Amendments Call for Tighter Scrutiny of EELV Program

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WASHINGTON — The U.S. Defense Department’s primary satellite launching program would be subjected to tighter internal and congressional scrutiny under an amendment to the Senate version of the National Defense Authorization Act of 2012 that was added Nov. 18.

A related amendment, to be considered as early as Nov. 28, directs the U.S. Air Force to document plans to implement the recommendations of a recent Government Accountability Office (GAO) report that urged the service to rethink its current launch vehicle procurement strategy, which calls for block buys of Atlas 5 and Delta 4 rockets.

Both amendments pertaining to the Air Force’s Evolved Expendable Launch Vehicle (EELV) program were authored by Sen. John McCain (R-Ariz.), the ranking member of the Senate Armed Services Committee, which drafted a new version of its National Defense Authorization Act Nov. 15. The measure updates legislation that previously was introduced in June, but would reduce overall Pentagon spending by an additional $21 billion above the $27 billion target set in the Budget Control Act of 2011, according to a press release issued Nov. 15 by the committee leadership.

The McCain amendments come at a time of heightened congressional concern over the cost of the EELV program, which launches the vast majority of operational military and intelligence satellites. United Launch Alliance of Denver, a Boeing-Lockheed Martin joint venture, is the EELV prime contractor, manufacturing and providing launches on its Atlas 5 and Delta 4 rocket families.

EELV program costs have grown significantly in recent years, due in part to a combination of low rocket production rates and rising propulsion costs. The retirement of NASA’s space shuttle has contributed to the latter by forcing contractors that had worked on both programs to shift more overhead costs to the EELV effort.

The Air Force’s plan to stabilize EELV costs, referred to as the block buy strategy, calls for buying up to 50 Atlas 5 and Delta 4 booster cores over a five-year period. But some U.S. lawmakers believe there might be a better answer in the form of competition from companies like Space Exploration Technologies Corp. (SpaceX) of Hawthorne, Calif., which has set its sights on breaking United Launch Alliance’s virtual monopoly on the Pentagon launch market.

The first of McCain’s two amendments, now a part of the Senate’s bill, directs the secretary of defense to change EELV’s status from an ongoing sustainment program to a “major acquisition program,” a move that would subject it to more stringent reporting requirements. Under current law, the military services must alert Congress when one of their acquisition programs incurs cost growth above a certain threshold, and in severe cases must provide a justification for the program’s continuation.

In lieu of making that change, the defense secretary would be required to “provide to the congressional defense committees all information with respect to the cost, schedule, and performance of the program that would be required” if the EELV were designated as a major acquisition program. In addition, the program would have to provide the Pentagon’s top acquisition official with quarterly cost and status reports that would give advance warning of brewing problems, the amendment says.

The second amendment would direct the Pentagon to include in the documentation supporting its 2013 budget request a description of how the current EELV procurement strategy complies with each of the recommendations of the recent GAO report on the program. That report, dubbed “Evolved Expendable Launch Vehicle: DOD Needs to Ensure New Acquisition is Based on Sufficient Information” and dated Sept. 15, said pressing ahead with the proposed block buy strategy could result in the Air Force buying more rockets than its needs at prices that might be too high.

The Air Force plans to initiate its block procurement next year, but the GAO urged the service to wait until it has better information about what the vehicles should cost. The report said the Air Force does not have adequate insight into EELV costs and that NASA’s impending announcement of a heavy-lift rocket procurement plan could impact the cost of Atlas 5 and Delta 4 propulsion systems.

NASA has since unveiled plans for a heavy-lift Space Launch System that would utilize a derivative of the space shuttle main engine, built by Pratt & Whitney Rocketdyne of Canoga Park, Calif. Pratt & Whitney Rocketdyne also produces the main engine for the Delta 4 and the upper stage for both that vehicle and the Atlas 5.

The Air Force fully concurred with all of the GAO’s recommendations with the exception of the recommendation that it reassess its block buy strategy. In partially concurring with that recommendation, the service said it would balance its decision on the number of rockets to be procured over what time period against the price, its satellite-launching requirements, “budget realities and the potential for new entrant competition.”

McCain’s proposed amendment says that for those GAO recommendations that are not implemented, the Defense Department must explain how it is otherwise addressing the issues cited in the report. The amendment further directs the U.S. comptroller general to review the requested EELV information and report back with its own assessment within 60 days of when it is received on Capitol Hill.

Meanwhile, the bill follows the lead of House authorizers, who in a bill drafted in April approved the Air Force’s plan to simultaneously procure Advanced Extremely High Frequency satellites Nos. 5 and 6 under a fixed-price contract. The Senate bill caps the cost of the two satellites at $3.1 billion — excluding certain plans, support costs, and support for component obsolescence studies — provided incrementally over a six-year period. That cost cap can be raised with written notification if the program incurs cost growth as a result of newly enacted laws, economic inflation or the insertion of new technology that either reduces the life-cycle cost of the satellites or is required to address an “emerging threat that poses grave harm” to U.S. national security.

The bill directs the Air Force to submit reports documenting the savings to be realized by the dual satellite procurement. The Air Force should not enter into the fixed-price contract for two satellites unless doing so results in cost savings of 20 percent over procuring the satellites separately, the bill says.

 

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