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                                                                   Exhibit 10.83

                                                    Letter Contract No. SHB 1014
                                                    Modification No.          21
                                                    Date:          July 22, 1998


To:                                                 From:
The Boeing Company                                  SPACEHAB, Inc.
499 Boeing Blvd.                                    1595 Spring Hill Road
P. O. Box 24002                                     Suite 360
Huntsville, AL 35824-6402                           Vienna, VA 22182

Attn:             Doyle McBride
                  Senior Contracts Administrator


Dear Mr. McBride:

Letter Contract No. 1014 is hereby amended as follows:

1. Paragraph 1 is deleted in its entirety and replaced with the following:

"1.       SPACEHAB, Inc. ("SPACEHAB"), hereby commercially contracts with
          McDonnell Douglas Aerospace - Huntsville (hereinafter referred to as
          "MDA-Huntsville" or "Seller"), a division of the McDonnell Douglas
          Corporation, a wholly-owned subsidiary of the Boeing Company, for the
          following:

          a.        The performance of all integration and operations tasks
                    required to successfully complete 4 SPACEHAB science
                    missions (1 single module mission and 3 double module
                    missions) and 2 SPACEHAB cargo double module missions
                    (Multiple Mission Integration and Operations (MM I/O
                    Tasks)). The definitized contract will include options for 3
                    additional cargo double module missions that may be executed
                    in accordance with the definitized schedule. For ISS
                    logistics missions, NASA has requested that equipment stowed
                    in soft stowage bags be transferred in the bags to the
                    appropriate location onboard the ISS for stowage. NASA's
                    preferred bag is similar to the Collapsible Transfer Bags
                    (CTB) currently used for Mir resupply missions. SPACEHAB,
                    Inc. (SHI) has agreed to transfer bags (including existing
                    bags, if appropriate) to the ISS and to provide the new
                    CTB-like bags for use on ISS logistics missions.
                    Accordingly, SHI will provide the new bags to Boeing
                    Huntsville for inclusion in the SH inventory in accordance
                    with the provisions for SHI Furnished Equipment 
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                                                     Letter Contract No. SHB1014
                                                             Modification No. 21
                                                                    22 July 1998


                    (SFE) to be included in the new Multiple Mission Integration
                    and Operations Contract (MMIOC). Boeing Huntsville is
                    requested and authorized to modify mission planning for the
                    STS-96 mission to include maximum use of the new bags (half,
                    single, and double MLVE sizes). Assume bags in each size are
                    available in sufficient quantity to meet the optimum packing
                    arrangement. Additionally, the contents of each bag are to
                    be grouped as much as possible, in accordance with their
                    destination location on the ISS.

          b.        Initiation of effort to enhance cargo carrying capability of
                    the SPACEHAB module consistent with capabilities presented
                    to SHI on 28 August 1997 as follows: i) Ceiling stowage
                    system is desired for use on STS-95 (2 bags are required).
                    Use best efforts for partial system capability (2 bags) for
                    use on STS-91. Provide a firm quotation for 1 set of ceiling
                    enhancement hardware within 150 days from the date of
                    Modification 01 to this Letter Agreement and ii) Rack front
                    stowage system (along with ceiling system) is required for
                    use on STS-96. Provide a firm quotation for 3 sets of rack
                    enhancement hardware within 180 days from the date of
                    Modification 01 to this Letter Agreement.

          c.        (i) Stop work on all effort in support of initiation of
                    effort to design, develop, build, and certify a roof-top
                    stowage adapter plate system, as described to SHI on 6
                    November 1997 as directed by Modification No. 03 dated 19
                    November 1997 and provide a status of contract change effort
                    through the date of this Modification No. 07.

                    (ii)(a)   Develop requirements, preliminary interface
                              definition, and a list of technical questions for
                              the Strella payload. These requirements are to be
                              transmitted to SPACEHAB, Inc. for use in their
                              technical interchange meetings with the Russians.

                        (b)   Design, analyze, fabricate, and install the
                              necessary rooftop adaptive structure for the
                              Strella payload on STS-96 as determined based on
                              the above noted requirements and subsequent
                              technical interchange meetings with Boeing,
                              SPACEHAB, Inc., NASA and the Russian Strella
                              payload representatives. Provide a firm quotation
                              for this effort by 3 April 1998.

          d.        Initiation of effort to design, develop, build, and certify
                    the necessary hardware to accommodate the Experiment Water
                    Pump Package in a SPACEHAB double rack. This capability is
                    required for STS-95. Provide a firm quotation with prices
                    for 1, 2, or 3 sets of this within 90 days of the date of
                    Modification 03 to this Letter Agreement.

