NASA as David Beverly, a civil servant who worked at the agency, was shot in the chest.

Beverlywas probably killed "in the early minutes of the whole ordeal," Houston police Capt. Dwayne Ready said.

The second hostage, identified by NASA as Fran Crenshaw, escaped after being bound to a chair with duct tape, Ready said.

Phillips shot himselfonce inthe head more than three hours after the standoff began, police said.

Police Chief Harold Hurtt said Phillips apparently had a dispute with Beverly, but didnot go into details.

John Prosser, executive vice-president of Jacobs Engineering, confirmed thatPhillips was a company employee but declined to release any information about him.

Police said homicide investigators searched Phillips's house where he lived alone and found no guns or any evidence at all about the shooting.

Mike Coats, director of the Johnson Space Center, said Phillips had worked for NASA for 12 to 13 years, and "up until recently, he has been a good employee."

Phillips was able to take a snub-nosed revolver past NASA security and barricade himself in the building, which houses communications and tracking systems for the space shuttle, authorities said.

NASA spokesman Doug Peterson said the agency would review its security.

"Any organization would take a good, hard look at the kind of review process we have with people," Peterson said.

To enter the space centre, workers flash an ID badge as they drive past a security guard. The badge allows workers access to designated buildings.

With files from the Associated Press