WASHINGTON – When United Launch Alliance announced Nov. 16 it would not bid on the U.S. Air Force’s first competitive launch contract in a decade, the company said it did not have the right accounting system to assemble a “compliant proposal.”
But a Pentagon agency had approved ULA’s accounting system 10 days earlier, according to U.S. Deputy Defense Secretary Bob Work.
“We disagree with any statements made by ULA that it did not have the accounting systems in place,” Work wrote in a Jan. 26 letter to Senate Armed Services Committee Chairman John McCain (R-Ariz.). “We have always contended that ULA had the ability to provide the required certification and believe that ULA would now be willing to make that certification.”
In addition, Defense Department and Air Force officials met with ULA leaders before the bid was due to discuss the issue, Work wrote in the letter, a copy of which was obtained by SpaceNews.
Denver-based ULA disclosed Nov. 16 it declined to bid on the 2018 launch of a GPS 3 satellite. The move effectively ceded the contract to SpaceX and frustrated lawmakers and Defense Department leaders.
ULA cited several reasons for not bidding, including concerns about its future rights to Russian-built RD-180 rocket engines for national security launches and an inability to certify that funds from other government programs would not contribute to the launch of the Air Force’s second GPS 3 satellite.
“The [request for proposals] requires ULA to certify that funds from other government contracts will not benefit the GPS III launch mission,” the company said in a statement sent to reporters Nov. 16. “ULA does not have the accounting systems in place to make that certification, and therefore cannot submit a compliant proposal.”
To meet the GPS 3-2 bidding requirements, ULA said it would have needed to modify its current accounting system, a move ULA claimed would put the company in a state of noncompliance with its existing contracts.
But in the letter, Work said the Pentagon’s Defense Contract Audit Agency had approved ULA’s accounting system Nov. 6. The agency completed an audit of ULA’s accounting system March 31 and then conducted a further “assessment” before giving the system its seal of approval.
Work told McCain ULA would not be “precluded” from bidding on future competitive launch contracts for accounting reasons.
The Air Force plans to put eight more launch contracts out for bid by the end of 2017. The competitions likely will pit ULA against SpaceX for launch contracts totaling upwards of $1 billion.
“ULA’s decision not to submit a proposal was based on its internal business and management deliberations, and the Department has no way to compel ULA to bid,” Work said. “We are not aware of any constraints that would preclude ULA from submitting a proposal in response” to any upcoming launch contracts.
ULA spokeswoman Jessica Rye declined to comment on Work’s assertions, referring SpaceNews to the company’s Nov. 6 statement.
