When you’re losing money, it can be tempting to try to catch up by investing even more. But this is typically an ill-fated strategy, whether it’s Las Vegas, the stock market or the Pentagon’s budget. In fact, as virtually any investment professional will tell you (probably for a hefty fee), diversity is the key to a successful portfolio. And it’s no different when it comes to buying space transportation.
It’s undeniable that U.S. taxpayers are currently losing when it comes to space transportation services for the Pentagon. Under the Air Force’s Evolved Expendable Launch Vehicle (EELV) program, budgets have quadrupled since the Department of Defense allowed Boeing and Lockheed to merge their launch business into a single monopoly provider,( ), in 2006.
Now ULA is back for another bailout, pushing the Pentagon to write the company a $15 billion check for a five-year, sole source deal that will, according the nonpartisan Government Accountability Office (GAO), commit the Defense Department to more rockets than it needs at a higher price than it needs to pay. Following a yearlong investigation, GAO recently notified Congress and the Pentagon that the Air Force’s planned block purchase is based on incomplete information, and recommended that the Defense Department “reassess the length of the proposed block buy” [“Report Urges Pentagon To Reassess EELV Block Procurement Plan,” Oct. 24, page 10].
GAO’s findings are stark. This planned block buy will commit the Defense Department to more rockets than it needs, cost more than is necessary, and significantly inhibit competition. None of this makes sense for American taxpayers.
To add insult to injury, GAO found that one of the major reasons ULA prices are increasing is the cost of the main engine on the Atlas launch vehicle, which is made in Russia. To say nothing of the national security implications of relying on a Russian company for national security space launch, it is simply irresponsible in this fiscal environment to send taxpayer dollars overseas rather than using all-American alternatives that would create and sustain American jobs.
It’s time for the Pentagon to rethink its planned acquisition.
The Taxpayers Protection Alliance supports the GAO’s recommendation that the Defense Department reassess its block buy acquisition approach and its time-tested conclusion that competition would lower prices and yield cost savings for the American taxpayer.
President, Taxpayers Protection Alliance
Alexandria , Va.