Space Launch Executives Get Testy Over Rocket Contracts

Launching large satellites is one of the more risky and expensive duties the U.S. military must perform. A failure means millions of taxpayer dollars down the drain, and years of delays in replacing the lost spacecraft.
 
How to stabilize the cost of sending these pricey spacecraft into orbit — now more than $150 million per launch — is the subject of controversy in the industry.
The discussion elicited a vigorous debate between two launch company representatives March 13 at the Satellite 2012 conference in Washington, D.C. One was an executive representing the established launch provider. The other spoke for a start-up company that wants to break into the lucrative government launch services business.
 
At the heart of the debate is a proposal by the Air Force to buy a preset number of Evolved Expendable Launch Vehicle (EELV) booster rockets designed to lift the heaviest military and spy satellites into space. Buying eight rockets per year would bring stability to the industrial base and keep costs down until the end of the proposed contract in 2020, or so the thinking goes.
 
Gwynne Shotwell, president of SpaceX, argued that a block buy would hand over a monopoly to the incumbent, United Launch Alliance, until the end of the decade.
Cliff Perkins, director of strategic initiatives at Lockheed Martin Commercial Launch Services — representing one half of the Lockheed Martin-Boeing joint venture United Launch Alliance -- countered that giving contracts to SpaceX would be “cavalier” because its rockets do not have a long track record.
 
Congress is skeptical of the block buy. It required in the 2012 defense authorization bill that the Air Force keep close tabs on the cost-savings. It also reclassified the EELV has an “acquisition” program rather than a “sustainment” program. That distinction will require that the Air Force carry out more stringent reporting on program costs. Sen. John McCain, R-Ariz., sponsored the legislation and has been a leading critic of the proposal. The Government Accountability Office in a report last year also questioned whether the Air Force will end up with excess rockets.
   
Perkins argued that the block buy will stabilize launch prices. Every rocket that the nation has used has gone into a curve where the cost of supporting it becomes “astronomical and gets out of control,” he said.
 
The plan will make orders more predictable for lower-tier contractors that supply parts to the EELV. Some of these are “single-point-of-failure” companies, which are the only ones that produce certain specialized parts. If they go out of business, then there is no one around to replace their capabilities, he said. Dependability is paramount, Perkins added. When launching national security satellites the nation depends on, crashes mean that vital spacecraft don’t make it to orbit.
 
“If you think that a process like that is not very fair, then think of the other side. You’ve got all these people out there who are serving the national interest, who are putting their lives on the line every day. And they need those space systems to be functioning, and up there ready to go at all times,” he said.
 
“I absolutely agree that we should [award launch contracts] competitively. The block buy system gives us time to let that be something that is not cavalier,” Perkins said.
 
Shotwell disagreed. “I would have been shocked if Cliff had said that it was a terrible idea to lock out the U.S. government launch market through 2020,” she said. “I’m a taxpayer. I am horrified by ULA’s prices. They are the highest in the world,” she added.
 
She argued that some satellite programs that could have helped save lives on the battlefield have been cancelled because of the mounting launch costs.
 
When asked later to clarify what he meant by “cavalier,” Perkins said the block buy would hold costs static for the next 50 missions. That would give time for SpaceX or other launch providers, “to enter after they have truly launched and met the Air Force requirements … Without that, I think it is cavalier. If you don’t have that level of success, you put systems at risk,” he said. Shotwell did not respond to this statement.
 
Lockheed Martin and Boeing, the two major U.S. companies capable of launching heavy, NASA, Air Force and National Reconnaissance Office satellites into geostationary orbit some 25,000 above Earth, ended their decades long competition and formed the joint venture in 2005.
 
The EELV program comprises two rockets: the Lockheed Martin’s Atlas V and Boeing’s Delta IV. The Atlas V has flown 29 missions, with 28 deemed a success, and one that left two satellites in lower than expected orbit because of an upper stage malfunction. That was considered a partial success. The Delta IV has flown 18 missions with one deemed a partial success.
 
SpaceX, which was founded only a decade ago by billionaire Elon Musk, has surprised the industry with its rapid progress. It has developed two rockets, the Falcon 1 and 9. It is working on the Falcon Heavy, which is intended for geo-stationary orbit launches, but won’t have its first flight until 2013.  It also has a NASA contract for unmanned international space station resupply spacecraft. It has landed several contracts to launch commercial satellites, and company executives have long sought to break into the government launch services market. It received funding from the Defense Advanced Research Projects Agency to develop a lower cost rocket, but the military has yet to take advantage of this investment.
 
Last year, the Air Force, NASA and the NRO released a list of criteria new entrants to the launch industry will have to meet in order for their rockets to be certified to win government contracts. It was an important development for SpaceX, which was looking for clarification on what exactly it needed to do to prove their rockets worthy. Previously, the three agencies had three different sets of criteria.
 
Barron Beneski, a spokesman for Orbital Sciences Corp., told National Defense that the increasingly high price of launching large satellites is benefiting companies such as his that offer smaller rockets. The government is looking to save money by buying smaller satellites that can be placed aboard Orbital’s Pegasus, Taurus, Minotaur and Antares rockets, he said.
 
Follow this blog for more news about the space industry April 16-19 at the National Space Symposium in Colorado Springs, Colo.
 
 
 

Topics: Procurement, Space