Profile | Bill Parsons, President and Chief Executive, RD-Amross
RD-Amross, the U.S.-Russian joint venture that supplies Russian-built RD-180 main engines for the( ) Atlas 5 rocket, is operating in an odd sort of corporate limbo these days.
Its original U.S. corporate parent, space propulsion provider Pratt & Whitney Rocketdyne, recently was sold by United Technologies Corp. (UTC) to Aerojet. But RD-Amross remains with UTC, which still owns the old Pratt & Whitney aircraft engine business, due to complications in securing Russian government approval for the transfer.
Meanwhile, the RD-180 is at the center of a lawsuit and a U.S. federal antitrust probe triggered by rocket maker Orbital Sciences Corp., which is interested in using the engine but has been stymied by an exclusivity arrangement between RD-Amross and ULA. The RD-180’s development was funded largely by Lockheed Martin, which along with Boeing owns ULA.
Nevertheless, and despite rumors of a proposed Russian government ban on RD-180 exports, the engines keep coming and the Atlas 5 keeps flying. ULA recently took delivery of four RD-180s from manufacturer NPO Energomash, the Russian shareholder in RD-Amross.
Bill Parsons believes RD-Amross is equipped to cope with these issues without any interruption to its only customer. He’s no stranger to intense scrutiny: As a former shuttle program manager and director of NASA’s Kennedy Space Center, he led the agency’s return-to-flight activities following the Columbia disaster.
Parsons spoke with SpaceNews staff writer Mike Gruss just hours after the most recent RD-180 shipment arrived in Huntsville, Ala.
Can you explain the current working arrangement between RD-Amross and UTC?
RD-Amross is a joint venture — 50 percent owned by UTC/Pratt & Whitney, 50 percent owned by NPO Energomash. When UTC decided to sell Pratt & Whitney Rocketdyne, they had changed their minds about what kind of business they wanted to be in. But as we went through the process and looked at all the different things that needed to be done, the approval that needed to be provided so that we would not have any interruption in business, it was determined that the carve out — and that’s what we’ve called it — was necessary; we’ve carved out RD-Amross separately. We stayed back with UTC, so my board of directors is three UTC employees and three Energomash.
Are there UTC badged employees at RD-Amross now?
I only have two Pratt & Whitney employees. I have a program manager who’s a Pratt & Whitney employee and I have a contracts manager and that’s because that carried over and they stayed with Pratt Whitney as well. I also contract with Pratt & Whitney to provide services that we give to ULA — technical services. They do export control for us as well as other things.
Does it make any difference if it’s UTC or the newcompany performing these services?
Not at all.
Are you actively seeking Russian government approval to transfer UTC’s shares of the company to Aerojet Rocketdyne?
Yes we are. UTC was trying to sell Rocketdyne for some time, and Energomash had started working with the Russian government to have this transfer and then the first deal fell through. They didn’t want to start again until this was a sure thing. Basically they told UTC, “When you sell, then we’ll start this process.” So whatever the magic date was that the sale occurred, that’s when we really tried to fit the package together. The package is 99 percent complete.
What is the status of your engine contract with ULA?
We have a contract with ULA to deliver engines through 2018. We had a contract to deliver between five or six engines a year through 2018.
Are you working on a follow-on contract?
We’re talking about it, but we haven’t started yet. We’ll probably start that next year. The middle of next year is when things will get more serious.
There have been price increases on the RD-180 in recent years. Have things stabilized?
Yes. Most of that is because ULA has negotiated a block buy. They negotiated a five-year contract through 2018. You keep production rates up in their plant, the price goes down or the price at least doesn’t grow at the rate of inflation. If you’re ordering one engine it costs this much. If you order two engines, three engines, four engines, you want to get that price. They haven’t hit that sweet spot. If you ordered eight engines a year that might be getting close to the sweet spot. They’re not ordering that many, therefore we can’t get all the pricing to the lowest level possible, but we have really controlled the cost.
What is the price now?
I wouldn’t want to go into that. I would tell you they’re looking at some significant reductions and the first step would be if you could order more engines. Ordering that right number of engines per year would be the easiest way for us to reduce cost.
