DOD May Not Be So Committed to Launch Competition After All

Delta Heavy w/Orion Credit : NASA

Delta Heavy w/Orion
Credit : NASA

Editorial

On Monday, an Innerspace editorial suggested that perhaps it is time to reconsider restrictions on launching U.S. government payloads on friendly foreign launchers, namely the Ariane V. Part of the logic came from the assessment that ULA is simply not going to be able to make the Atlas V price competitive with the SpaceX Falcon 9 to the extent that it could win a head up competition on price alone.

Based on a story in Space News today, it seems the Air Force may have reached the same conclusion. According to the report, the Air Force is considering continuing the practice of awarding sole source launches, all of which would almost certainly go to ULA.

From SpaceNews:

“While the Defense Department remains “committed to competition as a way to control cost,” it is prepared to suspend that philosophy in certain instances rather than see ULA driven from the market.

“The Department cannot be in the risky position of relying on only one source of space launch for critical national security satellites that must be launched reliably and on schedule,” the statement read. “With only one source of launch services a failure could lead to a long gap in access to space.”

Haven’t we been here before?

While the concern about loss of access to space is certainly warranted, that was precisely the point of suggesting that the Ariane V is a potential answer to the problem, one which would serve to keep SpaceX pricing in check, even as it provides a backstop against another major failure.

There is a legitimate question however, as to just how high the priority to provide a domestic backup in case of a failure really should be, particularly considering the fact that there is already precedent against it at the highest levels.

Although cost data is imprecise at best, it is likely a safe assumption that those payloads which fly on the triple core Delta Heavy are among the most expensive and the most critical that the national security establishment launches. Yet there is no backup launcher available in this class at all.  Until SpaceX qualifies the Falcon Heavy to Air Force certification standards, every Delta Heavy award will continue to be sole source.

Given the necessary dependence on the Delta Heavy for a limited number of launches, but for what could be an extended period of time, it is a situation that would tend to suggest that if DOD is going to throw competition out the window anyway, as it is clearly thinking about doing, then perhaps it is worth the extra expense of buying the single core Delta Medium on a limited basis, rather than less expensive but strategically vulnerable Atlas and its Russian engines.

The net difference might not be as great as ULA would like us to believe, and here’s why.

An honest calculation of the costs and benefits would necessarily start with the net savings to be gained from declining to issue ULA relief from the ban on Russian engines, as the company and some congressional supporters clearly want, and instead sticking with the principle that depending on a potential adversary for access to space is a bad idea at nearly any cost.

The practical result would be that future awards which might have gone to ULA and the Atlas V under expensive sole source contracts, would instead go to SpaceX under fair competition. Every Atlas launch, which would apparently have been subsidized in any event, would instead result in a measurable and likely significant savings which could be used for “buying down” the cost of a lessor number of Delta launches.

There is another related possibility as well, one which also has the benefit of precedent. In 2002, NASA arranged to purchase up 19 Delta II rockets as a means of controlling its costs as the new and somewhat overpowered EELV boosters came into service. It came to be called the “19-Pack,” and of the total, one still remains, likely headed to a museum.

Given that the justification for continuing non-competitive sole-source awards is the risk of a delay in access to space, DOD could still meet its policy objectives by purchasing a limited number of Delta Medium boosters ( 5?) at one time, to keep in reserve in case another major failure threatens to sideline the Falcon 9 for an extended period of time. Pursuing such a course would necessarily add storage and possible refurbishment costs, but again, these could be traded against the overall savings from purchasing openly bid Falcon 9’s. Furthermore, as the Vulcan booster approached qualification, the risk of an unacceptable delay in access to space would quickly diminish. Once inside a window, the Air Force could assign launches to the remaining reserve of Deltas so that each was ultimately utilized.

In the long run, which is hopefully not too long at all, the preferred national security policy goal is have two independent, fully domestic boosters engaged in healthy competition.  Neither the ULA Delta IV or Atlas V meets those criteria, whereas the Vulcan meets both. There is a case to be made that allowing ULA to keep importing RD-180’s as it so clearly wants to do, and as continued sole sourcing from DOD would likely facilitate, would have the unintended consequence of reducing the urgency to develop and qualify Vulcan in the first place.

Finally there is this. ULA’s Tory Bruno is couching the issue of access to engines for the Atlas V in fairly apocalyptic terms, suggesting that without them he does not have a viable business model. It is important to keep in mind the reality that the current ban applies to DOD missions only. Assuming Congress ultimately comes through with the money, ULA has already gained a limited number of additional Atlas V missions from NASA as part of the Commercial Crew program. Quite a few more could be forthcoming in the soon to be announced CRS-2 contract awards, where both Boeing and Sierra Nevada configured their bids based on the Atlas V as well.

Perhaps the sky isn’t really falling after all.

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1 Comment on "DOD May Not Be So Committed to Launch Competition After All"

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  1. PK Sink says:

    So simple, so sensible…it will probably never fly in Washington DC. ULA has always reminded me of the Mafia. “You don’t buy our insurance, something bad could happen.”

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