In a statement last month, ATK said the Liberty program could sustain "thousands of jobs" and create 600 new ones across the country. Torres said Friday it is too early to discuss the future of the Liberty project following news of losing the contract.
In a statement Friday, Rep. Rob Bishop, R-Utah, said he was "disappointed and disheartened by the news."
"I have been concerned that favoritism may be playing far too prominent of a role in NASA's decision-making process, especially with regards to companies closely tied to key NASA officials," he said. "ATK is a proven leader and their track record is beyond exemplary. It was my understanding that ATK's Liberty proposal ranked very high in technical merit, and was the lowest-risk option."
Bishop's concerns about favoritism stem from alleged relationships he says President Obama and NASA administrator Charles Bolden have with Musk.
In September, ATK said about 35-40 people at its Promontory Point plant west of Brigham City were working directly on its Liberty project but that many more were involved in the development of a new five-segment motor that the company intended to use on its new launch system.
ATK unveiled its Liberty project in early 2011 as its response to a request from NASA, which was looking for a commercial rocket system that it could contract to take its astronauts into space rather than buy rockets for its own use.
And in September of last year, NASA signed an "unfunded" agreement with ATK to further explore the capabilities of the Liberty system.
"We continue to believe Liberty provides the safest, most cost-effective crew and cargo transportation systems, as well as the fastest path to recover America's human launch capability," Torres said.
ATK is perhaps best known in Utah for producing the solid-fuel rocket booster motors that for years helped put the space shuttle into orbit. And it was the proven technology that sat at the heart of those booster motors that ATK was hoping would give its Liberty system the edge in the competition to develop the next generation of human space flight vehicles.
The U.S. retired its shuttle fleet last year and now relies on countries such as Russia to ferry astronauts and supplies to the International Space Station. The Obama administration wants the private sector to take over those jobs so NASA can focus on missions to asteroids and Mars.
NASA pays about $63 million per seat on Russian Soyuz spacecraft.
"We have selected three companies that will help keep us on track to end the outsourcing of human spaceflight and create high-paying jobs in Florida and elsewhere across the country," NASA administrator Bolden said in a statement announcing the awarding of the contracts.
The latest funding is the third and final phase of a program to design and develop the privately operated vehicles. Before today, NASA since 2009 awarded $365 million for work under its commercial crew initiative.
NASA's commercial crew development program started with seven companies. The other companies that were not chosen can still build private rocketships and NASA still has the option to hire them to ferry astronauts at a later date, NASA spokesman Trent Perrotto said.
Of the winning contracts, Boeing has designed its seven-person CST-100 capsule. It would launch on an Atlas rocket, with the first test flight in 2016. The company won't say how much it would charge NASA per seat, but it will be "significantly lower" than the Russian price, said John Mulholland, Boeing vice president. He said Boeing's long experience in working with NASA on human flight gives it a "leg up" on its competitors.
SpaceX is already in the lead in the private space race. The company earlier this year used its Falcon rocket to launch its Dragon capsule into orbit. It docked with the space station and successfully delivered cargo. NASA plans to give the company $440 million. The capsule holds seven people and will have its first test launch with people in 2015, said spokeswoman Kirstin Brost Grantham. The company will charge NASA about $20 million per seat, she said.
Sierra Nevada's mini-shuttle crew vehicle called Dream Chaser carries seven people and could be flown without a pilot. NASA would give it $212.5 million. The ship is based on an old NASA test ship design but hasn't flown as much as SpaceX's Dragon. "It may appear as though we are behind but in many ways we are more mature," said Sierra Nevada space chief Mark Sirangelo. Like Boeing's Mulholland, he said his firm will charge NASA less than the Russians, but won't give a specific price.
Bloomberg News and The Associated Press contributed to this story
ATK's Liberty rocket system
What is it? • It's a 300-foot-tall, two-stage rocket system designed to be a low-cost method to put people and equipment into space. It was developed by Alliant Techsystems.
How it would be used • It was designed with a crew module and originally scheduled to shuttle astronauts to the International Space Station.
The team • The Liberty team spans 10 states, including Utah, and was expected to sustain thousands of jobs and create 600 new jobs, according to ATK.
First flights • It was originally scheduled to conduct its first unmanned test flights in 2014 and 2015, followed by the first manned flight in late 2015. If it had been selected by NASA, it would have made its first commercial flights to the International Space Station in 2016.
Future of the project • ATK says it needs to be debriefed by NASA before it can make any decisions on the long-term prospects for the program.