SpaceX asked the House Armed Services Committee during a Tuesday hearing to stop giving their competitor what they say amounts to an unfair advantage in competing for national security satellite launch contracts.
At the center of SpaceX concerns is what they charge amounts to a $1 billion subsidy and effective monopoly for United Launch Alliance, a joint venture between Boeing and Lockheed Martin.
For several years, SpaceX and ULA have engaged in a fierce battle to compete for lucrative contracts to launch national security satellites as part of the Air Force’s Evolved Expendable Launch Vehicle (EELV) program.
The program is now among the biggest in the entire U.S. defense budget, with projected costs of $70 billion through 2030. During the past year, the program has landed at the epicenter of concern for Air Force officials and relevant Congressional members.
“These are space capabilities that American lives may literally rely upon,” said Rep Mike Rogers, Alabama Republican and chairman of the Armed Services subcommittee on strategic forces.
Currently, the EELV program launches the military’s space missions with two rockets, both of which are provided by ULA — the Atlas V, manufactured by Lockheed Martin, and the Delta IV, made by Boeing.
SpaceX has repeatedly charged that government payments to cover ULA overhead costs amounts to a $1 billion “subsidy” and the Air Force’s rigorous “certification” cost and accountability process amounts to a monopoly for ULA, which they argue is cost-ineffective for the Air Force.
“The cost of the EELV program has become unsustainable,” said Gwynne Shotwell, SpaceX’s chief operating officer, in her opening statement. “According to the GAO, the price per EELV launch has quadrupled from one-hundred to four-hundred million dollars.”
SpaceX could perform the same EELV launches for only $100 million, she said.
ULA’s “monopoly” label stems from the fact that the joint venture already has a cost and accountability procedure in effect to meet USAF certification requirements. To date, the process has kept SpaceX out of the competitive bidding process, and the Air Force has spent $60 million to help the company reach certification.
The company projects it will satisfy certification requirements by June, a step some USAF officials are looking forward to.
“Make no mistake, national security will be improved the day SpaceX is certified,” testified William LaPlante, the Air Force assistant secretary who oversees acquisition issues.
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In addition to the monopoly and subsidy labels, ULA carries a separate public relations burden because of its use of Russian RD-180 rocket engines. Congress placed an effective ban on the RD-180, requiring that it be phased out by 2019, and ULA is currently working with Jeff Bezos’ aerospace company Blue Origins to develop a replacement engine.
Still, the company insists its proven track record is what should remain at the center of the EELV debate.
“We enjoy a perfect success record with 94 flights,” testified ULA CEO Tory Bruno. “This is a record no one has yet to match, and from our perspective when you’re launching national security mission upon which lives depend, liability matters.”
Mr. Bruno added that ULA was taking steps to lower EELV costs by phasing out the more expensive Delta IV launches by 2018 and reducing the number of launch pads the joint venture currently uses.
• Jeffrey Scott Shapiro can be reached at jshapiro@washingtontimes.com.
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