Author Topic: United Launch Alliance (ULA) Statement in Response to SpaceX Lawsuit  (Read 49390 times)

Offline manboy

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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 Launce 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.

###
ULA (or at least their PR department) has one very distorted view on reality.
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Offline meekGee

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

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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.
The impression I got was that the disclosure was timed to avoid having to talk about it at the senate hearing, not that it was retaliation.

Offline Kabloona

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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.
The impression I got was that the disclosure was timed to avoid having to talk about it at the senate hearing, not that it was retaliation.

Agreed. He felt he was kept in the dark so he couldn't make a stink about it at the hearing.

He wound up looking like Wile E. Coyote, still running without realizing he was already off the cliff. Now he's back with a box of dynamite.
« Last Edit: 04/29/2014 05:25 AM by Kabloona »

Offline Hauerg

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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.

Regarding the US built RD-180:
Yesterday I heard in the news that US is revoking (if this is the correct word) licenses granted to Russia.
Imagine the Russians hit back and revoke the RD-180 license. Then what? Build a pirate version while US companies are suing everybody and their grandmother for illegal downloading of music?

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.

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.
It's not my logic. Is economic analysis. Commercial launches are usually done in 24 months. DoD, as stated previously, are 36 to 60. And you need to know the launch vehicle. For analysis, launch environment, certification, etc. DoD also wants to look at the certificate or the rocket production.
But the fact is that they did put aside 14 launches for competition. As stated previously, if FY2017 was the soonest possible launch, and only for Falcon 9 v1.1 capable payloads, it could very well mean that those 14 are the ones after FY2017 that Falcon 9 can actually loft. Thus, it might be that the contract is correct.
In particular, anything requiring a Falcon Heavy will be so expensive that it will require at least 5 years of campaign, and FH won't get three launches until 2016, at the earliest. Thus, I don't believe they could actually bid for anything launching before 2020 that's beyond F9 capabilities.
And returning to the block buy, if we assume a Delta Heavy per year, those were just 26 mission, and other 14 were going to be competed, which is almost 30% of the missions in that 5 year period (missions total). Since no competitor was available for half of the block buy. It would seem to fit very well with the 60% of missions that SpaceX stated they could cover.
BTW, Morelos is on an inclined orbit and thus couldn't have been launched by an Ariane 5, nor Falcon 9. HIIA was too expensive and Proton-M and Sea Launch too unreliable.
« Last Edit: 04/29/2014 05:37 AM by baldusi »

Offline QuantumG

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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.
The impression I got was that the disclosure was timed to avoid having to talk about it at the senate hearing, not that it was retaliation.

Ahh, okay. It occurs to me, now, that I may be suffering the international-date-line time lag here. I didn't watch the video live, so I probably read the news before watching the video.
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Offline Jim

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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.

What recert?  There isn't one required.

Offline muomega0

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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.
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.

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.
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.
Do you have a link that specifically states 36 cores, not 14 for Dec?

In Jan, per Avweek, by QuantumG's link to the Jan Announcement:

Quote from: AvweekJan2014
Air Force announcement in Dec that contracts cover 14 of the 36 EELV cores anticipated in the multiyear block buy
AF is expected to begin awards for the competitively bid launches in 2015 for missions launching in 2017.
An additional 14 missions will be awarded competitively, giving upstarts like Space Exploration Technologies Corp. of Hawthorne, Calif., a crack at the market.

So by your very link, 14 of 36 were part of the block buy, not 36 of 36, and 14 cores will be completed.
But now its "understood" that the deal was for 36 of 36 :o  How?

If the AF signed a core order back in Dec, announced 14 but its really 36, held back knowledge of competing only 7 of 14 cores, limited disclosure to only a few participants, then that's a crime, plain and simple.

Events: 
2011 "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"

Jan 2014   U.S. Air Force Claims Big Savings on EELV Block Buy....meaning that together the contracts cover 14 of the 36 EELV rocket cores anticipated in the multiyear block buy.