          e.        Initiation of effort to design, develop, build, and certify
                    new MGSE for the 27.14 inch tunnel as described to SHI on 7
                    November 1997. This equipment is required to process STS-95.
                    Provide a firm quotation for this 
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                                                     Letter Contract No. SHB1014
                                                             Modification No. 21
                                                                    22 July 1998


                    effort within 90 days of the date of Modification 03 to this
                    Letter Agreement.

          f.        Initiation of the effort to perform the following tasks
                    under WBS 9.1.9.5.2 Flight Systems:

                    (i)       9.1.9.5.2.1 Logistics Double Module Enhancements.
                              This element contains the labor effort necessary
                              to identify, evaluate, and recommend ways to
                              enhance the cargo carrying capability of the
                              Logistics Double Module.

                    (ii)      9.1.9.5.2.2 Research Double Module Enhancements.
                              This element contains the labor effort necessary
                              to identify, evaluate, and recommend ways to
                              enhance the capability of the Research Double
                              module to accommodate new payloads and improve
                              accommodations for existing payloads.

                    (iii)     9.1.9.5.2.3 Integrated Cargo Services. This
                              element contains the labor effort necessary to
                              evaluate future storage/cargo requirements
                              associated with the International Space Station
                              and determine proposed solutions considering all
                              SPACEHAB assets. This element includes studies,
                              evaluations, and support of the new SPACEHAB
                              provided Integrated Cargo Carrier assets.

          g.        Initiation of effort to provide payload optional services
                    for STS-95 including the design and development of a triple
                    mounting plate for BioBox and the design and development of
                    a double mounting plate for MGBX. Provide a firm quotation
                    for this effort within 90 days of this modification.

          h.        Initiation of effort to upgrade the existing engineering
                    prototype SCU unit for use as flight spare on STS-95 and
                    provide a firm quotation for this effort within 90 days of
                    this modification.

          i.        Initiation of effort to perform a GTS Win NT upgrade as
                    proposed in Supplement No. 1.

          j.        Initiation of the effort to perform the following tasks
                    under WBS 9.1.9.5.3 Microgravity and Life Sciences:

                    (i)       Microgravity and Life Sciences Payload
                              Assessments. This element contains the effort
                              necessary to identify and characterize potential
                              new internal and external microgravity and life
                              sciences payload customers and requirements for
                              the International Space Station (ISS) and the
                              Space Shuttle Program (SSP). This effort includes
                              experiment integration assessments with respect to
                              safety and unique integration hardware and
                              attendant experiment hardware modifications.
                              Assessments may include development of payload
                              accommodation requirements, performance of payload
                              resource utilization analyses, and development of
                              ROM estimates for unique hardware modifications
                              and integration elements.

          k.        Initiation of the effort to perform the following task under
                    WBS 9.1.9.3.4:
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                                                     Letter Contract No. SHB1014
                                                             Modification No. 21
                                                                    22 July 1998


                    (i)       Procure critical long lead material for the
                              Docking Double Module. This effort includes the
                              procurement of 2 aluminum ingots from Alenia's
                              European supplier to protect the critical path raw
                              material required to produce the DDM FU-5 end ring
                              forgings.

                    The period of performance of this effort is 6 February 1998
                    through 30 June 1998. The NTE for this effort is $170,000.

          l.        Initiation of effort under WBS 9.1.9.3.1 to support training
                    in Germany for the FAST experiment on STS-95. Labor for
                    training is considered in scope to WBS 9.1.9.2.1. This
                    modification authorizes the travel costs of Boeing
                    personnel. Provide a firm quotation for this effort within
                    60 days of the date of this modification. The NTE for this
                    effort is $25,000.

          m.        Initiation of effort under WBS 9.1.9.3.1 to perform the
                    additional task of preparing Phase III Flight Safety Data
                    Packages for the SSD-MOMO and APCF experiments. The
                    experimenter organizations will furnish supporting data as
                    requested by Boeing in a timely manner for enabling this
                    activity. Provide a firm quotation for this effort within 60
                    days of this modification. The NTE for this effort is
                    $15,000.

          n.        Initiation of effort under WBS 9.1.9.3.4 to provide the
                    additional experiment transportation containers required to
                    meet STS-95 requirements. Provide a firm quotation for this
                    effort within 60 days of this modification. The NTE for this
                    effort is $20,000.

          o.        Initiation of effort under WBS 9.1.9.3.4 to upgrade the
                    SPACEHAB crew trainer module assembly at the SPPF. The
                    upgrades are to be in accordance with the plan reviewed with
                    SPACEHAB on 26 March 1997. It is highly desirable that the
                    modifications be completed prior to the STS-95 crew training
                    scheduled in July 1998. Please provide a firm quotation for
                    this effort within 60 days of this modification. The NTE for
                    this effort is $50,000.