Has the RD-180’s role in cost growth on the U.S. Air Force’s Evolved Expendable Launch Vehicle program been overstated?
Based on what I’ve seen, it’s a good price. Could they get efficiencies? Could you use less people if you have a better machine? There are always things they could do to improve that a little bit. But overall, given the cost of materials, the cost of labor, it’s a pretty good price. And comparatively, with what I know about American rocket engines, it’s a pretty good price.
Is that a fixed-price contract?
A recent news report quoted an unnamed Russian government official as saying a ban on RD-180 exports was under consideration. Is there anything to that?
We read it in the paper and we did talk about it in some of our meetings. As the Russian government changes, sometimes things get said. In my opinion, it’s not a “ban the RD-180 in the U.S.” If you were using the RD-180 to do certain things, the person who gave that interview might not appreciate that as much.
Is there any movement at all on notional plans to manufacture the RD-180 in the United States?
We always like to talk about that. Just like everything else, though, it requires an investment. It’s a fairly sizable investment. It’s a project we’d all like to be a part of. But they [Energomash] meet their contracts, they deliver on time and the price is a good price. You build that same engine in the U.S. and the price of that engine goes up.
By how much?
Maybe half again as much. And that’s a little bit of speculation on my part. It would definitely increase the price significantly.
Is RD-Amross a fully complaint supplier to the U.S. government under acquisition rules?
Certain aspects of Energomash do not meet FAR (Federal Acquisition Regulations) 15 requirements. They meet FAR 12 requirements. To meet FAR 15 requirements would require them to do some things that they’re just not capable of doing. They don’t have that business model to share that type of data openly with the U.S. government. The government keeps asking for better data, more data. We give them the best data we can, but there are just certain things they’re just not going to see the details of.
Is Energomash giving enough data and access for the right level for quality control?
Yes. We have quality summits where we talk about quality. The Energomash executive director has put a strong emphasis on quality. When you go to the Energomash plant, it’s not as modern, it’s not as new, and things like that. But you can feel the quality programs as you walk through the manufacturing area and the inspections and the things that they do. They have an excellent quality program that they’ve developed the last 15 years working with ULA.
Will the reorganization of Russia’s supplier industrial base affect the company in any way?
It hasn’t completely played itself out yet. We’re still trying to watch it closely. My executive director shows a lot of confidence that things will work out in a very positive way. He’s very confident things are going in a good direction for Energomash to continue doing their business.
Are you in favor of extending RD-Amross’ exclusivity agreement with ULA through 2018?
From everything that has occurred since I’ve been on board, in the last 2.5 years, it made sense for us to have that business relationship. We didn’t have another customer. We had been building RD-180s for this customer for a long time. I have a customer that has invested a lot of money and a lot of time in working with the RD-180 program.
But don’t you want to expand the customer base?
I do. But not at the expense of this very important customer that I have. I have to make sure I keep this customer working with me over the long haul. Expanding my customer base for the wrong reasons might bring the wrong results.
Right now, would you be able to sell to Orbital in 2018?
There’s an ongoing investigation and I probably couldn’t say. We’re waiting to get some further information from the Federal Trade Commission.
ULA is your only contract right now?
Yes. It’s not the only Energomash contract but it is the only RD-Amross contract.
You delivered four engines this year and are scheduled for five next year and six the year after that. Is that rate going to vary?
The rate remains between four and six engines per year.
Boeing and Sierra Nevada Corp. intend to use the Atlas 5 to launch manned spacecraft they are developing. What’s the biggest hurdle in human rating the RD-180?
Because the heritage of the RD-180 comes from the RD-170/171 — and that was a human-rated rocket engine — it’s much easier. There would probably be some new sensors and some extra little things you’d want to do, even some testing you’d want to do, but overall this engine is capable of being human rated.
Do you have a timeline on that?
Our timeline is what ULA’s timeline is and we’re working directly with ULA to human rate that part of the RD-180. Pratt & Whitney has written white papers and discussed how you would rate the RD-180, and it turns out that it’s a very doable process.