Justice Department reaches deal with company implicated in Taurus launch failures

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WASHINGTON — The Justice Department has reached a settlement with the company that provided faulty components that led to the failure of back-to-back Taurus launches for NASA.

In an April 23 statement, the Justice Department said it reached a plea agreement with Oregon-based Hydro Extrusion Portland, Inc., formerly known as Sapa Profiles Inc. (SPI), and its parent company, Hydro Extrusion USA, LLC, formerly known as Sapa Extrusions Inc. (SEI), over charges that they falsified test results for aluminum extrusions it manufactured for various customers, including the U.S. government.

SPI agreed to plead guilty to one count of mail fraud while SEI entered into a deferred prosecution agreement. SPI will pay $34.1 million in combined restitution to NASA, the Missile Defense Agency (MDA) and commercial customers, and forfeit $1.8 million in “ill-gotten gains.” The company will also pay an additional $6 million to NASA and $5 million to MDA as part of a separate civil settlement.

The companies acknowledged that SPI altered test results for nearly two decades, starting in the mid-1990s, such that aluminum extrusions that had failed mechanical properties testing instead appeared to have passed. Dennis Balius, a testing lab supervisor at SPI who led the effort to falsify test results for a number of years, pled guilty on separate charges in 2017 and was sentenced to three years in prison.

Those aluminum components were sold to a number of companies, including those who had contracts with NASA and MDA. The Justice Department statement noted that the components were used in frangible joints in launch vehicles and missiles. Such joints are used in vehicle separation systems.

“NASA maintains that SPI’s manufacturing processes lacked sufficient controls and produced extrusions unable to pass mechanical properties testing,” the Justice Department stated. “NASA further maintains that it identified SPI’s out-of-specification extrusions as the cause of two failed rocket launches, which resulted in the loss of important scientific missions.” SPI disputed those claims, although NASA has barred the company from contracting.

The statement doesn’t mention the launches that failed, or the government contractor who purchased the extrusion from SPI, but court documents refer to a NASA contract awarded in 1998 to Orbital Sciences Corp. for Pegasus and Taurus launches. The company suffered failures of Taurus launches in 2009 of the Orbiting Carbon Observatory satellite and in 2011 of the Glory satellite, both NASA Earth science missions.

In both cases, the Taurus’ payload fairing failed to separate, preventing the payload from reaching orbit. The investigations into both failures did not yield a single root cause, but did identify issues with frangible joint components as potential causes.

After the Glory launch failure, NASA recommended that Orbital take further steps to “establish frangible joint system manufacturing process controls sufficient to assure that variability in materials properties and hardware component dimensions” did not affect performance and develop “a qualification and test activity for the Taurus frangible joint system based on the results of an extensive failure analysis.”

A subsequent investigation by NASA’s Office of Inspector General (OIG) uncovered evidence of the test alterations at SPI, an investigation that later included the Justice Department and the Defense Criminal Investigative Service. NASA estimated that it spent $9 million on the overall investigation.

“The results of this investigation are indicative of the law enforcement community’s unwavering commitment to protecting the aerospace supply chain,” Paul Martin, NASA inspector general, said in the Justice Department statement. “I am very proud of the central role the NASA OIG played in unraveling the test falsification scheme.”

The Taurus rocket, now called Minotaur-C, has flown only once since the 2011 Glory launch failure. In October 2017 it successfully launched a set of commercial imaging satellites for Planet.