          p.        Initiation of effort under WBS 9.1.9.1 to provide 40 new
                    experiment battery packs and 4 chargers. Labor for this
                    effort is considered in scope to WBS 9.1.9.1. This
                    modification authorizes materials and procurement. The new
                    batteries are required to support the STS-95 processing
                    schedule. Please provide a firm quotation for this effort
                    within 60 days of this modification. The NTE for this effort
                    is $50,000.

          q.        Initiate effort under WBS 9.1.9.3.3 to integrate the LeRC
                    Combustion Module (CM) experiment in STS-107. Please provide
                    a firm quotation for this effort within 90 days of this
                    modification. The NTE for this 90 day effort is $100,000.

          r.        Initiate effort under WBS 9.1.9.3.3 to integrate the MSFC
                    Volatile Removal Assembly/Vapor Compression Distillation
                    (VRA/VCD) experiment in STS-107. Please provide a firm
                    quotation for this effort within 90 days of this
                    modification. The NTE for this 90 day effort is $100,000.
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                                                     Letter Contract No. SHB1014
                                                             Modification No. 21
                                                                    22 July 1998


          s.        Initiate effort under WBS 9.1.9.3.3 to integrate the rack
                    mounted and aft module subfloor pallet mounted ISS ORUs as
                    defined in the baselined STS-96 MRAD. Please provide a firm
                    quotation for this effort within 90 days of this
                    modification. The NTE for this 90 day effort is $100,000.

          t.        Initiate effort to provide all program sustaining labor,
                    travel, materials, vendor services, and other sustaining
                    services under this contract beginning 1 June 1998. Provide
                    a firm quotation for the impact of this modification within
                    60 days of the date of this modification.

          u.        Initiate effort under WBS 9.1.9.3.4 to upgrade the current
                    SPACEHAB EGSE at the SPPF to enable the system to function
                    past the year 2000. The initial efforts are to include
                    refinement of the EGSE system upgrade concept; definition of
                    physical configuration and cable modification requirements;
                    draft changes to system requirements documentation; and
                    identification and procurement of software development
                    tools. Provide a firm quotation for the EGSE upgrade effort
                    within 90 days of this modification. The NTE for this 90 day
                    effort is $80,000.

          v.        Initiate effort under WBS 9.1.9.3.4 to provide a new tunnel
                    configuration for STS-96. This new configuration results
                    from the addition of existing tunnel segment(s) to move the
                    module further aft in the cargo bay and is intended to
                    eliminate planned ballast and provide additional payload
                    capability to the ICC. Perform detailed engineering
                    assessment of the new tunnel structural compatibility to
                    include stress analysis of struts, trunnions, tunnel
                    cylinder, and rings. Evaluate Orbiter compatibility of
                    tunnel and ICC sharing payload bridges, including assessment
                    of compatibility of the tunnel and ICC fittings with the
                    orbiter latches. Evaluate rotation of 27.51 tunnel segment
                    to disable existing duct/plenums and the addition of drag-on
                    ducts. Determine modifications required, including any
                    structural modifications, outfitting changes, and new MLI
                    sections. Verification of the structural compatibility is
                    required ASAP for use in STS-96 mission planning. Provide a
                    detailed schedule and firm quotation and firm quotation to
                    support the STS-96 mission within 60 days of this
                    modification. The NTE for this 60 day effort is $30,000.

          w.        Initiate effort under WBS 9.1.9.3.2 to support NASDA's BRIC
                    in-module plant growth activities (test planning and test
                    execution) in the SPPF beginning Thursday, June 25 and
                    completing no later than midnight Saturday, June 27, 1998.
                    The NTE for this effort is $11,000.

          x.        Initiation of the effort to perform the following tasks
                    under WBS 9.1.9.5.1 Operations:

                    (i)       9.1.9.5.1.2 Payload Development. This element
                              contains effort necessary to support SHI in the
                              development of new payload customers. This
                              includes identification of potential new
                              customers, development of their requirements and
                              accommodation studies.
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                                                     Letter Contract No. SHB1014
                                                             Modification No. 21
                                                                    22 July 1998


          y.        Under WBS 9.1.9.2, Mission Recurring, perform STS-107
                    pre-mission integration efforts as follows:

                    (i)       Develop mini-MRAD based on the commercial payloads
                              identified to date. Provide a firm quotation
                              within 90 days. The NTE for this 90 day effort is
                              $50,000.

