Battle Looming over Russian Engine Ban in U.S. Defense Bill

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WASHINGTON — A provision in the pending defense authorization bill that ultimately would ban the use of Russian-built engines in launching U.S. national security satellites is expected to be the subject of debate in the coming weeks that could divide members of the House, sources said.

The Senate version of the National Defense Authorization Act for 2015 specifically bars the Pentagon from signing new contracts or renewing existing contracts with launch companies that rely on Russian suppliers. The language, inserted into the bill by Senate Armed Services Committee member John McCain (R-Ariz.), appears to target government launch services provider United Launch Alliance, whose Atlas 5 rocket features a Russian-built main engine dubbed RD-180.

ULA currently launches the lion’s share of high-value U.S. government payloads, particularly those used by the military. The Boeing-Lockheed Martin joint venture, which also operates the Delta 4 rocket powered by U.S.-made engines, recently was awarded a sole-source contract to continue launching national security payloads at least through 2018.

The Defense Department’s reliance on the Atlas 5 has come under fire in recent months amid the rapid deterioration of U.S.-Russian relations.

Tory Bruno, chief executive of Denver-based ULA, characterized the bill’s Russian-engine provision as “very damaging” and “anti-competitive.” Among his concerns is that the language would hinder ULA’s use of the Atlas 5 under the current block buy contract.

“I don’t believe the authors meant for it to do what it actually would do,” Bruno said in an interview. “Unfortunately, the way it was worded, I believe inadvertently, it even prohibits us from offering Deltas because we have the Atlas product line and the RD-180 still delivering out missions. It would just be terrible. It would be so anti-competitive because it would take your most important provider and say you can no longer participate.”

Other organizations, such as the Satellite Industry Association, a trade group here, also oppose the language, in part out of fear that it would be applied too broadly across the space business, which relies on a variety of Russian technologies.

But sources told SpaceNews the language explicitly would not apply to ULA’s current $11 billion block buy contract, which includes the purchase of a combined 36 Atlas 5 and Delta 4 rocket cores.

Rather, these sources say, the language is aimed at ending the reliance on Russian engines after the current contract is completed, by which time relative newcomer Space Exploration Technologies Corp. should be well established in the national security market with its Falcon 9 rocket. In addition, there are plans in the works for an American-built alternative to the RD-180, which could be available by around 2018.

The provision in question, specifically known as Section 1623, prohibits the secretary of defense from “entering into a new contract or renewing a current contract for space launch supplies if those supplies are provided by Russian suppliers,” language in the report accompanying the Senate version of the bill said.

“The committee also strongly recommends that if the Secretary of Defense determines that a waiver is issued under this section for the procurement of rocket engines, the waiver should be approved well in advance of the start of contract negotiations,” the report reads.

ULA currently has about two years worth of RD-180 engines in its inventory and has worked to accelerate delivery of the remaining engines ordered under its existing contract with RD-Amross, the U.S.-Russian joint venture that imports the hardware. The last of those engines, previously slated to arrive in 2018, is now expected in 2017.

The prohibition had strong support in the Senate Armed Services Committee. ULA’s supporters in the House, which in the coming weeks will be negotiating a final version of the defense authorization bill with the Senate, appear more wary.

Rep. Mike Rogers (R-Ala.), chairman of the House Armed Services strategic forces subcommittee, told SpaceNews in September that the House staff planned to focus on the issue during conference negotiations to ensure the language does not apply to ULA’s current contract.

On Oct. 9, Reps. Mike Coffman and Doug Lamborn, both Colorado Republicans, wrote to the leaders of the defense oversight committees to express their opposition to the language. In the letter, the lawmakers said the language would “eliminate its best launcher from competition” and noted “serious concerns” if no other companies could meet national security demands.

But these concerns are not universally shared in the House. Notably, Rep. Duncan Hunter (R-Calif.), a member of the House Armed Services Committee, has voiced his support for the Senate language.

The Air Force did not respond by press time to a request for comment, but in an October list of appeals submitted to Capitol Hill in advance of the conference negotiations, the service did not object to the language.