HASC Sides With Air Force, ULA on RD-180 Rocket Engines

In the wee hours overnight, the House Armed Services Committee (HASC) approved an amendment regarding the United Launch Alliance’s (ULA’s) use of Russian RD-180 engines for its Atlas V rocket.  The Atlas V launches many national security satellites.  Its Russian engines have been a source of contention since Russia annexed Crimea two years ago. The amendment favors ULA and the Air Force versus ULA’s competitor, SpaceX.  The committee also adopted an amendment allowing government funds to be spent on a new launch vehicle, not just a new engine.

HASC marked up the FY2017 National Defense Authorization Act (NDAA) beginning at 10:00 am ET on April 27 and ending more than 16 hours later at 2:34 am ET today (April 28).  The very last topic considered just prior to a series of postponed roll call votes was the RD-180 controversy.  HASC Chairman Mac Thornberry (R-TX) said it was because negotiations had been underway throughout that time to determine if a compromise could be reached.  Apparently it could not.

The fundamental debate has not changed over the past two years.  There is broad agreement in Congress, the Administration, and industry that the United States should not be dependent on Russian RD-180 rocket engines to launch U.S. national security satellites and that a U.S. alternative to the RD-180 should be built.  The debate is over the timing of the transition from RD-180 powered Atlas  V rockets to a rocket using a U.S.-built engine.

ULA has been a monopoly provider of national security launches using its Atlas V and Delta IV rockets since its creation in 2006.  ULA is a 50-50 joint venture between Boeing (Delta IV) and Lockheed Martin (Atlas V).  In 2015, SpaceX was certified to launch national security satellites in competition with ULA.  Yesterday it was formally awarded its first contract for launch of an Air Force GPS satellite.   SpaceX’s $82.7 million price reportedly was 40 percent less than what ULA has been charging for GPS launches.

ULA did not bid against SpaceX for that launch, publicly arguing that, among other things, it was precluded from doing so because of the restrictions on how many RD-180 engines it could obtain. (Statements made later by a ULA official called that account into question, however, spurring a DOD Inspector General investigation into whether there were contracting improprieties. The investigation is ongoing.)

ULA officials have also indicated that it is difficult for them to compete against SpaceX on price.  The company is working to reduce costs by building a new rocket, Vulcan, which will use an American-built engine from either Blue Origin or Aerojet Rocketdyne.  The question is when Vulcan will be available.  Congress set 2019 as the date by which a new engine must be ready, and there is agreement that is achievable, but the Air Force and ULA argue that it will take 2-3 more years before a launch vehicle using the new engine is certified to launch expensive national security satellites.  They want to buy up to 18 more RD-180 engines to ensure the Atlas V is available until Vulcan is certified.  Previous NDAAs limited that number to nine, however.

U.S. space transportation policy requires that two separate
launch vehicle families be available to launch national security
satellites in case there is an accident that grounds one of them. 
SpaceX advocates argue that its Falcon 9 is one and ULA’s Delta IV is
the other, and both will be available in 2019 and beyond, so Atlas V is not needed to fulfill the policy.  Others worry that if SpaceX’s rocket fails, all national security satellites would have to be launched on the very expensive Delta IV.  Air Force Secretary James estimates the potential pricetag as $1.5 – $5 billion.

Sen. John McCain (R-AZ), chairman of the Senate Armed Services Committee (SASC), is the most prominent voice in holding the line at only nine more engines.  That position has the support of some HASC members, including Rep. Duncan Hunter (R-CA), who district is near SpaceX’s headquarters in Hawthorne, CA.

Air Force and ULA supporters, including HASC’s Rep. Mike Coffman (R-CO), insist that 18 more are required. His district is close to ULA’s headquarters in Centennial, CO. Coffman’s amendment to raise the number from nine to 18 was adopted by HASC by voice vote.

Hunter intended to offer an amendment to keep the number at nine, but said that it had been ruled out of order.  He insisted that there was no need to commit to 18 now and “line Putin’s pockets,” referring to Russian President Vladimir Putin.  “We can get away with with nine or 10 now,” he argued, and return to the issue in future years rather than giving Russia “$540 million in direct payments to Russian military modernization.” Coffman insisted that the figure of 18 came from the Air Force so that is the requirement.

A long debate ensued about whether the amendment was for 18 or “up to” 18
engines.  A verbal understanding seemed to be reached that “up to 18”
was intended, although the amendment says “a total of eighteen.” Thornberry pointed out that this is an authorization bill and how many are purchased ultimately is determined by appropriations.  (In fact, the RD-180 issue splits Senate authorizers and appropriators.)

The origin of the 18 number is complicated.  Until last summer, the Air Force and ULA said 14 more RD-180s were needed based on a “block buy” contract that was awarded by the Air Force to ULA in 2013.  The block buy was for 36 launches, 29 of which were Atlas Vs powered by Russia’s RD-180s.  At the time of Russia’s incursion into Ukraine in 2014, 15 were purchased, leaving 14, of which 5 were under contract.  That left nine.  Congress agreed ULA could continue to procure those.  Last summer, however, William LaPlante, Assistant Secretary of the Air Force (Acquisition), wrote a letter to Sen. Richard Shelby (R-AL) asserting that  “up to 18” were needed.  Air Force officials, including Air Force Secretary Deborah Lee James, now use 18, or  “about 18,” as the requirement. LaPlante’s letter did not explain how the number was derived, saying only it is “a reasonable starting point to mitigate risk associated with assured access to space and to enable competition.”  (ULA manufactures its rockets in Shelby’s home state of Alabama.  Shelby, a top member of the Senate Appropriations Committee, and McCain are battling each other over this issue.)

Another layer of the debate is whether research and development (R&D) funding provided by the government to build a U.S.alternative to the RD-180 can be spent only on a new engine or also on a new launch vehicle to go with it.  HASC has insisted that the money be spent only for a new engine — that a new launch vehicle is not required.  Others insist that an engine is only part of a launch vehicle and the rest must also be built. 

Rep. Adam Smith (D-WA), the top Democrat on the committee (whose district is near Blue Origin’s rocket engine manufacturing facility in Kent, WA), offered an amendment that allows not more than 25 percent of the R&D funding to be spent on a new launch vehicle, upper stage, strap-on motor, or related infrastructure.  The amendment allocates $100 million and specifies where the money comes from, which does not appear to be all from R&D accounts.  In response to questions from committee members, Smith explained there is $294 million in the bill for development of the engine and there was money in prior years for the same purpose, but it was only allowed to be used only for the engine.  Not all of the prior year money was spent.  “This amendment does not add any money to anything.  It takes out of that $294 million some money to also help those same companies that are developing the engine develop a launch vehicle to go with it.”  The amendment was adopted by voice vote.

The debate was fractious, especially considering the hour (approximately 2:00 am ET) and the length of time the committee had been debating the bill (since 10:00 am ET the previous day).