Author Topic: United Launch Alliance (ULA) Statement in Response to SpaceX Lawsuit  (Read 49668 times)

Online Chris Bergin

ULA Release. No direct reference to SpaceX. Follows a very similar line to what Mr. Gass said at the hearing ( http://www.nasaspaceflight.com/2014/03/spacex-and-ula-eelv-contracts/ )

United Launch Alliance (ULA) Statement in Response to SpaceX Lawsuit

April 28, 2014

“ULA is the only government certified launch provider that meets all of the unique EELV requirements that are critical to supporting our troops and keeping our country safe. That is the case today, when the acquisition process started in 2012 and at the time of the contract award in December 2013.   

 

“The recent 5-year block buy contract was the result of a best practice acquisition process that enabled the government to negotiate a block of launches in advance that enabled significant operations efficiency and created the needed stability and predictability in the supplier and industrial base, while meeting national security space requirements.

“This disciplined approach saved the government and taxpayers approximately $4 billion while keeping our nation’s assured access to deliver critical national security assets safely to space.                                                             

“Space launch is one of the most risk-intolerant and technologically advanced components of our national security. That is why new entrants must meet rigorous certification criteria of vehicle design, reliability, process maturity and safety systems in order to compete, similar to the process that ULA’s Atlas and Delta products and processes have met.

“ULA now provides Atlas and Delta EELV rockets that have complimentary capabilities that assure our customers that their mission needs are met.  ULA has purchased a first stage engine built in Russia for the past 20 years for the Atlas rocket and has always maintained contingency capabilities if the supply was interrupted to ensure our customers mission needs are met.  ULA maintains a two-year inventory of engines in the U.S., and would be able to transition other mission commitments to our Delta rockets if an emergent need develops.   

“Since its inception in 2006, ULA has consistently exceeded EELV cost reduction goals. At the same time, we have conducted 81 consecutive launches, achieving 100% mission success.

“EELV continues to be the most successful DOD acquisition program of the past few decades. Launches have been delivered on schedule, meeting or exceeding all performance requirements, and exceeding cost reduction goals.”

Background
 
On April 17, 2014, the Department of Defense’s (DoD’s) 2014 Selective Acquisition Report (SAR) on the Air Force’s Evolved Expendable Launch Vehicle (EELV) stated that the Block Buy provided more than $4 billion in savings from the President’s FY15 Budget.

http://www.defense.gov/pubs/SAR_SUMMARY_TABLES_FINAL.pdf

The “Block Buy” contract is a commitment of 35 launch vehicle cores to achieve the economy of scale savings. The contract procures the hardware for 35 new cores and the capability to launch those and previous cores procured in prior year contracts (as early as 2002). The missions ULA supports for the U.S. Government and commercial customers have a wide range of capabilities, some of which have three times the lift capability of any of the new entrants advertised performance capability.  ULA provides unique ground and orbital insertion capabilities that are included in the contract that are unique to national security missions. 

The DOD acquisition strategy enabled new entrants – if certified – to compete for up to 14 missions in the FY’15–17 period. The goal of this element of the acquisition strategy was to demonstrate New Entrants ability to compete, with expectation that full and level competition would be enabled by FY’18.
 
Defense Department officials have recently stated that cancelling the contract and terminating the block buy – which involves hundreds of suppliers and is enormously complex – would cost billions. Additionally, it could put critical mission schedules at risk that would have impact on operational capabilities and the satellite program costs. ULA is focused on delivering on all of its mission assurance and cost reduction commitments that support its customers.

Since its inception, ULA’s commercially-developed Atlas and Delta rockets have executed an unprecedented 81 consecutive successful launches for the Air Force, National Reconnaissance Office, NASA and commercial customers, a 100 percent mission success standard unmatched in the U.S. launch industry.

###
« Last Edit: 05/01/2014 03:54 PM by Lar »

Offline ChrisWilson68

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ULA says it would cost $4 billion more if the block buy didn't happen.  Ask yourself why that is.

If ULA was confident that without the block buy they would still win all 35 cores, then the costs would be exactly the same.  That $4 billion difference must mean ULA expects that without the block buy they'll lose a lot of those 35 cores.

