ULA, SpaceX Lobby Up as Launch Competition Looms

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WASHINGTON — As they vie for hundreds of millions of dollars in national security launch contracts, incumbent United Launch Alliance and newcomer Space Exploration Technologies Corp. have more than doubled their lobbying expenses in recent years.

According to data provided by the Center for Responsive Politics, which tracks campaign finance and lobbyist records at OpenSecrets.org, ULA of Denver spent about $670,000 on lobbying efforts in 2013. That figure is up from the $120,000 the company spent in 2010, according to the site.

SpaceX of Hawthorne, Calif., spent $1.1 million on lobbying in 2013, including hiring former U.S. Sens. John Breaux and Trent Lott. The company’s lobbying costs have risen steadily from about $568,000 in 2010.

The higher spending by both companies comes as lobbying expenditures across the defense aerospace industry have shrunk slightly.

“The increase in lobbying dollars from SpaceX in recent years is in direct response to the entrenched incumbents leveraging all resources — including lobbying efforts from suppliers like Aerojet Rocketdyne and ATK — to keep New Entrants like SpaceX out of the DOD market,” Emily Shanklin, a spokeswoman for SpaceX, said in a April 9 email. “No matter how much the current monopoly spends to protect their interests, the fact remains that competition benefits everyone — including our national security program and the American taxpayer.”

Shanklin also said SpaceX’s lobbying costs are far less than those of ULA’s parent corporations. ULA is a joint venture of defense giants Boeing and Lockheed Martin. Combined, the two companies spend roughly $30 million annually on lobbying efforts, making them the two biggest spenders among defense aerospace contractors. 

But industry sources said ULA largely does not benefit from Lockheed or Boeing’s lobbying efforts. 

“ULA operates as a separate entity from our member companies,” Jessica Rye, a ULA spokeswoman, said in an April 11 email. “While Boeing and Lockheed do advocate for ULA, the vast majority of Congressional and customer engagement is executed solely by ULA.”

SpaceX’s most recent annual lobbying tab ranks sixth among defense aerospace contractors, coming in well behind Boeing, Lockheed Martin, United Technologies, BAE Systems and Airbus Group but ahead of Aerojet Rocketdyne’s parent corporation, Rockwell Collins, and Finmeccanica. ULA ranks 10th, just ahead of Ball Aerospace & Technologies Corp.

Lawmakers have long expressed frustration about the high costs of the Evolved Expendable Launch Vehicle program and many view competition as the answer. As EELV prime contractor, ULA currently has a virtual monopoly on national security launches, but companies such as SpaceX are vying for a piece of the action.

In 2012, the Air Force announced it was negotiating the purchase, on a sole-source basis, of as many as 36 Atlas and Delta rocket cores over five years from ULA. At the same time, however, the service said it planned to competitively award an additional 14 missions to give companies such as SpaceX a crack at the market.  

In March, however, Air Force leaders said only seven or eight such missions would be competitively awarded from 2015 to 2017, half as many as originally expected. Five of the deferred launches are expected to be available for bid after 2017. 

The decision has led to a new round of congressional scrutiny. In recent weeks, lawmakers have repeatedly questioned Defense Department leaders, including Defense Secretary Chuck Hagel and Air Force Secretary Deborah Lee James, in a series of hearings and committee meetings about the details of the competition. Congress members have also discussed ULA’s reliance on the Russian-built RD-180 engine to power the main stage of its Atlas 5 rocket, one of two workhorses in that company’s fleet. The Pentagon’s dependence on Russian rocket engines is a sticking point for many lawmakers on defense committees.

Sen. Richard Durbin (D-Ill.), chairman of the Senate Appropriations defense subcommittee, held a hearing in March on launch, the first in several years. In an April 1 letter to Hagel, a group of seven senators said the decision to shrink the number of Atlas 5-  and Delta 4-class missions eligible for competition to seven from 14 should be “immediately reviewed.” 

Spending on lobbying in the defense aerospace field, as defined by OpenSecrets.org, has remained relatively flat for the last four years, shrinking from $63 million to $57.8 million. However, the amount spent by ULA and SpaceX has increased. While the two companies made up just 1 percent of defense aerospace lobbying dollars in 2010, they made up 3.1 percent in 2013.

In addition, SpaceX has spent about $115,000 through its political action committee in the 2014 election cycle, an increase thus far of about $40,000 from the 2010 cycle, according to the Center for Responsive Politics. SpaceX Chief Executive Elon Musk has made political contributions as an individual totaling about $40,000 in the 2014 cycle, according to the center.

ULA does not have a political action committee, according to the center. In 2013, the company’s chief executive, Michael Gass, made a $1,000 contribution to Sen. Mark Udall (D-Colo.), the chairman of the Armed Forces strategic forces subcommittee, which oversees many space issues. 

Lobbyist disclosures for the first quarter of 2014 are due to the House clerk’s office April 21.

 

Follow Mike on Twitter: @Gruss_SN


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