Bruno: National Security Launch Market Only Big Enough For Two

United Launch Alliance (ULA) President Tory Bruno insisted today that the foreseeable national security launch market is only big enough to support two launch service providers, not three as some are advocating. Expanding the pool to three would be a “giant mistake” imperiling the financial viability of all of them. ULA is bidding on the Air Force Phase 2 contract as it gets ready to introduce its new Vulcan rocket in 2021, while flying out Atlas V and Delta IV by 2024.

Bruno told reporters today that the company will be flying both Atlas V and Vulcan off of the same pad at Cape Canaveral Air Force Station during the three year transition.  That necessitates a number of changes to Launch Complex 41 to accommodate the two quite different rockets, including building tanks to store the liquified natural gas (methane) for Vulcan’s BE-4 engines.

The Blue Origin-built BE-4s are coming along. Although they are taking longer than planned, Bruno anticipated that possibility when laying out the Vulcan schedule. “My vehicle will not be late.”  He praised Blue Origin’s achievements, noting that “many have tried and failed to develop big methane engines,” but Blue Origin has solved the combustion instability problems that thwarted others.

ULA has sold seven Vulcan launches already: one to Astrobotic for its Peregrine lunar rover for NASA’s Commercial Lunar Payload Services (CLPS) program, and six to Sierra Nevada Corporation for its Dream Chaser to take cargo to the International Space Station.  Astrobotic and the first of the Dream Chaser launches count as qualification tests for Air Force launches and will fly very different trajectories.  Astrobotic’s mission will demonstrate accuracy, while Dream Chaser will demonstrate the energy needed to make plane changes.

ULA submitted its Phase 2 Launch Service Procurement (LSP) proposal to the Air Force for the next round of launch service contract awards and is waiting to hear back.  Both Vulcan and Atlas V are in the proposal.

When the Air Force released the Request for Proposals for the LSP in May, then-Secretary of the Air Force Heather Wilson noted that it responds to congressional direction to stop using Russian RD-180 engines, which power the Atlas V.  ULA’s answer to that is Vulcan, but it can continue to fly Atlas Vs for some time yet.  One RD-180 is needed for each Atlas V launch. The 2016 law states that ULA could obtain no more than 18 additional RD-180s and the Air Force cannot order Atlas V launches after December 31, 2022.  The Air Force has not ordered 18 yet, however, though Bruno declined to say how many remain.  He said only that he can launch 18 for national security missions and has 12 to go.  “I still have RD-180s being delivered.  I’m close to three years ahead of need right now.”

The restrictions do not apply to civil or commercial launches, but Bruno is looking forward to transitioning to Vulcan, which will be less expensive with a much shorter turn around time.  He added, though, that Vulcan is designed to meet the most challenging national security requirements and consequently will be less competitive for commercial launches.

“I feel I have an adequate supply of [RD-180] engines as long as this [LSP] acquisition remains on track,” he said. But that is a significant question.

The Phase 2 LSP procurements will take place in 2020-2024 for launches that will occur through 2027. The Air Force already decided that it will award contracts to only two companies, with one company getting 60 percent and the other getting 40 percent of up to 34 launches over the five years.  However, four companies are bidding: ULA, Blue Origin, SpaceX, and Northrop Grumman. So two will lose out.

In August, Blue Origin filed a pre-award protest arguing that the Air Force rules are ambiguous and do not permit a fair and open competition.  It insists the market will support three companies, not just two.

Bruno emphatically disagrees.  Asked if he thinks it is a possibility that the Air Force will be required to make awards to three providers, he replied that in a democracy anything is possible “but it would be a giant mistake.”

He sees a flat or declining commercial market in this time frame, while history shows that any launch service provider needs 8-11 launches per year to remain financially viable.  Looking at the market and foreign competitors, he sees room for only two U.S. launch service providers for this class of missions.  “If you add a third, you mess up that math and put the two that you need, all three really, at risk.”

One concern is that the entire procurement could be delayed as the debate unfolds. Bruno argues that any “major disruption” to the acquisition timeline “would be a big problem.”