U.S. Air Force To Ask ULA for Prices on Several Rocket-procurement Scenarios

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WASHINGTON Seeking to curb the rising cost of launching national security satellites while stabilizing the U.S. rocket manufacturing industrial base, the U.S. Air Force will ask its primary launch services provider to bid its best price for different block-procurement scenarios ranging from six to 10 booster cores per year over a period of three to five years, the service said.

In a statement released Oct. 24 in response to an audit report recommending that it reassess its Evolved Expendable Launch Vehicle (EELV) block buy strategy, the Air Force said it would choose a contract scenario based on factors including price, requirements and the desire to foster competition. “By examining a range of contract options and terms for EELV procurement, and by examining progress by new entrants in the coming months, the Air Force will be well-positioned to identify the best balance of these priorities and the best value for the taxpayer,” the Air Force said.

The audit report, prepared by the U.S. Government Accountability Office (GAO) and released Oct. 17, said the Pentagon has insufficient information to proceed with the EELV block buy strategy, which calls for buying a combined eight Atlas 5 and Delta 4 rocket booster cores per year over the next five years. The report warned that by pressing ahead with the block buy, the Pentagon might wind up with excess inventory acquired at higher-than-necessary prices.

In its Oct. 24 statement, the Air Force, which along with the U.S. National Reconnaissance Office (NRO) funds the EELV program, said it agrees that additional data are needed before it can execute its procurement strategy.

“Indeed, the Air Force acquisition strategy is based on gathering more and better information prior to any specific contract negotiations,” the service said. “It should also be noted that GAO performed their audit prior to the bulk of the work done to build the acquisition strategy.”

The EELV program, used to launch the vast majority of U.S. government satellites, has seen its cost soar in recent years, which experts have attributed in part to higher propulsion costs due to a shrinking overall market. As prime contractor on the EELV program, United Launch Alliance (ULA), a Boeing-Lockheed Martin joint venture, enjoys a virtual monopoly on launching U.S. national security satellites.

Some U.S. lawmakers have been critical of EELV program cost growth in recent years, saying it underscores the need for competition. One company in particular, Space Exploration Technologies Corp. (SpaceX) of Hawthorne, Calif., has been working hard over the last year or so to break into the U.S. national security launch market, so far without measurable success.

But the Air Force, NASA and NRO the latter agency buys and operates the nation’s classified spy satellites recently announced an agreement on standards for bringing new entrants into the government launch market. The agreement was hailed by SpaceX as a step toward introducing competition that can help bring prices down.

SpaceX has a NASA contract to deliver cargo to the international space station using its new Falcon 9 rocket, but the U.S. civil space agency still relies almost exclusively on ULA’s proven Atlas 5 rocket for launching its high-priority scientific satellites. ULA is developing a heavy-lift rocket with an eye toward the Pentagon market.

“With the newly released New Entrant Certification Strategy, the Air Force along with NASA and NRO is working to facilitate the certification of new entrants who want to compete for EELV-class missions,” the Air Force said in its statement.

The Air Force and National Reconnaissance Office plan to spend some $15 billion to acquire launch services from 2013 through 2017, the GAO report said.