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Defense Hawks May Look to Boost Competition in Air Force Satellite Launches

The Air Force’s space program is facing tough scrutiny on Capitol Hill as influential lawmakers in both parties publicly question the service’s commitment to competition in the increasingly lucrative area of satellite launches.

United Launch Alliance LLC, a joint venture between defense giants Boeing Co. and Lockheed Martin Corp., currently has a stranglehold on the Evolved Expendable Launch Vehicle program. The firm, which won a multibillion-dollar deal for 36 rockets, is the only one certified to do the complex work of launching satellites into space.

But other companies are close to getting a piece of the business, with as many as 14 future launches up for grabs.

The Air Force plans to certify new entrants by the end of this year for so-called light launches, while others will be certified in 2017 for the heavy satellite launches. The Air Force’s certification process is particularly arduous, considering the price of individual satellites — which can exceed $1 billion — and the potentially catastrophic consequences of a failed launch.

“The key thing is we have to get new entrants qualified in both categories, which we are going to do,” Air Force Secretary Deborah Lee James told reporters after an April 2 hearing.

The problem, however, is that many of those launches have been delayed beyond the Pentagon’s five-year budget plan, creating significant uncertainty for companies such as SpaceX, a California-based firm that has positioned itself as ULA’s biggest competitor for this business.

The Pentagon had planned a competition for those launches for as early as next year, but the fiscal 2015 request does not include any funding for a competition. The long-term spending plan, meanwhile, reduces from 14 to seven the number of missions to be completed between 2015 and 2017.

Lawmakers have long been concerned that ULA’s monopoly on the satellite launches will only drive up the costs on a program that the Pentagon’s independent cost estimators believe will cost a hefty $70 billion through 2030. Air Force officials have said that the mere threat of competition has already reduced program costs by more than $1 billion.

Mark Bitterman, a ULA spokesman, said the company is preparing for competition by seeking ways to cut costs and become more efficient.

“It’s real and we know we’re going to have to compete,” Bitterman said.

Adding to the urgency on Capitol Hill, however, is that ULA’s Atlas V rocket relies on a Russian-built rocket engine, a matter of concern both in Congress and within the Pentagon as Washington’s relationship with Moscow deteriorates in the wake of Russia’s incursion in Crimea.

ULA says it has a two-year supply of the engines, but the mere use of Russian technology in a sensitive and expensive military system has already raised eyebrows on Capitol Hill.

The competition issue has percolated at several recent hearings on the Air Force’s fiscal 2015 budget request, a clear indication that lawmakers are considering addressing it in the annual defense appropriations and authorization bills.

“Well, it’s no secret that we have anticipated a competition, which will engage another company in this process,” Senate Defense Appropriations Subcommittee Chairman Richard J. Durbin, D-Ill., said at an April 2 hearing with Air Force leaders. “And I believe the president’s budget diminishes that competition in years to come, which seems to be moving in an opposite direction, really putting most of our fate in the ULA project to continue despite the question mark about Russian sources.”

James has explained that the reason behind the launch delays is that the GPS satellites that would have been replaced are simply lasting longer than anticipated. She has also stressed that seven of the eight light launches over the next five years will be competitive, assuming new entrants qualify.

Lawmakers, however, remain unconvinced about the new timetable. In an April 1 letter to Defense Secretary Chuck Hagel, six senators said the reduction in launch opportunities over the next five years undermines the commitment to competition.

“We understand from recent public statements from the Air Force that new entrants to the EELV program may be certified this year,” the senators wrote. “If there is more than one certified provider capable of executing any Air Force launch, we believe that those missions should be competed.”

Signatories on the letter include California Democrats Dianne Feinstein and Barbara Boxer, New Mexico Democrats Tom Udall and Martin Heinrich, Virginia Democrat Mark Warner, Mississippi Republican Roger Wicker and Missouri Democrat Claire McCaskill.

Feinstein sits on the Defense Appropriations Subcommittee; Wicker and McCaskill are members of the Senate Armed Services Committee.

The anticipated launch delays have only added fuel to the already hot battle for space programs. SpaceX has boasted that it could save the taxpayers billions on launches, while ULA has touted its flawless track record on 68 satellite launches.

“Getting the competition opened up is the primary focus right now because once the competition is open, then they can let the Air Force decide what is going to be the most reliable, what is going to be the best” from a cost and national security perspective, a SpaceX spokesman said last week.

But the Air Force has stressed it still plans to compete those launches — just later than they had originally planned.

“There is no secret plan, there’s no conspiracy inside DOD, to take the other seven [launches] and give them to ULA,” Bitterman said.

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