So the question is how many cores would be lost for ULA to have to charge $4 billion more for the remaining cores, and how much would the government save by paying less to SpaceX for those missions.

When is someone going to ask ULA that?

Offline Elvis in Space

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I suppose ULA would counter that losing a single billion(s) of dollars payload would ruin any calculation of savings on Spacex part.
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Offline QuantumG

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“ULA is the only government certified launch provider that meets all of the unique EELV requirements that are critical to supporting our troops and keeping our country safe. That is the case today, when the acquisition process started in 2012 and at the time of the contract award in December 2013.   

Apparently SpaceX didn't find out about the contract award until last month.

Quote from: Yang Yang? Television reporter
In announcing this suit, your question that you have just posed to the air force was, why not wait a few months before awarding ULA the contract? Well, the air force awarded ULA the contract a few months ago, back in December, so why are you waiting to file this suit now?

Quote from: Elon Musk
We only learnt about the big sole-source award in March. It may have been signed in December but it only came to light, interestingly, one day after the senate hearing on EELV launch costs, which seems remarkably coincidental to me. I don't think that's an accident. We've really just had about a month of awareness and we've been somewhat reeling from that news and trying to see, is this real? Is this actually what's going to be the case? When we basically made no progress with discussions with the air force, we thought we have basically no choice but to file the protest. - transcript

This reply from Musk is so strange than I actually went back and transcribed the question, something I typically don't do. I mean, we all heard about it back in January.
Human spaceflight is basically just LARPing now.

Offline ChrisWilson68

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I suppose ULA would counter that losing a single billion(s) of dollars payload would ruin any calculation of savings on Spacex part.

If ULA believed the U.S. government felt the risk of SpaceX wasn't worth the cost, then ULA would be confident they wouldn't lose any of the 35 cores to SpaceX even without the block buy, and they wouldn't have to charge $4 billion more without the block buy.  The only way ULA could have to charge $4 billion more would be if ULA didn't think they would win all those cores without the block buy, and that means they believe the U.S. government would find the price/risk trade-off of SpaceX versus ULA was in favor of SpaceX for many of these missions.
« Last Edit: 04/28/2014 11:30 PM by ChrisWilson68 »

Offline QuantumG

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The alleged cost savings were explained back in January. They have nothing to do with competition.

http://www.spacenews.com/article/military-space/39348us-air-force-claims-big-savings-on-eelv-block-buy

Human spaceflight is basically just LARPing now.

Offline muomega0

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On April 17, 2014, the Department of Defense’s (DoD’s) 2014 Selective Acquisition Report (SAR) on the Air Force’s Evolved Expendable Launch Vehicle (EELV) stated that the Block Buy provided more than $4 billion in savings from the President’s FY15 Budget.

The “Block Buy” contract is a commitment of 35 launch vehicle cores to achieve the economy of scale savings. The contract procures the hardware for 35 new cores and the capability to launch those and previous cores procured in prior year contracts (as early as 2002).

Defense Department officials have recently stated that cancelling the contract and terminating the block buy – which involves hundreds of suppliers and is enormously complex – would cost billions.
ULA says it would cost $4 billion more if the block buy didn't happen.  Ask yourself why that is.

If ULA was confident that without the block buy they would still win all 35 cores, then the costs would be exactly the same.  That $4 billion difference must mean ULA expects that without the block buy they'll lose a lot of those 35 cores.

So the question is how many cores would be lost for ULA to have to charge $4 billion more for the remaining cores, and how much would the government save by paying less to SpaceX for those missions.

A savings (4B) from a block buy should be expected, but savings from less cores may only save a bit if its *less than 5 years* based on 35.7B on 60 flights.  The two seem related: cores and five years.  Cutting the number of years appears to be the big cost item.

Do the extra costs include a US production run of the RD-180?   

