SASC Unhappy With Slow Air Force Progress on RD-180 Replacement

Key members of the Senate Armed Services Committee (SASC) left no doubt at a recent hearing about their dissatisfaction with the Air Force’s slow progress in building a replacement for Russia’s RD-180 rocket engine.

Secretary of the Air Force Deborah Lee James, Air Force Space Command Commander Gen. John Hyten, and Government Accountability Office (GAO) expert Cristina Chaplain testified to SASC’s Strategic Forces subcommittee on April 29 about a wide range of military space issues, but space launch dominated the discussion.

Subcommittee chairman Jeff Sessions (R-Alabama) and full committee chairman John McCain (R-Arizona) demanded to know why the Air Force is moving so slowly after Congress authorized and appropriated $220 million for FY2015 to build an American replacement for Russia’s RD-180 engine by 2019.  The RD-180 is used for the United Launch Alliance’s (ULA’s) Atlas V rocket.  Both Senators said the Air Force has spent only $14,000 of that money so far.

James responded that the Air Force has obligated $50 million, of which $37 million is FY2014 money and $13 million is from the FY2015 amounts, and she plans to obligate another $45-50 million in the next six months.   (No explanation was given for the difference in the committee’s figures and those provided by James, though funds are “obligated” once a contract is signed, but not “spent” until the money is transferred to the contractor, so that may be one factor.)

Hyten explained that the launch industry has changed significantly in the past few years thanks to NASA’s decision to use public private partnerships (PPPs) like the one it has with SpaceX to develop new launch capabilities.  He argued that the Air Force needs time to learn how to interact effectively with industry in this new environment.

In 2006, ULA was formed as a joint venture between the two major launch services providers  – Boeing and Lockheed Martin – to ensure a strong industrial base at a time of reduced launch demand.   ULA has been a monopoly launch services provider for most national security launches since then using the Atlas V and Delta IV.  SpaceX wants to break into that market and Congress has embraced the idea of competition as a way to lower launch costs.

DOD and the Air Force apparently have now embraced competition as well.  James went so far as to say that U.S. national security “will be far better off the day that we certify SpaceX” and reiterated that will be done by June.  Last year, DOD promised it would be done by December 2014, but that did not happen. James and others have since made new assurances that it will be accomplished by June.

James and Hyten plan to adopt NASA’s PPP model and have a four-step path that will “result in a commercially competitive domestic launch capability to replace the RD-180.”

• Step 1:   Technology risk reduction, for which the money being obligated now will be used.
• Step 2: Invest in rocket propulsion systems with multiple providers “to partner in their ongoing investment in domestic propulsion systems.”   
• Step 3:  Using the PPP approach, enter into agreements with launch system providers to provide domestically-powered launch capability. 
• Step 4:   Compete and award contracts “with certified launch providers for launch services during the period 2018-2022.”

The years 2018-2022 would be a period of transition from the RD-180-powered Atlas V to the new systems.

Hyten and James also continued to press their case that they do not want to replace one monopoly with another, with SpaceX replacing ULA in that role.  The argument goes that because ULA recently decided to end production of the smaller version of Delta IV, it now has only Atlas V and the very expensive, larger Delta IV Heavy to offer.   Although the Atlas V can compete with SpaceX, if it cannot be used after 2019, SpaceX would win every competition because the Delta IV costs $400 million per launch.  Hyten and James said they may be able to have a new American engine by 2019, but it will be 2022 before that engine is integrated into a new rocket and certified.  For those intervening years, SpaceX would be a monopoly for national security launches. Thus they want Congress to allow use of the RD-180 until 2022.

Last week, the House Armed Services Committee (HASC) approved a FY2016 NDAA that provides more flexibility in the 2019 date.  At the SASC hearing, Sen. Angus King (I-Maine) actually recommended that the Air Force cut itself “some slack” on the date because he did not think it could be ready by 2019 and it would be worse for DOD to come back at that time and say it needed more RD-180s.

Hyten and James also want Congress to clarify that ULA can obtain from Russia all 18 of the RD-180 engines envisioned under the December 2013 block-buy contract with ULA. The Air Force is interpreting the law to mean that only the 5 engines that were paid for – rather than contracted for – prior to February 2014, when Russia annexed Crimea, are permissible.   Sessions indicated that obtaining all 18 engines was congressional intent in the FY2015 NDAA.

Sen. Joe Donnelly (D-Indiana), the subcommittee’s top Democrat, wanted to know what assurance DOD has that Russia will deliver the RD-180s already under contract.   James replied that Russia has a track record for delivering what it promised, but if not, there is a backup plan.  ULA has a two year inventory of RD-180s.  If no more were delivered, about one-third of the national security satellites could be launched by SpaceX’s Falcon 9, but the other two-thirds would have to be shifted to ULA’s Delta IV, which is “30-50 percent more expensive” than Atlas V “and that’s not in our budget submission right now,” Hyten said.

SASC and its subcommittees will markup their version of the FY2016 NDAA during the week of May 11.  The markups are all closed.