Air Force’s launch contracting plans under scrutiny


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It appears the Air Force wants to decide now which two rocket companies it will use for its launch needs in the 2022 to 2026 time period, and this desire is raising hackles among those companies.

[T]he Air Force will choose only two companies to meet its launch needs from 2022 to 2026, with one provider winning 60 percent of the contracts and the other taking 40 percent. There is no provision to on-ramp other companies during the time frame.

This sets up a rather frantic competition between the incumbents, ULA and SpaceX, and newcomers Blue Origin (with its New Glenn booster) and Northrop Grumman (with its Omega rocket). Moreover, the timing appears to prejudice the competition in favor of the incumbents, which already have existing launch systems the government can assess.

Something is really fishy here. Why does the Air Force need to limit its services to only two companies? And why do they have to make this decision now, three to seven years before the launches will occur? Common sense says you instead issue specific contract bids, for each launch, as they are needed, thus allowing as many companies as possible to compete for the business.

In fact, this policy seems to directly contradict the Air Force’s stated goal, repeated many times in the past few years, to widen competition in the launch industry, both to lower cost and to give the military strategic redundancy in its needed launch services.

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5 comments

  • Edward

    Robert asked: “Why does the Air Force need to limit its services to only two companies? And why do they have to make this decision now, three to seven years before the launches will occur?

    Although I have no insight, some of the reasoning two decades ago, when the EELV program was starting, was that ordering multiple rockets at a time would reduce the cost of each rocket. I would not be surprised if the Air Force still has this mindset, as it may be true. At least for the case of only two available rocket companies, flying expendable rockets, and with only minor competition between them.

    For the case we have now, eliminating two additional companies only reduces the competition. This means that the Air Force would have to learn in advance how much three new rockets would cost once they are operational, as the fourth rocket is already a known quantity.

    Why eliminate two rockets as possibilities? I can only guess that this allows for favoritism to sneak into a process that is supposed to eliminate favoritism.

    I almost like the alternative mentioned in the article: “ There is also discussion of a 12-month delay, which would compete 2022 launches among ULA and SpaceX but then open the period from 2023 to 2026 to other competitors. This would allow Blue Origin and Northrop Grumman more time to develop their rockets and prove some of their capabilities to the Air Force.” However, I would prefer the competition to be more of an annual event or even launch-specific, rather than half a decade at a time.

    A reason for making decisions two or three years in advance is to allow for the launch provider to manufacture the needed expendable rockets. One of the nice things about Blue Origin and SpaceX is that they may not need this much lead time, as their reusable rockets should be ready to refly within months or weeks, but some amount of lead time will be necessary in order to schedule the Air Force’s launches among the other launches.

    Low cost and quick availability are just two of the advantages of the reusable rocket. These two factors should go a long way toward giving Blue Origin and SpaceX an edge over the other launch providers.

    Well, maybe sometime after 2022.

  • mkent

    “Why does the Air Force need to limit its services to only two companies?”

    There just isn’t enough business for more than that. In fact, two is probably too many, but the Air Force wants competition and assured access. We’re only talking about 25 launches over a five-year period.

    “And why do they have to make this decision now, three to seven years before the launches will occur?”

    Because launch vehicles have expensive, complex components with a lead-time of up to three years. They need to place the order now so that it is there ready to launch in three years.

    “Common sense says you instead issue specific contract bids, for each launch, as they are needed, thus allowing as many companies as possible to compete for the business.”

    This isn’t sensible at all, as the end result of that will be complex military payloads sitting uselessly on the ground instead of being launched into orbit. Neither ULA nor Northrop Grumman can stay in the market without a minimum number of orders, and in their 19-year history, Blue Origin has never launched a single gram of anything into orbit. SpaceX has done better, but even they, after 17 years, still can’t perform all of the launch missions the Air Force needs done.

    The Air Force is doing what it can to lower launch costs, but that’s at best a tertiary objective. The mission comes first. This is looking like it’s going to be an example of their secondary concern: force preservation. They’re working to ensure they have assured access throughout the coming decade instead of chasing a momentary reduction in launch cost.

  • pzatchok

    I bet ULA needs a cash infusion and getting a guaranteed series of launches without competition for the next few years would give them an easy way to repay a loan.

    Space X doesn’t need any of this, they are already the low cost leader.

  • Dick Eagleson

    These rumblings are probably the last hurrah of the old-line genially corrupt USAF procurement establishment trying to get some final licks in before Space Force and SDA are stood up and take space-related development and procurement away from it. If Space Force, as is widely expected, adopts a strategy of proliferation of cheaper space assets as the best near-term approach to easing U.S. vulnerabilities, there will not be fewer DoD launches needed but many more than currently planned anent solely legacy programs. That being so, any effort to prematurely reduce the field of potential competitors by fiat is flatly contradictory to both good sense and the best interests of the U.S. Trump and Shanahan need to find a new USAF Secretary not fatally entangled with USAF’s “business as usual” crowd.

  • Edward

    The following is an essay showing that returning to a competitive process for national security launches has been controversial for half a decade, ever since a second U.S. company became available for such a competition. A review came out of the controversy:
    https://spacenews.com/on-national-security-the-spacex-ula-proxy-war-is-heating-up/

    When [Deborah Lee James, former Air Force secretary] came into office in 2013, lawmakers were pushing the Air Force to end ULA’s monopoly by making the Boeing-Lockheed joint venture compete against new entrants, namely SpaceX. Congressional pressure intensified in 2014 when Russia invaded Crimea and lawmakers demanded the Air Force end reliance on the Russian RD-180 engines that power ULA’s Atlas 5 rocket.

    The [2015] review exposed a cultural gulf between how the government and commercial space industry do business, James said. “SpaceX was ‘New Space.’ We were used to doing things a certain way.” The Welch report recommended changes to “reduce the time frame but not the quality of the certification process,” James said.

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