Rocky Mountain News April 08, 2005
Air Force to boost two rocket firms
Lockheed, Boeing both to get launches
By Roger Fillion
COLORADO SPRINGS - Let the rocket-launch competition begin between Lockheed and Boeing - but don't expect a real competition.
Instead, both will be guaranteed winners. It's unclear whether taxpayers will come out ahead, however.
In a major shift, the U.S. Air Force plans to divvy up evenly about two dozen future satellite launch contracts between Jefferson County's Lockheed Martin Space Systems and Boeing. By one estimate, the launches are expected to fetch at least $100 million each.
Unlike the past, there won't be a knock-down, drag-out battle with one contractor winning the lion's share of launches hands down.
Rather, Uncle Sam wants to be assured that both companies are healthy, so at least one is always available to launch government spy and communications satellites.
"We're looking at balancing it as best as we can," Lt. Gen. Brian Arnold, commander of the Space and Missile Systems Center in Los Angeles, told reporters Thursday at the National Space Symposium. "We want to keep two viable vendors."
In the last major competition in 1998, Boeing won two-thirds of the launches in a high-stakes competition, although the company was later forced to give up some of those launches because of a scandal.
The new launch-acquisition strategy comes after the Air Force last month reinstated Boeing as a contractor for its space rocket program. That followed a 20-month suspension after the No. 2 U.S. defense contractor illegally obtained thousands of Lockheed rocket launch documents linked to the 1998 competition.
The Air Force said the stacks of documents allowed Boeing to win the bulk of the launches awarded in the 1998 rocket competition between the two companies.
As part of the punishment, the Air Force also stripped Boeing of about $1 billion worth of satellite launches and handed them to Lockheed.
For its future launches, the Air Force will rely on Boeing's Delta IV and Lockheed's Atlas V boosters.
Lockheed's Atlas rockets are built at the company's Waterton Canyon facilities in Jefferson County. Up to 800 employees there work in the program.
Arnold said each company would receive four launches a year, with three from Florida's Cape Canaveral and one from Vandenberg Air Force Base in California. The Air Force is expected to start submitting its purchase orders in August.
"The two companies are guaranteed winners," said analyst John Pike, director of GlobalSecurity.org. "Whether the taxpayer is going to be a winner is another question," he added, noting the lack of competition.
"In the real world," Pike continued, "you can't have everything."
The Air Force's shift in its rocket- launch acquisition strategy reflects Uncle Sam's recent "assured access to space" policy.
To be flexible, the Air Force is now committed to keeping both companies in its launch program for at least a few more years, if not longer. That way, if one firm's booster fails, the Air Force can turn to the other to put a key satellite into orbit.
"This is important for the government and Lockheed Martin," said Joan Underwood, spokeswoman for Lockheed Martin Space Systems in Jefferson County.
"This will maintain two launch providers. It's also focused on maintaining the critical skills and the launch infrastructure needed to maintain assured access to space."
It's a big change from a decade ago, when the Air Force's launch acquisition strategy was first conceived under the so-called Evolved Expendable Launch Vehicle competition.
"When the program first started a decade ago, there was going to be one rocket company, not two," said Pike of GlobalSecurity.org. "Then they changed it to two. But they were going to compete."
Air Force brass had explored introducing some form of competition this time around as well.
But Aerospace analyst Paul Nesbit of JSA Research in Newport, R.I., noted that because the Air Force wants two launch providers, it faced little choice but to divvy up the launches equally.
Why? So neither Lockheed nor Boeing can gain a long-term financial edge over the other by spreading out costs over a greater number of launches.
"The one with the lighter workload would have a cost disadvantage," Nesbit said.
That acquisition strategy comes amid a slump in the commercial launch market. Because of a dearth of commercial satellites being sent into space, Lockheed and Boeing can't fall back on commercial satellite launches in the event they come up short with the Air Force.
In handing out disproportionate shares of launches at its 1998 competition, experts said, the Air Force mistakenly assumed that a thriving commercial launch market would exist to support both companies.
© Copyright 2005, The E.W. Scripps Co.
