ULA's Air Force launch contract under scrutiny

United Launch Alliance, the Boeing-Lockheed Martin joint venture, is drawing the ire of a key member of Congress and the reservations of senior Pentagon officials over its decision not to compete for future military satellite launch contracts.

The blowback stems in part from an $800 million yearly option awarded to ULA by the Air Force as part of a larger launch agreement that runs through 2019 in support of the Evolved Expendable Launch Vehicle program. The sole-source contract effectively handed ULA a monopoly on military space launches until rival Space Exploration Technologies Corp. (SpaceX) protested the deal. The Air Force has since certified SpaceX for launches and opened future military satellite launches to competition, but ULA announced in November it would not compete for future Air Force GPS 3 satellite launches.

Testifying before the Senate Armed Services Committee this week, Air Force Secretary Deborah Lee James said the service is considering whether to terminate the launch capability contract option before it is scheduled to expire in 2019. While providing no timeline for early termination, James also said DOD "would strongly prefer to not have to pay for the development of an RD-180 engine replacement that would benefit only one launch service provider."

ULA has cited a ban on further use of Russian-made RD-180 engines, used in the Atlas V rocket, as one reason for opting out of the GPS launch competition. Committee Chairman John McCain (R-Ariz.) instituted the ban on using RD-180 engines last year, a move that prompted several parallel efforts to replace the engine with a U.S.-made alternative. Congress lifted the ban in December as part of an omnibus spending bill after Sen. Richard Shelby, R-Ala., pushed through a budget amendment lifting the ban. ULA builds rockets in Alabama.

During this week's hearing, McCain cited Russian and Chinese counterspace initiatives as among the reasons for ending U.S. reliance on Russian RD-180 engines. He also accused Pentagon officials and ULA of "stalling tactics" designed to prolong use of the RD-180 for U.S. military launches.

"Russia holds many of most precious national security assets at risk before they ever get off the ground, yet the Department of Defense has actively sought to undermine—with the support of the United Launch Alliance and the parochial motivations of Senator Shelby and Senator [Dick] Durbin—the direction of this committee to limit that risk and end the use of the Russian-made RD-180 by the end of the decade."

Boeing is based in Chicago. Durbin, a Democrat, is the senior senator from Illinois.

McCain noted that ULA inventory currently includes two rockets, the Atlas and Delta, available to launch U.S. satellites. The Delta doesn’t use the RD-180. "If the Air Force were to pursue split buys for a short period of time, until a new [U.S.-made] engine is developed, we could eliminate our dependence on the RD-180 today without compromising future competition," he asserted.

McCain followed up the contentious hearing by introducing legislation to reinstitute the ban on using RD-180 engines. House Majority Leader Kevin McCarthy of California is cosponsoring the legislation. McCarthy's district includes many commercial space entrepreneurs.

ULA continues to work with startup Blue Origin on a replacement engine. The methane-powered BE-4 engine would be used in the first stage of the Atlas V successor, the Vulcan. ULA insists it needs to continue using the RD-180 while a replacement is developed. The Air Force has said a replacement engine won't be ready by 2019.