ULA, RD-Amross Headed to Court in December to Defend RD-180 Exclusivity

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WASHINGTON — United Launch Alliance (ULA) and RD-Amross, importer of the Russian-built core-stage engine for ULA’s Atlas 5 rocket, want a federal judge to throw out an antitrust lawsuit Orbital Sciences Corp. filed against the companies in July and will appear in court Dec. 6 to make their case.

Orbital is looking for a long-term replacement for the AJ-26 engines used in its Antares rocket and has its eye on Atlas 5’s core-stage engine, the RD-180. However, RD-Amross, under a longstanding exclusivity agreement, only sells the engine to ULA, the Lockheed Martin-Boeing joint venture that provides most major U.S. government launches. Orbital, in a lawsuit filed with the U.S. District Court for Eastern Virginia in Alexandria, said the arrangement should be struck down because it gives a ULA monopoly for “launch systems and services used for medium-class payload missions.” Orbital is seeking $500 million to $1.5 billion in damages. The Dulles, Va.-based rocket and satellite builder has also asked the U.S. Federal Trade Commission to strike down the RD-180 exclusivity agreement. 

But ULA and RD-Amross — a joint venture of United Technologies Corp. of Hartford, Conn., and Russian rocket-engine maker NPO Energomash of Moscow — claim in court documents filed in October and November that Orbital has no case under U.S. antitrust laws because Orbital has viable alternatives to the RD-180. 

Orbital failed “to make a plausible claim that [it] lacks any alternatives and thus that the RD-180 engine is essential to Orbital’s ability to compete,” ULA said in an Oct. 22 court brief.

Orbital has plenty of options, ULA said, including building its own liquid-fueled engine, as competitor Space Exploration Technologies Corp. (SpaceX) did for its Falcon 9 rocket, partnering with an engine manufacturer, as ULA did for Atlas 5, or purchasing “any of the first-stage engines used by the many other launch service providers in the world.”

In any case, RD-Amross said in a Nov. 8 court filing, the RD-180 currently cannot be sold outside of Russia except for use with Atlas 5. Any other sale requires the approval of the Russian government, over which no U.S. court has jurisdiction, the company said in court papers.

Bill Parsons, president and chief executive of RD-Amross, has tried to sell Orbital on the RD-181, which like the RD-180 is derived from Russia’s RD-170. Parsons made an overture in a Nov. 30, 2012 letter, provided to the court, in which he declined to give Orbital a price quote for an RD-180 order on which delivery would begin in mid-2016.

Pending Russian government approval to export it, “the RD-181 engine is a viable alternative product” to the RD-180, Parsons wrote in a letter to Mark Pieczynski and Jeffrey Campbell, who are respectively Orbital’s vice president for Space Launch Vehicles and director of contracts. Parsons said the Russian government began the export-approval process for the RD-181 in January 2012, and that by last November, the process was “nearing closure.” Parsons did not say how much these engines might cost, or when they might be ready for production.

Orbital, which like SpaceX is now carrying out the first flights in a four-year NASA contract to deliver cargo to the international space station through 2016, still appears keen to get its case in front of a jury.

In a Nov. 12 filing opposing the motions for dismissal, Orbital said it “will have no choice but to exit the market unless it obtains access to the RD-180 given the limited number of 40-year-old, out-of-production AJ26 engines in existence.”

AJ-26 engines are rebadged NK-33 engines built more than 40 years ago for an abandoned Soviet Moon program by the former Kuznetsov Design Bureau in Samara, Russia. The engines are refurbished and resold in the U.S. by AerojetRocketdyne of Sacramento, Calif., which has already reached an agreement with the former Soviet design bureau to restart production on the engine as soon as Orbital commits the necessary funds, company president Warren Boley said in June.

However, Orbital said in a Nov. 12 court filing that the idea of an NK-33 production restart is “pure speculation,” and that the company “has no proprietary rights in the NK-33/AJ26, no operations in Russia, and no control regarding whether or when any production could be restarted.”

Boley said in June that AerojetRocketdyne has procured 43 NK-33 engines, of which 20 have been made ready for Orbital’s station resupply missions.  

Even after refurbishment, a number of the AJ-26 engines have suffered from corrosion — the result of prolonged storage that their Soviet designers never foresaw. Boley said in June that AerojetRocketdyne has addressed the issue, although that has not yet stopped Orbital from pursuing the RD-180.

Aerojet acquired Rocketdyne from United Technologies in June under a $550 million deal rolled back to $411 million after the Russian government put a hold on the transfer of RD-Amross. Parsons told SpaceNews in late October that Energomash was still actively seeking Russian approval for the transfer and that an agreement was “99 percent complete.”

 

Follow Dan on Twitter: @Leone_SN


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