Senate Appropriators Reveal EELV Contract Savings, Reduce Budget Commensurately

The full Senate Appropriations Committee reported out the FY2013 defense appropriations bill on Thursday.  The committee’s report reveals that the Department of Defense (DOD) negotiated significant savings in its launch vehicle program in FY2012.  The committee cut FY2013 funding for that program commensurately.

The defense subcommittee marked up the bill on Tuesday and a committee press release that day highlighted the restoration of funds for the Operationally Responsive Space (ORS) program and the Space Test Program (STP).   The press release said the committee added $100 million for ORS, but its report (S. Rept. 112-196), released two days later, shows that the committee augmented that amount by $10 million that was transferred in bits and pieces from five other space programs.   The total for ORS therefore is $110 million.  No funding was requested.

The committee offered no explanation, stating only that it “reverses the Air Force’s request” to terminate ORS as well as STP.  The committee added $35 million for STP, for a new total of $45 million. The committee’s action is in line with recommendations from DOD’s House and Senate authorizing committees, but the House Appropriations Committee did not recommend any increase for either program.

Separately, the committee’s report reveals that DOD and the United Launch Alliance (ULA), which builds and launches the Atlas V and Delta IV Evolved Expendable Launch Vehicles (EELVs), identified $219 million in “efficiencies” for the current fiscal year, FY2012, and the Air Force reinvested those funds by purchasing an additional Delta IV launch that was not included in the FY2012 budget request.   The committee commended them, but added that “because the FY2013 budget could not anticipate the savings coming out of these negotiations, the funds requested in the fiscal year 2013 budget are in excess of what will be required.”  Thus, the committee reduced the FY2013 EELV request of $1.68 billion by $220 million, but said the amount still supports the request for four EELV launch services in FY2013.

The committee also split the EELV procurement account into two separate lines:  EELV Launch Services for the launches themselves and EELV Launch Infrastructure for the engineering workforce and infrastructure needed to support the launches.  The committee said it would “increase the budget visiblity of each program.”  The committee approved $805 million for EELV Launch Services and $654 million for EELV Launch Infrastructure.

The Air Force’s acquisition of EELVs has come under scrutiny in the past two years.  Its plans for a block buy of 40 EELV core vehicles over 5 years was criticized because it could freeze out “new entrants” like SpaceX, and because its assertions that a block buy was needed to provide stability to the industrial base was not premised on independent analysis.   The Government Accountability Office (GAO) recently gave the Air Force mixed grades for how well it is complying with seven GAO recommendations on EELV acqusition.

The committee’s report expresses continuing concern about DOD’s acquisition of space launch services, strongly encouraging the department to ensure that new entrants can compete for DOD launches once they complete DOD’s certification process. 

The committee also wants DOD to report on its potential use of the Space Launch System under development by NASA.