Senate Armed Services Committee (SASC) Chairman John McCain (R-Ariz.) threatened exploring an “unrestricted prohibition” on Russian rocket engine use following United Launch Alliance’s (ULA) decision not to participate in the Air Force’s first launch competition in roughly a decade.
In a lengthy Tuesday letter to Defense Secretary Ashton Carter, McCain assailed ULA’s reasoning for not bidding for the 2018 Global Positioning System III (GPS III) launch. He said ULA’s assertion that the launch competition was basically a “lowest price, technically acceptable” (LPTA) competition, unsuitable for launch contracts, was erroneous.
McCain also said ULA’s claim that it lacks accounting systems needed to certify that funds from other government contracts, such as the Evolved Expendable Launch Vehicle (EELV) Launch Capability (ELC) subsidy, will not benefit the launch competition is “particularly troublesome.”
McCain asked Carter to provide him with an assessment of ULA’s assertion that it does not have the business systems needed to provide a compliant proposal, as well as an opinion of whether the Defense Department can conduct the needed “apples-to-apples” comparison in connection with the GPS III launch without the cost accounting system that ULA said it needs to provide a compliant proposal.
McCain also asked Carter to audit ULA’s business systems, sufficient to ensure that it will be able to meet its contractual accounting requirements, and provide the results of that audit to his committee before the obligation or expenditure of any additional ELC funds. ELC is a somewhat controversial cost-plus-incentive-fee contract the Air Force has with ULA.
Worth roughly $1 billion annually, ELC was created in the mid-2000s when the launch industrial base was fragile and the federal government allowed Lockheed Martin’s [LMT] and Boeing’s [BA] launch companies to merge as ULA to provide two launch vehicles, or “assured access” to space. Air Force spokeswoman Alicia Garges said Dec. 1 that the Air Force is still paying the ELC to ULA.
McCain is upset with another ULA reason for not bidding for the GPS III launch: It didn’t have enough RD-180s to bid. The fiscal year 2015 National Defense Authorization Act (NDAA) not only bans DoD use of the RD-180 beyond 2019 but also severely restricts use of the engine before that deadline. McCain, in his letter, asked Carter to explain, with reference to source contractual documents, when ULA first began assigning rockets to specific launches and when it first started to reassign launches to prevent the use of RD-180s that were originally available for competitive launches.
McCain furthermore asked Carter to determine jointly with NASA Administrator Charles Bolden, and notify his committee of that determination, whether ULA’s reassigning those engines was “early-to-need” and if ULA could have procured other engines in time to meet actual launch dates. Just eight days after declining to bid for the GPS III launch, leaving Space Exploration Technologies Corp. (SpaceX) as the only plausible bidder, ULA, on Nov. 24, accepted delivery of four RD-180s.
“ULA’s use of these tactics is unacceptable,” McCain wrote. “It artificially created a need for relief from legislative restrictions on its ability to continue using RD-180.”
A congressional source told Defense Daily Wednesday the unrestricted prohibition phrase means prohibiting 100 percent of Russian-made engines.
SpaceNews reported in November that Senate Appropriations Committee (SAC) member Richard Shelby (R-Ala.) was considering adding language to the FY ’16 omnibus appropriations bill that would allow DoD, and ULA, access to additional RD-180s. The Air Force is also working with lawmakers to get additional relief for RD-180 use.
“Put simply, there was no compelling reason to re-purpose DoD engines other than to attempt to compel Congress to award the Russian military-industrial base by easing sanctions targeted at [Russian President] Vladimir Putin and his cronies,” McCain writes.
Charles Miller, president of NexGen Space LLC and former NASA senior adviser for commercial space, said Wednesday he believes it was a good business decision for ULA to use those existing RD-180s for a commercial purpose with an existing customer that was willing to immediately sign a contract. Miller also believed it was in ULA’s economic interest to save its five “pre-Ukraine” RD-180s for military purposes if it was possible to use new RD-180s that might be available. Logic, Miller said, suggested that ULA would have done so, if it made economic sense.
Miller said if McCain wanted ULA to use those five unallocated RD-180s for DoD purposes, and did not want to allow ULA to use them for non-military launches, that is a form of “takings” by the federal government from a private United States company. Miller doesn’t believe this is good policy.
Miller believes McCain, instead of complaining about ULA’s commercial use of RD-180s, should credit ULA CEO Tory Bruno.
“The DoD benefits by sharing overhead costs with every launch ULA sells to commercial industry,” Miller said. “ULA’s ability to rapidly adapt to the SpaceX competition is an American success story and (is) in the long-term interests of the DoD.”
ULA spokeswoman Jessica Rye and SpaceX spokesman John Taylor on Wednesday declined comment for this story. The Office of the Secretary of Defense (OSD) was unable to respond to a request for comment by press time.