Senate Armed Services Committee (SASC) member John McCain (R-Ariz.) Friday questioned the true cost of the RD-180 Russian-made rocket engine to the Air Force.
In a letter to Under Secretary of Defense for Acquisition, Technology and Logistics (AT&L) Frank Kendall, McCain said he is aware of claims that the engines have been sold by manufacturer NPO Energomash to RD AMROSS, the joint venture created to distribute the RD-180 in the United States, at a “much lower price” than what RD AMROSS charges launch provider United Launch Alliance (ULA). McCain cited the World Bank, saying the Russian procurement process is rife with inefficiency and corruption that benefits insiders while boosting retail prices.
McCain said ULA, and ultimately the Air Force, buys the RD-180 for a price that is significantly more than how much NPO Energomash sells the engine to RD AMROSS, resulting in taxpayers essentially giving a Russian company a profit by perhaps more than 200 percent. RD AMROSS is a joint venture of NPO Energomash and Pratt & Whitney of United Technologies Corp. [UTX]
“Given the foregoing and the opacity of costs associated with the procurement of the RD-180, it is important for the Air Force to establish affirmatively the fairness and reasonableness of how much it (and, therefore, the U.S. taxpayer) is paying for the RD-180, despite the fact it procures the RD-180 under a firm fixed-price contract line item,” McCain said.
Emails to McCain’s office and the Air Force were not returned by press time.
The Air Force is reviewing the possibility of a future without the RD-180, which ULA uses in its Atlas V launch vehicles. A recent blue ribbon panel decided that the Air Force needs to make a decision, and make one quickly, on how to proceed with or without the RD-180 as Capitol Hill criticism has increased since the Russian occupation of Crimea and Russian Deputy Prime Minister Dmitry Rogozin allegedly threatening to cut off supplies of the engine if used if future military launches (Defense Daily, May 21). NPO Energomash is believed to have Russian state ownership.
ULA announced June 18 it awarded study contracts to multiple U.S.-based companies to investigate next-generation liquid oxygen (LOX)/hydrocarbon first stage propulsion concepts. ULA CEO Michael Gass also said the company is willing to develop a next-generation rocket engine without government investment, but warned a purely private program could deliver the U.S. less advanced technology (Defense Daily, June 18).
SASC approved in its fiscal year 2015 authorization bill barring the defense secretary from entering into a new contract, or renewing a current contract, for space launch supplies if they are provided by Russian suppliers, as is the case with the RD-180.
But the text gives the Pentagon an out, saying the defense secretary can waive the prohibition if it can be certified to congressional defense committees 30 days in advance that the waiver is necessary for national security interests and that the launch services and capabilities could not be obtained at a fair and reasonable price elsewhere (Defense Daily, June 5).
ULA is a joint venture of Boeing [BA] and Lockheed Martin [LMT].