Quote from: avweekJan2014
- The Air Force plan entails buying the 36 rocket cores from ULA on a sole-source basis.
- An additional 14 missions will be awarded competitively, giving upstarts like Space Exploration Technologies, a crack at the market.
- ULA in 2010 quoted prices for an Atlas 5 launch to NASA that ranged from $104 to $334 million

“SpaceX expects the billion dollar plus fixed payment subsidy (aka the ELC) to ULA to be phased out over time, as that is obviously contrary to fair and open competition,” Elon Musk, the company’s chief executive, said in an email.

The Air Force is expected to begin awards for the competitively bid launches in 2015 for missions launching in 2017.

March:   The Air Force said it had halved the number of missions open to tender, deferring several payloads beyond the current contract ending in fiscal 2017 and potentially further reducing the number of satellite launches for which SpaceX can compete.

April Hearing  Disclosure of block buy of 36 cores, not 14

April 17, 2014  "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."

May 2014  RD-180 Availability Risk Mitigation Study due with  focus on issues, risks, costs, and options
« Last Edit: 04/29/2014 02:00 PM by muomega0 »

Offline Lobo

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

Well, as I understand ULA's formation and function from reading post on the forums, they are less of a private company like SpaceX, and more like a government agency.  They are legally structured such that they can bid on private launch contracts where an actual US government agency cannot.  But they are essentially structured as a government agency, for the primary purpose of ensuring space access to the USAF and DoD.  I think it's closer to Roscosmos than to SpaceX.  Although "technically" a private company.  So when talking about ULA bidding against SpaceX for USAF and DoD launches, that is a little like talking about Roscosmos bidding against some new, private Russian space launch company, for Russian government payloads. 
It's a bit apples to oranges. 

With ULA, if more government launches are opened up to bid and they start loosing launches to SpaceX, they will need to get more money from the government for the launches they do get in order to maintain their capabilities.  Their costs would need to go up more per launch because their overhead will still be the same.  I think that's what this block buy was partly about, ensuring ULA gets enough launches over the next number of years to maintain itself, and thus USAF's own quasi-government agency for launching their payloads.  It was the way they had to allocate a piece of the defense budget to ULA, since it's not allocated directly to them.
And it's probably a way for the USAF/DoD and ULA to buy some time to figure out how to move forward with this new dynamic.  If SpaceX can offer the same launch capability and services for cheaper than ULA, then there'd really be no way ULA could get any future contracts if there's a actual open competition for each launch.  So, does USAF allow ULA to reorganize to become an actual independent company like SpaceX?  (if they can)  Or do they just opt to continue to find ways to fence off SpaceX from bidding more than a handful of contracts so to guarantee ULA the amount of money and launches needed for ULA to maintain it's current capabilities?  There will be some tough decisions to make that will cause people on one side or the other a lot of heart burn.

Offline baldusi

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ULA is a private company, with the same obligation as any other company: to maximize value for the share holders. They happen to have a cost-plus contract with government. But that is a very far cry from being run as a government agency. In fact, the most peculiar part is that ULA has just two shareholders that can actually compete with ULA and thus have an implicit mandate to only handle that contract and not expand nor invest more than needed to keep that contract. Look at the latest profit statement from LM and the Space division profit is purely ULA's.

Online clongton

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With ULA, if more government launches are opened up to bid and they start loosing launches to SpaceX, they will need to get more money from the government for the launches they do get in order to maintain their capabilities. 

They already get $1B a year just to maintain the capability without doing a single thing.
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Offline Jim

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ULA is a private company, with the same obligation as any other company: to maximize value for the share holders. They happen to have a cost-plus contract with government.

They are all fixed price.

Offline Lars_J

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With ULA, if more government launches are opened up to bid and they start loosing launches to SpaceX, they will need to get more money from the government for the launches they do get in order to maintain their capabilities.

If you include LM and Boeing profit margin from ULA as a "capability", then yes.

