Making a Difference | Frank Kendall, U.S. undersecretary of defense for acquisition, technology and logistics

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Soaring costs have made the U.S. military’s main satellite launching program among its more controversial. It doesn’t help for appearances’ sake that the Evolved Expendable Launch Vehicle (EELV) program’s prime contractor, United Launch Alliance (ULA), has a virtual lock on the market for delivering U.S. national security satellites to orbit.

Frank Kendall, the Defense Department’s top acquisition official, indirectly alluded to ULA’s monopoly status in a letter to Congress whose purpose was to recertify the EELV program for continuation as legally required after it had breached the 25 percent cost-growth threshold. Although Kendall attributed much of that cost growth to factors beyond anyone’s control, he also cited “poor program execution in which little incentive for cost control, or threat of termination, exists for the vast proportion of EELV’s content which is not tied to the fixed infrastructure for space assets.”

When the Pentagon encouraged Boeing and Lockheed Martin to merge their respective rocket making businesses, the move that created ULA, it felt it had little choice: Following the unforeseen collapse of the commercial launch market, the U.S. government had found itself unable to support both companies on a competitive basis. Among the most vocal opponents of the merger was upstart Space Exploration Technologies Corp. (SpaceX), which at the time the deal closed, in 2006, had yet to launch anything into orbit. 

Fast forward to 2012, by which time SpaceX had conducted multiple successful launches of its intermediate-class Falcon 9 rocket, with a heavy lifter in development. Congress, meanwhile, had stepped up its scrutiny and criticism of the EELV program and in particular the Air Force’s EELV cost-containment plan entailing a commitment to buy up to 50 rocket cores from ULA. 

The Air Force was in a spot: Although SpaceX promised to bring lower prices and competition to the national security marketplace, dividing the military manifest among two companies could undermine its primary EELV cost-cutting strategy. Moreover, for all the complaints about EELV costs, ULA has amassed a perfect track record over 73 launches, most for the Pentagon, while SpaceX has a short track record of missions, all to low Earth orbit.

It was Kendall’s office that approved a plan that gives so-called new entrants like SpaceX the opportunity to compete for national security missions while preserving the industrial base-stabilizing and volume-discount aspects of the block-buy strategy. The plan specifically calls for committing to buy up to 36 launch vehicle cores from ULA while setting aside 14 missions for competition. Should SpaceX or another prospective provider prove not up to the task, the Air Force is free to award those 14 missions to ULA. 

Kendall’s actions could bring real competition to the U.S. government and national security launch services market for the first time in seven years. If that competition doesn’t materialize, it won’t be because newcomers aren’t being given the chance to prove themselves.