USAF Support For ULA Is Scrutinized

By Amy Butler
August 13, 2012

Amy Butler Washington

As Lockheed Martin and Orbital Sciences Corp. separately propose alternatives for the Pentagon to the United Launch Alliance’s (ULA) rocket monopoly, some lawmakers fear the U.S. Air Force will throw too much support to the incumbent contractor, freezing out new entrants to the market.

The chairman and the top Democrat on the House Permanent Select Committee on Intelligence even go so far in an Aug. 2 letter to Defense Secretary Leon Panetta as to call the Air Force’s launch capability contract with ULA—worth billions of dollars annually to pay for the launch workers and support engineers—an “infrastructure subsidy.”

Reps. Mike Rogers (R-Mich.) and C.A. “Dutch” Ruppersberger (D-Md.), chairman and ranking Democrat, respectively, call on the Air Force to eliminate this contract. That move would cut funding for the personnel supporting launch activities for ULA. Legislators have long complained that having two contracts—the launch capabilities contract for infrastructure and the launch services contract covering fixed-price buys of the rockets—obscures the real cost of the launch enterprise. Some this year are calling for the Air Force to combine these two into one comprehensive contract to provide a clearer picture of the true cost of launches.

At issue is the growing cost of launch since the government approved the merger of Boeing and Lockheed’s formerly separate launch businesses into the ULA joint venture. Lockheed’s new venture also includes a launch vehicle of a different class, the Athena.

The price to boost satellites is going up in part owing to the inefficient procurement practice of buying only one rocket at a time. Also, NASA’s decision to pull out of the launch market in favor of Russian boosters has driven the Pentagon’s share of the launch infrastructure cost substantially higher.

The two House lawmakers are also asking that the Air Force limit its next block-buy of rocket purchases from ULA to three years; the service has been pursuing a buy of five years to take advantage of the economic order quantities. Air Force officials say they expect to finalize negotiations with ULA on this contract by next June.

In the meantime, the service is moving ahead with a “bridge contract” for launch capability services to support eight launches for ULA to cover near-term missions, including six for the Air Force, one for the Navy and one for the National Reconnaissance Office. “The bridge contract will only cover the capability to launch eight rockets . . . not the rockets themselves,” says an Air Force official; the boosters were purchased in fiscal 2011 but have been unused due to significant delays in satellite delivery times.

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