Quote from: Lobo
Quote from: Garrett
and an interesting, related article from Doug:
ULA Speeds Up Engine Deliveries as House Mulls Ban on Russian Motor Use
http://www.parabolicarc.com/2014/04/28/52226/
I wonder, as brought up by the article, how all this will play out for Orbital as well?
... Or would they pay ULA to fund Aerojet to built a US built RD-180 and still support both EELV's?
A rebuilt engine is a new configuration.....it would not be certified to fly payloads per the new NASA/NRO/Air Force certification standard however.   Why lock into a 5 year deal with a LV that will not be certified? when the number of heavy flights has not been determined?  deju vu?

Quote from: Elon Musk
We only learnt about the big sole-source award in March. It may have been signed in December but it only came to light, interestingly, one day after the senate hearing on EELV launch costs, which seems remarkably coincidental to me. I don't think that's an accident. We've really just had about a month of awareness and we've been somewhat reeling from that news and trying to see, is this real? Is this actually what's going to be the case? When we basically made no progress with discussions with the air force, we thought we have basically no choice but to file the protest. - transcript
This reply from Musk is so strange than I actually went back and transcribed the question, something I typically don't do. I mean, we all heard about it back in January.
Not strange at all.   SpaceX expected to compete for 14 launches.  Back in 2011,the "point of contention is whether the Air Force will proceed with a proposed “block” purchase from ULA, or will it allow new entrants to bid on medium- and heavy-lift launches", not a mix of both.   Further, the 37.B over 5 years for 60 flights that would have been 41.5B was also surprising.

The key is five years and 36 cores....especially with a rebuilt RD-180 leads to a new configuration requiring new certification, and the competition term was 2015 to 2017, not 2014+ 5 years = 2019.

Offline Jim

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especially with a rebuilt RD-180 leads to a new configuration requiring new certification,

What rebuilt RD-180?  And even so, re-certification is not necessarily required.
« Last Edit: 04/29/2014 12:23 AM by Jim »

Online Coastal Ron

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If ULA believed the U.S. government felt the risk of SpaceX wasn't worth the cost...

Regardless their feelings about SpaceX, it would be prudent business practice to assume your competitor will win some part of a competed program.

Quote
...then ULA would be confident they wouldn't lose any of the 35 cores to SpaceX even without the block buy, and they wouldn't have to charge $4 billion more without the block buy.

We don't know what the real price breaks are for the block buy, and whether the Air Force could get the same pricing with, say, a ULA block buy of 20 as they would with 36.  But in the realm of government contracting, where you don't take risks on future customer orders, ULA has no incentive to try to lower customer prices if there is a risk they have to absorb lower profits because of future customer order changes.

In contrast, SpaceX no doubt is buying in economic order quantities based on forecasted order demand, and not based on actual orders.  There is risk for such a strategy, but if you are in a business where you feel assured of continued future demand, then it's not a high risk.
If we don't continuously lower the cost to access space, how are we ever going to afford to expand humanity out into space?

Offline QuantumG

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Not strange at all.   SpaceX expected to compete for 14 launches.  Back in 2011,the "point of contention is whether the Air Force will proceed with a proposed “block” purchase from ULA, or will it allow new entrants to bid on medium- and heavy-lift launches", not a mix of both.   Further, the 37.B over 5 years for 60 flights that would have been 41.5B was also surprising.

The key is five years and 36 cores....especially with a rebuilt RD-180 leads to a new configuration requiring new certification, and the competition term was 2015 to 2017, not 2014+ 5 years = 2019.

SpaceX isn't contesting the reduction of the 14 launches. They're contesting the 36 core block buy. That's why the journalist asked Elon why SpaceX had taken so long to respond.

Perhaps you're thinking that it was in March that the air force announced the reduction of the 14 competed launches to 7. That announcement didn't happen "one day after the senate hearing on EELV launch costs", it happened on March 4, the day before the senate hearing. Maybe Elon didn't hear about it until 2 days later, but that's just more evidence that SpaceX doesn't keep up with the news. In any case, it's not relevant to the 36 core block buy.

Human spaceflight is basically just LARPing now.

Online TrevorMonty

How much cheaper would ULA prices been if they had to bid for each of bulk buy launches,  knowing that SpaceX could also bid.

