Gov’t Pays $860 Million To Defense Contractor To Exist
The U.S. Air Force is paying $860 million to United Launch Alliance (ULA), a joint venture between Lockheed Martin and Boeing, so it can keep existing.
The Air Force awarded the money to ULA to maintain the capability to launch rockets. The contract structure was developed by the Department of Defense a decade ago to “ensure the government would have the ability to orbit its new constellations when they completed development,” Jessica Rye, a spokeswoman for ULA, told The Daily Caller News Foundation.
The money requires that the company make itself available to conduct launches. In exchange for the cash, ULA will be required to maintain the capacity to launch a rocket into space and maintain the various bases and infrastructure necessary to do so. The money is expected to be spent by late September of 2017.
ULA is now facing stiff competition, and had almost cornered the market for national security-related rocket launches until last year, when SpaceX won U.S. Air Force certification for national security space missions.
“The U.S. Air Force uses two contracts to launch satellites,” Rye told TheDCNF. “One to build the rocket and one to launch the rocket. The EELV Launch Capability (ELC) contract launches the rocket. ELC is not a sustainment fee. It is a contract structure developed by the Air Force to allow for the flexibility needed at that time in the program history… Without ELC, most of our nation’s national security satellites would have no access to space.”
The company collects an additional $5 billion in other spending from the Air Force for rocket hardware, according to the Government Accountability Office. Additionally, ULA gets $366 million dollars for some rocket launches. The company has also tried to convince the government to spend another $1 billion to develop a new rocket, which would have lowered its launch costs.
ULA uses Russian-made RD-180 rocket engines as part of its workhouse rocket for the American military space. However, the U.S. Air Force and Congress are now considering shifting satellites slated to be launched on RD-180 powered rockets onto more expensive, but American-made, rocket engines.
The RD-180 is an old Soviet design. ULA’s Atlas V rockets are made in Alabama, and use the Russian RD-180 engine. The design has a record of safety and reliability, some in Congress worry that America’s dependence on Russian rocketry may give Russian President Vladimir Putin dangerous leverage over the American military.
But the shift would be expensive. Air Force Secretary Deborah Lee James told the Senate Armed Services Committee in early March that getting rid of the RD-180 early could end up costing taxpayers as much as $5 billion.
The 2016 National Defense Authorization Act expressly authorized the use of nine RD-180 engines for national security space launches, but ULA assigned those rockets to civilian projects. This effectively created a new crisis as it justifies the purchase of an essentially unlimited number of RD-180 rockets.
ULA isn’t limited to the military space program. The company is helping to develop NASA’s Space Launch System, which will eventually send U.S. astronauts to Mars. The aerospace giant is also working to build out the commercial space sector near earth as spaceflight becomes more routine.
(Editor’s note: This post has been updated)
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