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Federal Judge Lifts Ban On Russian Rocket Engine Purchases, US Air Force-ULA ‘Block-Buy’ Contract Resumes

May 9, 2014
Image Caption: A United Launch Alliance Atlas V rocket lifts off for NROL-67 mission on April 10, 2014. Credit: United Launch Alliance

Lawrence LeBlond for redOrbit.com – Your Universe Online

A week after a federal court judge ordered a temporary injunction against the United Launch Alliance’s “block-buy” contract with NPO Energomash – a Russian-based rocket engine maker – the same judge lifted the ban, after US officials assured that the purchases didn’t violate sanctions against Russian officials.

Judge Susan Braden of the US Court of Federal Claims issued a temporary injunction on May 1 after a SpaceX complaint raised concerns that United Launch Alliance monopolized the market on the US Air Force’s national security launches.

Another part of the SpaceX complaint was over ULA’s contract with NPO Energomash, a firm that SpaceX CEO Elon Musk claimed was controlled by Russian Deputy Prime Minister Dmitry Rogozin, who is on a list of officials targeted by economic sanctions arising from the Russian-Ukraine conflict.

Because of the sensitivity of the matter, Braden ordered a ban on further purchases of Russian rocket engines until US officials could assure that the Air Force-ULA contract did not violate the sanctions. Following the ban, officials from the Treasury, State and Commerce Departments provided assurances to Braden this past week.

In an emailed statement to Bloomberg, Jessica Rye, a spokeswoman for ULA, said the information Braden received makes it clear that ULA’s relationship with NPO Energomash “complies with the sanctions against Russia.”

SpaceX continued its push to keep the ban in place. In a subsequent court filing, the Hawthorne, California-based company asserted that the Treasury’s assessment was unpersuasive because “rather than make a determination one way or the other, Treasury’s letter only states that ‘as of today’ they have not yet done so.”

In urging to keep the ban in place, SpaceX said in the court papers that Braden “raised obvious questions” about the possible sanctions violations.

Braden, however, felt the letters from the government departments were sufficient enough to assure that sanctions were not being violated and lifted the ban on May 8.

In the court ruling, Braden explained that, based on the information received, purchases of Russian-based rocket engines do not violate sanctions (Executive Order 13,661) held against Russian officials in any way.

“Based on the representations made in the May 6 and May 8, 2014 letters by the United States Department of the Treasury, the United States Department of Commerce, and the United States Department of State, the court hereby dissolves the April 30, 2014 Preliminary Injunction. If the Government receives any indication, however, that purchases from or payment of money to NPO Energomash by ULS, ULA, or the United States Air Force will directly or indirectly contravene Executive Order 13,661, the Government will inform the court immediately,” wrote Judge Braden in her official ruling.

“United Launch Alliance’s (ULA’s) purchase of the RD-180 engines from our suppliers and partners, RD AMROSS and NPO Energomash, clearly complies with the sanctions against Russia,” ULA said in an official statement Thursday.

“The letters submitted by U.S. Departments of State, Treasury and Commerce explicitly stated that NPO Energomash is not subject to any of the current sanctions and that ULA’s continued purchase of the RD-180 does not directly or indirectly contravene the Ukraine sanctions,” it added.

“Sadly, SpaceX’s frivolous lawsuit caused unnecessary distraction of the executive and judicial branch and increased tensions with Russia during a sensitive national security crisis,” the statement continued. “SpaceX’s actions are self-serving, irresponsible and have threatened the U.S.’s involvement with the International Space Station and other companies and projects working with Russian State entities.”

SpaceX’s main objective for filing the lawsuit was to seek the chance to compete against a ULA “monopoly,” asking the judge to order the Air Force to open up competition for national security launch projects.

Musk explained that his company could save the government and taxpayers as much as $1 billion a year in launches.

SpaceX had initially been given the chance to compete after the US Air Force told the private launch company it had to complete three certification test flights. It had successfully completed two test flights and just days before a third test was scheduled, the Air Force entered into the “block-buy” contract with ULA for all 36 rocket engine cores, according to SpaceX.

Despite losing out to ULA, prematurely by its own accounts, SpaceX maintains that it is qualified to compete for government launches today, noting 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.”

“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,” SpaceX said in a statement last week.

With Judge Braden’s move to lift the injunction, it is not looking to promising for SpaceX’s goals of opening up competition in the government satellite launch market.

“We continue to hope that SpaceX will revisit its underlying lawsuit and the merits of its case. The fact remains, even today SpaceX is not certified to launch even one mission under the block buy contract – a contract that was authorized and announced more than two years ago, without objection by SpaceX, and is saving the U.S. taxpayers over $4 billion,” ULA concluded in its statement.


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



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