The Defense Department is making progress tightening up its Expendable Evolved Launch Vehicle (EELV) program strategy to make sure it is based on sufficient information, according to a Government Accountability Office report released yesterday.
The report, DoD is Addressing Knowledge Gaps in its New Acquisition Strategy (GAO-12-822), says DoD has implemented two of seven recommendations GAO made in a previous report, DoD Needs to Ensure New Acquisition Strategy is Based on Sufficient Information (GAO-11-641). GAO also says the Pentagon expects to complete two additional recommendations soon, has started to address two others but has not taken action on the seventh recommendation.
GAO says this is important because DoD plans to spend about $19 billion to acquire launch services from fiscal year 2013 through 2017 while total program costs are expected to reach $35 billion.
One effort DoD completed is working closely with NASA to ensure it has sufficient knowledge of NASA heavy-lift program decisions to facilitate DoD’s ability to negotiate EELV launch contract prices that maximize the government’s investment. GAO says this is important because NASA’s heavy-lift program decisions have a big potential bearing on EELV engine prices. GAO says both agencies meet quarterly to share knowledge resulting from launch acquisitions and operations, new entrant certification and space industrial base studies, in addition to SLS design and development progress.
The other completed recommendation is refraining from waving Federal Acquisition Requirements (FAR) requirements for contractor and subcontractor certified cost and pricing data as DoD finalizes its new EELV acquisition strategy. GAO says the Air Force waived in 2007 a requirement for Boeing [BA] to provide certified cost or pricing data for a significant amount of hardware associated with EELV production, believing this would afford DoD a reduced price. It instead limited government insight into cost or pricing data on a large lot of launch vehicle hardware purchased at the time.
This contributes to yearly Defense Contract Audit Agency (DCAA) reports that consistently find that United Launch Alliance (ULA), a joint venture between Boeing and Lockheed Martin [LMT], proposals are inadequate for government evaluation and contract negotiation. GAO says DoD indicates it has no intention of waiving FAR requirements for certified cost or pricing data in implementing the EELV acquisition strategy.
GAO says DoD has started, and expects to complete, an independent assessment of launch industrial base health with special attention on engine manufacturers. DoD previously lacked sufficient information on the health of the industrial base and independent analysis on how an EELV block buy would possibly stabilize that base. GAO says the Pentagon has completed, or obtained, independent cost estimates for two EELV engines, completed a study of the liquid rocket industrial base and started efforts to develop a national rocket propulsion strategy with NASA.
DoD has also started, with expectations of completing, a reassessment of the block buy contract length given the additional knowledge gained by finalizing its new EELV acquisition strategy. The Pentagon has initiated an approach to obtain critical information before negotiating, and awarding, a new EELV block buy contract. This approach includes obtaining detailed risk analysis of planned launches using DoD satellite program knowledge and data supporting contractor and subcontractor prices.
GAO says one of the two recommendations DoD needs to take more action on is ensuring launch mission assurance activities are sufficient and not excessive and identifying ways to incentivize the prime contractor to implement efficiencies without affecting mission success. The Pentagon also needs to spend more time examining how broader launch issues can be factored into future launch acquisitions to increase savings. These issues require greater coordination across federal agencies.
GAO says the one recommendation DoD has not acted on is developing a science and technology plan for improving and evolving launch technologies. This plan should link to broader space science and technology plans mandated by the 2010 national defense and NASA authorization acts.
The Air Force Space Command chief and National Reconnaissance Office (NRO) director in 2009 determined a new EELV acquisition strategy was needed due to significant increases in estimates for launch prices.
The Pentagon’s EELV program is the primary provider of launch vehicles for the U.S. military and intelligence satellites as well as some civil and commercial satellites.