Offline baldusi

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One thing I don't quite understand is when to when are the nominal launch dates. Because a fast DoD launch campaign is 36 months, and 60months is par. Since Falcon 9 can't compete until It gets certified (July?). And assuming that mythical 60% of missions, they could compete, at best, on 6 or seven of those missions. And that's assuming that the 14 that were left out to compete we're not those that they could do in 42months since Dec-2013. Thus, the block buy might be the correct decision.
Now, as an economist, if they left just one mission in the block buy that might have been reasonably expected to be compete by SpaceX (say a mission in FY2017 or later). Then this block buy might perfectly be open to scrutiny. Since I don't have access to the details, I can't make further comments.

Offline muomega0

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especially with a rebuilt RD-180 leads to a new configuration requiring new certification,

What rebuilt RD-180?  And even so, re-certification is not necessarily required.
Exactly!   Buy more engines now to ensure you have 5 years of engines for the new contract.  Its cheaper to buy the engines up front, have extra cores for COTS, and not take a risk on "its not a new configuration" with a five year contract in hand.  Cost reductions?  always 20 years away.

Quote
...then ULA would be confident they wouldn't lose any of the 35 cores to SpaceX even without the block buy, and they wouldn't have to charge $4 billion more without the block buy.
We don't know what the real price breaks are for the block buy, and whether the Air Force could get the same pricing with, say, a ULA block buy of 20 as they would with 36.  But in the realm of government contracting, where you don't take risks on future customer orders, ULA has no incentive to try to lower customer prices if there is a risk they have to absorb lower profits because of future customer order changes.

In contrast, SpaceX no doubt is buying in economic order quantities based on forecasted order demand, and not based on actual orders.  There is risk for such a strategy, but if you are in a business where you feel assured of continued future demand, then it's not a high risk.
4B over 40B  is a 10% discount to provide more cores than the demand requires, takes forecasted orders from the competition (14 down to 7), and keeps the business in place for 5 years.

Not strange at all.   SpaceX expected to compete for 14 launches.  Back in 2011,the "point of contention is whether the Air Force will proceed with a proposed “block” purchase from ULA, or will it allow new entrants to bid on medium- and heavy-lift launches", not a mix of both.   Further, the 37.B over 5 years for 60 flights that would have been 41.5B was also surprising.

The key is five years and 36 cores....especially with a rebuilt RD-180 leads to a new configuration requiring new certification, and the competition term was 2015 to 2017, not 2014+ 5 years = 2019.

SpaceX isn't contesting the reduction of the 14 launches. They're contesting the 36 core block buy. That's why the journalist asked Elon why SpaceX had taken so long to respond.

Perhaps you're thinking that it was in March that the air force announced the reduction of the 14 competed launches to 7. That announcement didn't happen "one day after the senate hearing on EELV launch costs", it happened on March 4, the day before the senate hearing. Maybe Elon didn't hear about it until 2 days later, but that's just more evidence that SpaceX doesn't keep up with the news. In any case, it's not relevant to the 36 core block buy.
Government agencies must send official notices.

14 launches vs 7 for small company at 60M, call it $100M is 1.4B vs 700M, quite the difference from 36.7B.
If the AF signed a core order back in Dec and knew of a reduced demand, did not inform until March, then that's a crime, plain and simple. 

The block buy is relevant.   One company has all of their overhead covered by the government for the next 5 years, while the second based their pricing on winning a fraction of 14 not 7, at a cost 75% less.  At 100M, the 1.4B is one third of the "savings".

The block buy is especially relevant if the core numbers include the RD-180, if a replacement is a new configuration, or if the RD180 is banned-->  at least 9 cores are required for certification.

There is a simple solution however:  Award 14 or so launches to the remaining partners with part of the $4B savings and start building a zero boiloff LEO depot.

Will the US ever step up and start shifting the work force to more satellites, payload, missions rather than rebuilding 1960s hardware? There is quite a bit of exciting new work out there...