          z.        Initiate the effort to accommodate Spacelab equipment
                    provided by NASA. This initial effort consists of the
                    following tasks:

                    (i)       Coordinate the shipping/receiving of hardware from
                              NASA with SPACEHAB, Inc, NASA-KSC, and NASA REALMS
                              program office; (ii) determine what NASA has
                              delivered to the SPPF by part number and quantity;
                              (iii) Determine if any hardware items are not to
                              be kept by SPACEHAB (returned to NASA or
                              scrapped/sold). Implement return to NASA or scrap
                              as necessary; (iv) Enter the hardware in a
                              tracking database; (v) Place retained hardware in
                              appropriate storage; (vi) Determine documentation
                              required for proper use of retained hardware (ADP,
                              handling/constraints, operations manuals, etc...).
                              Provide a firm quotation for this effort within 60
                              days of this modification. The NTE for this effort
                              is $15,000.

          aa.       Proceed with the repair of PPRV #1 (s/n 2665-0001-13) and
                    return it to inventory as soon as possible. Provide a firm
                    quotation for this effort within 60 days of this
                    modification. The NTE for this effort is $18,000.

          bb.       Initiate effort to modify the VFEU experiment water loop
                    plumbing to increase the VFEU inlet water temperature to
                    within the range of 10(Degree) - 25(Degree)C. Provide a firm
                    quotation for this effort within 90 days of this
                    modification. The NTE for this total effort is $45,000.

          cc.       Proceed with the effort to perform the tasks under WBS
                    9.1.9.5.2 Flight Systems for the period 1 July 1998 through
                    31 June 1999.

          dd.       Initiate effort to provide new tools for two additional RDM
                    cable building workstations. Please provide a firm quotation
                    for this effort within 30 days of this modification. The NTE
                    for this 30 day effort is $18,000."


Paragraph 3 is deleted in its entirety and replaced with the following.

"3. The maximum amount (including, but not limited to, a reasonable amount for
termination costs and for 12 percent fee) for which SPACEHAB shall be liable
under this letter contract is $13,769,507.00 for the effort described in
Paragraph 1.a; $235,000.00 for the effort described in Paragraph 1.b; $90,000.00
for the effort described in Paragraph 1.c.; $45,000.00 for the effort described
in Paragraph 1.d.; $60,000.00 for the effort described in Paragraph 1.e.;
$25,000.00 for the effort described in Paragraph 1.f.(i); $100,000.00 for the
effort described in Paragraph 1.f.(ii); $630,000.00 for the effort described in
Paragraph 1.f.(iii); $45,000 for the effort described in Paragraph 1.g.;
$15,000.00 for the effort described in Paragraph 1.h.; $20,700 for the effort
described in Paragraph 1.i.; $75,000 for


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                                                     Letter Contract No. SHB1014
                                                             Modification No. 21
                                                                    22 July 1998


the effort described in Paragraph 1.j.(i); $170,000 for the effort described in
Paragraph 1.k.; $25,000 for the effort described in Paragraph 1.l; $15,000 for
the effort described in Paragraph 1.m; $20,000 for the effort described in
Paragraph 1.n.; $50,000 for the effort described in Paragraph 1.o.; $50,000 for
the effort described in Paragraph 1.p.; $100,000 for the effort described in
Paragraph 1.q.; $100,000 for the effort described in Paragraph 1.r.;$100,000 for
the effort described in Paragraph 1.s.; $600,000 for the effort described in
Paragraph 1.t.; $80,000 for the effort described in Paragraph 1.u.; $30,000 for
the effort described in Paragraph 1.v.; $11,000 for the effort described in
Paragraph 1.w.; $225,000 for the effort described in Paragraph 1.x.(i); $50,000
for the effort described in Paragraph 1.y.; $15,000 for the effort described in
Paragraph 1.z; $18,000 for the effort described in Paragraph 1.aa; $45,000 for
the effort described in Paragraph 1.bb; $155,000 for the effort described in
Paragraph 1.cc. and $18,000 for the effort described in Paragraph 1.dd."


Except as hereby modified, all conditions of said contract as heretofore
modified, remain unchanged and in full force and effect.

Contractor is directed to account for costs in such a manner as to allow
visibility into the costs of effort authorized in this change order.

Please acknowledge receipt of this Change Notice by returning the acknowledgment
copy (within l0 days of receipt) signed with date of receipt indicated.


------------------                          ----------------------------------
Nelda Wilbanks                              McDonnell Douglas Corporation,
SPACEHAB, Inc.                              A Wholly-Owned Subsidiary of
                                            The Boeing Company