The Air Force secretary said he hopes the government’s new unified approach to buying the Evolved Expendable Launch Vehicle (EELV) will help both taxpayers and United Launch Alliance (ULA).
The alliance, a joint venture between Lockheed Martin [LMT] and Boeing [BA], builds the EELV medium-and-heavy-space-launch system, made up of Delta IV and Atlas V rockets. The Air Force, NASA, and the National Reconnaissance Office all buy launch services from ULA, which now is the only supplier for that class of launch vehicles. The three government entities have been working to stabilize the industrial base for the EELV category of boosters to “get the best deal for the taxpayer,” service secretary Michael Donley told the House Appropriations Defense subcommittee (HAC-D).
The government plans to “stabilize” the launch purchases at nine per year, five of which are for the Pentagon and one of which is for NASA.
“That has been identified to us, thorough a Defense Science Board study and other technical work, as the minimum, essential production line for EELV,” Donley said at a Air Force budget hearing March 31. “So we’re stabilizing production for EELVs, and we intend to approach ULA with a unified government position on pricing.”
Donley told HAC-D member Rep. Pete Visclosky (D-Ind.) this move is intended to help maintain the viability of ULA, at this time when the EELV program is facing rising costs following NASA’s termination of the Constellation manned-spaceflight program.
“I think this will be helpful to ULA, to know that there is a steady requirement against which they can plan,” Donley said. “Inconsistent requirements in the space industrial base, in particular, has been a challenge for the (military), and it has been a costly challenge. So this is about getting the best deal for the taxpayer and making sure we get a coordinated government approach to buying these fairly common goods from a single supplier.”
Donley noted that “a number” of commercial providers want to work with the Pentagon to provide launches for the larger size payloads EELV can handle. Those companies expected a significant commercial-space-launch market that did not materialize.
“Now those commercial partners also want to get into the (Department of Defense) DoD business as well, and we will be happy to have them, because I think that will generate more competition in the space launch work,” the Air Force secretary said. “Our immediate focus, for new commercial entrants is to establish the baseline criteria for mission assurance.”
Rep. Ken Calvert (R-Calif.) said he hopes competitors emerge to ULA.
“We all respect ULA, they do a good job, but at some point, that market’s got to broaden up,” he said.
Air Force Space Command is working with NASA and the NRO on criteria for new companies to work in this realm.
“Mission assurance is a very high standard for us, but it’s a very expensive one, as well,” Donley said. “As we develop alternatives, where new entrants come into the market with new ideas and capabilities, we’re happy to bring those in for the competitive pressure that it brings, but we also want to maintain the standard of mission assurance and make sure we can get the payloads to orbit.”
Air Force Chief of Staff Gen. Norton Schwartz said the Air Force will be cautious when working to contract with new companies for EELV-type launches.
“I would be very conservative about putting a billion and a half (dollars) atop a new launcher for the first time,” Schwartz said. “What we need to do is to have a mechanism where we can allow a new entrant to develop their system, for the confidence to increase, to demonstrate reliability before we go to the crown jewel payloads. And that’s sort of the thing we’re trying hard to get to.”
For ULA’s EELV, Donley said he is “concerned” with the rising cost of the launches.
“We have a lot of focus this year on driving down those costs,” he said.
Air Force Undersecretary Erin Conaton recently said the service found funding for the increased EELV costs and by identifying other savings through Defense Secretary Robert Gates’ so-called efficiencies initiative (Defense Daily, March 21). Also, Air Force Space and Missile Systems Center is working to implement dozens of money-saving recommendations that resulted from a blue-ribbon external review and an Air Force should-cost review, Conaton said.
The Air Force has committed to buy four of the five EELVs that the Pentagon plans to buy in fiscal year 2012 and FY ’13, and five EELVs per year for the remainder of the Future Years Defense Program. The service’s FY ’12 budget request seeks $1.7 billion for EELV, which is $400 million more than the Pentagon requested for FY ’11.