Offline ChrisWilson68

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One thing I don't quite understand is when to when are the nominal launch dates. Because a fast DoD launch campaign is 36 months, and 60months is par. Since Falcon 9 can't compete until It gets certified (July?). And assuming that mythical 60% of missions, they could compete, at best, on 6 or seven of those missions. And that's assuming that the 14 that were left out to compete we're not those that they could do in 42months since Dec-2013. Thus, the block buy might be the correct decision.
Now, as an economist, if they left just one mission in the block buy that might have been reasonably expected to be compete by SpaceX (say a mission in FY2017 or later). Then this block buy might perfectly be open to scrutiny. Since I don't have access to the details, I can't make further comments.

In September 2013 ULA won a contract to launch the Mexican Morelos-3 mission, which is scheduled to launch as early as 2015 on an Atlas V.  So ULA only needs a bit more than 2 years notice, at most, not 5 years, to build an Atlas V.

So a block buy covering the next 2 years is defensible by your logic.  A block buy extending beyond 2 years is not.

Offline QuantumG

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Perhaps you're thinking that it was in March that the air force announced the reduction of the 14 competed launches to 7. That announcement didn't happen "one day after the senate hearing on EELV launch costs", it happened on March 4, the day before the senate hearing. Maybe Elon didn't hear about it until 2 days later, but that's just more evidence that SpaceX doesn't keep up with the news. In any case, it's not relevant to the 36 core block buy.

Government agencies must send official notices.

and? Elon's trying to imply that the announcement was a retaliation for the senate hearing. The facts don't fit his version of events.
« Last Edit: 04/29/2014 02:34 AM by QuantumG »
Human spaceflight is basically just LARPing now.

Offline rcoppola

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A big part of me wishes Elon and now Congress didn't get into this whole Russian Engine diatribe.

The RD-180 has served the Atlas V and this nation very well. Not that it wouldn't be prudent to plan for a potential domestic replacement. But let's dial some of this back a bit.

These things have a way of snowballing to the point where cooler heads no longer prevail and we cut off our nose to spite our face.

I  hope the people who work in the trenches over at ULA don't get thrown into a lot of political BS. They don't deserve it. I want the rhetoric to be dialed down a bit.

I'm just feeling for the guys doing all the heavy lifting who are going to get caught in the middle of all this crap through no fault of their own.
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Offline ChrisWilson68

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I'm just feeling for the guys doing all the heavy lifting who are going to get caught in the middle of all this crap through no fault of their own.

It wasn't the fault of the buggy-whip makers either when their business dried up when the automobile came along.  That doesn't mean automobiles were a bad thing.

There are legitimate reasons to question whether we should be dependent on Russia for rocket engines.  Nobody should be dialing back saying what they believe because it is going to be bad for someone's career.  Every dollar that isn't spent on Atlas V will be spent somewhere else, and someone else's career will benefit.

Offline catdlr

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Quote from: Elon Musk
We only learnt about the big sole-source award in March. It may have been signed in December but it only came to light, interestingly, one day after the senate hearing on EELV launch costs, which seems remarkably coincidental to me. I don't think that's an accident. We've really just had about a month of awareness and we've been somewhat reeling from that news and trying to see, is this real? Is this actually what's going to be the case? When we basically made no progress with discussions with the air force, we thought we have basically no choice but to file the protest. - transcript
Quote from: QuantumG
This reply from Musk is so strange than I actually went back and transcribed the question, something I typically don't do. I mean, we all heard about it back in January.


Maybe Mr. Musk needs to become a member of NSF?
« Last Edit: 04/29/2014 02:26 AM by catdlr »
Tony De La Rosa

Offline Antares

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Now here's a crazy scenario that one should think about: what if ULA doesn't bid on the launches that F9 can lift?  Basically, they say to USAF and SpaceX, put up or shut up.
If I like something on NSF, it's probably because I know it to be accurate.  Every once in a while, it's just something I agree with.  Facts generally receive the former.

Offline ChrisWilson68

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Now here's a crazy scenario that one should think about: what if ULA doesn't bid on the launches that F9 can lift?  Basically, they say to USAF and SpaceX, put up or shut up.

I don't think ULA is stupid enough to do that.  It just gives SpaceX a chance to prove themselves.

ULA has been doing the opposite.  The block buy is the prime example -- they seem eager that SpaceX get as little chance as possible to prove themselves, and that whatever chances SpaceX gets be delayed as long as possible.

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