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Federal Court Judge Orders Temporary Injunction Against ULA Rocket Deal With Russia

May 1, 2014
Image Caption: A United Launch Alliance Atlas V launch vehicle lifts off with the National Reconnaissance Office's NROL-67 payload. This was the 45th Atlas V launch since the inaugural flight in 2002. Credit: United Launch Alliance

Lawrence LeBlond for redOrbit.com – Your Universe Online

Less than a week after SpaceX’s Elon Musk filed a legal complaint for not being allowed to compete for contracts on payloads involving national security, a US federal courts judge ordered a preliminary injunction against United Launch Alliance’s (ULA) purchases of Russian-made rocket engine components.

Judge Susan Braden said the decision to block deals with Russia does not affect earlier purchases or payments but did note that she came to Wednesday’s decision after considering a number of factors, including security concerns.

Musk, who accused the US Air Force of illegally shutting SpaceX out of the market for military satellite launches, said he only filed the complaint after considering other options and noted that his company was not seeking to be awarded contracts, but only the ability to compete fairly for them.

He further stated in the April 28 complaint, which was filed in the US Court of Federal Claims in Washington, that the ULA contract with the Air Force essentially funnels hundreds of millions of taxpayer dollars to Russia’s military industry and potentially to those on a US sanctions list.

Musk said in the complaint that the engines ULA buys are made by a Russian entity controlled by Russian Deputy Prime Minister Dmitry Rogozin. Judge Braden’s injunction will prevent the US Air Force and ULA from buying or paying money to any entities linked to Rogozin, who is on a list of officials targeted by economic sanctions arising from the Russian-Ukraine conflict.

According to an NBC News report, Rogozin referred to the sanctions on Tuesday, warning that they would “boomerang” to hurt America’s space effort. He also suggested that NASA “bring their astronauts to the International Space Station using a trampoline.”

While NASA currently relies on Russia’s space industry to ferry astronauts to the space station, SpaceX, as well as Boeing and Sierra Nevada Corp., are working to build its own fleet of ships that will return manned missions to space from American soil. Currently, it costs in excess of $50 million per seat to send American astronauts to space in Russia’s Soyuz capsules.

NASA said the downturn in US-Russian relations has not affected operations on the space station, but Rogozin’s comments did not help the situation, reported NBC News.

SKYROCKETING COSTS

As for SpaceX and its complaint, Musk stated that the real big issue is that the US Air Force is not saving money that it maintained it would by awarding contracts solely to ULA. The Air Force’s EELV program was implemented in 1995 to reduce space launch costs by up to 50 percent. Initially, there were two competitors – Boeing and Lockheed Martin.

After years of fighting for contracts, the two companies put aside their differences and merged to create ULA in 2006. The Boeing-Lockheed merger monopolized the market for military-based satellite launches and was meant to save taxpayers $100-$150 million per year, according to an official SpaceX statement.

But since 2006, not only have there been no savings, but costs have skyrocketed. Vehicle costs have climbed from roughly $100M per vehicle to $400M per vehicle, making ULA’s launch vehicles the most expensive not just in the US, but in the world, said SpaceX, noting that the EELV program is now the fourth largest line item in the country’s entire defense budget, with costs projected at nearly $70 billion through 2030.

Musk’s formal complaint was not entered into lightly, and was made only after all other avenues were exhausted.

“In a November 2012 Acquisition Decision Memorandum, as part of an effort to fundamentally restructure the EELV program, Under Secretary Kendall directed the Air Force to ‘aggressively’ bring competition into the EELV Program and expressly stated his intent was to ‘obtain the benefits of competition as quickly as possible,’” wrote SpaceX.

In January 2013, in a follow-on letter to the Government Accountability Office, Kendall also expressly made clear that new entrants would be in a position to compete once three certification launches and post-flight data from these launches were submitted: “The Department [of Defense] will allow new entrants to compete for launch contract awards as soon as the new entrant delivers the data from their final certification launch.” By design, certification is meant to run in parallel to the competition—with certification required just prior to the actual contract award.

CERTIFICATION SUCCESS

SpaceX successfully completed the first of the three required certification flights for the Air Force on September 29, 2013. It completed the second certification flight on December 3, 2013. Later that month, with the company’s third certification flight just days away, the Air Force entered into a block-buy contract for the purchase of all 36 rocket cores from ULA.

The Air Force-ULA contract was negotiated and executed outside of public view and has never been made public, said SpaceX. It has requested a contract using the Freedom of Information Act but has of yet received a response.

However, SpaceX did learn just a day after a March 5th Senate hearing on EELV competition that 14 missions the Air Force said it would allow new entrants to compete for had been cut to at most seven, and potentially as few as one, stating that the reduction was required for the Air Force to “comply with previously unknown requirements contained in the block buy contract.”

SpaceX maintains that it is qualified to compete today, and said that its “Falcon 9 has demonstrated far more actual flight heritage than was required of either the Atlas or Delta vehicles, which received multiple orders before they ever launched. Meanwhile, ULA has been guaranteed 36 cores.”

And because ULA was guaranteed those 36 cores, it meant that hundreds of millions of taxpayer dollars would go to Russia – money that could be better spent on domestic alternatives that are qualified to compete and do not rely on components from countries that pose a national security risk.

Musk said that SpaceX can save the government as much as 75 percent on launch costs currently given to ULA. “It’s a false premise to suggest that a more expensive launch is a more reliable launch. Prices have increased because there is no competition.”

“SpaceX is better able to control costs because our factory was built in the 21st century and takes advantage of both new design innovations and new manufacturing techniques. As a private company with no government subsidies, our business only succeeds when we deliver our customers’ payloads safely and reliably to orbit. SpaceX currently provides launch services for NASA as well as numerous commercial customers—we stand ready and able to reliably provide launch services at an estimated cost savings of 75 percent,” wrote SpaceX.

“To be clear, SpaceX is not seeking to be awarded any launch contracts. We are simply seeking the opportunity to compete—and not just for SpaceX, but for any qualified company. If we compete and we lose, that’s ok too. But to not be given the opportunity to compete at all, especially in light of the Air Force’s stated interest in competition and current dependence on Russia for national security launches, just doesn’t make any sense,” the statement concluded.

With Judge Braden’s order now in place, SpaceX is likely looking forward to a chance to prove its worth. However, it is still too early to tell if the temporary injunction is enough to open up competition.

The case is Space Exploration Technologies Corp. v. U.S., 14-cv-00354, US Court of Federal Claims (Washington).


Source: Lawrence LeBlond for redOrbit.com - Your Universe Online



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