Welcome to capitalism and the open market. If SpaceX cannot provide the same technical capability as ULA, they will still get the business, and they can charge as much as they want. But if they can... USAF will likely still require that two providers are a part of the process. ULA might be forced to down-select their internal assured access from two LV's.

Offline Lobo

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With ULA, if more government launches are opened up to bid and they start loosing launches to SpaceX, they will need to get more money from the government for the launches they do get in order to maintain their capabilities.

If you include LM and Boeing profit margin from ULA as a "capability", then yes.


By "capability" I mean all of the processes and regulations that ULA was formed to conform with for USAF and DoD launches.  Nulcear ratings, vertical integration, etc (Jim could list them all I'm sure).  As well as redundant LV's, each with pads on both coasts.  If they want ULA to retain all of that, they'll need to fund them to do so without about as much money as they are now.  Not just the ammount of mass they can heft to orbit.


Welcome to capitalism and the open market. If SpaceX cannot provide the same technical capability as ULA, they will still get the business, and they can charge as much as they want. But if they can... USAF will likely still require that two providers are a part of the process. ULA might be forced to down-select their internal assured access from two LV's.

I'm not defending it.  Just saying that's how I understand that it currently works.  That's it's not quite as simple as just letting two private companies duke it out.  One is a private company, the other is sort of an extension of the government, that was set up specifically to accomodate USAF/DoD's space access, with LV's and processes all set up to meet their needs.  That's why SpaceX seems to be meeting so much resistance as they try to tweak their off-the-shelf LV to meet EELV requirements.  Just has a private Russian launch provider would likely have a difficult time competing with Roscosmos for Russian government payloads.

Maybe it's a little like if Cessna Aircraft developed a new fighter jet that had the same capabilities as the F-22, and they were selling them to other [freindly] governments.  Once existing USAF contracts are filled with LockMart, technically LockMart and Cessna should have a free competition to supply future supply contracts of fighters.  But the the F-22 was developed specifically for the USAF needs.  I'm guessing Cessna would find it very difficult to actually get a crack and USAF aircraft supply.  (this is a rough analogy)
It's easy to say just let them compete and buy the lowest price plane that meets the requirements.  But it's just not quite that simple as things are now.  USAF is tied to LockMart on the F-22 like they are tied to ULA on the EELV's.  USAF would need to let ULA restructure themselves into a fully independant and private company, and streamline (as you said) in order for things to be apples-to-apples.  And that may happen.  But "open competion" between ULA and SpaceX as ULA is currently structured is more apples-to-oranges.  As Jim has said, ULA currently cannot downselect to one LV, and they cannot develop a new LV.  They can only operate Atlas V and Delta IV and their derivatives.  ULA couldn't buy some low cost gas generator kerolxo engine and put them on a 5m kerolox core and make a new, lower cost LV.  They can only "compete" with Atlas V and Delta IV, or variants of them.  Which means they have all of the overhead of those systems and their infrastructure.  They'd need the feedom to really be their own company, and be able to do whatever is needed to compete against SpaceX, ArianeSpace, etc.  My understanding is they cannot do that right now.  They can only do, what they are already doing.

Again, that's my understanding from reading posts by Jim and others here.  If it's incorrect, then please let me know. :-)


« Last Edit: 04/29/2014 07:57 PM by Lobo »

Offline Lars_J

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TWo points, lobo:
1. ULA is not a government organization, it is just a commercial entity with deep ties to the government. Not the same thing.
2. They certainly could eliminate AV or DIV if they wanted to - or more correctly, if their owners (Boeing and LM) wanted to. SpaceX entering the EELV market removes any remaining legal hurdle, if there ever was one.
« Last Edit: 04/29/2014 08:48 PM by Lars_J »

Offline Lobo

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TWo points, lobo:
1. ULA is not a government organization, it is just a commercial entity with deep ties to the government. Not the same thing.


I know that and said it repeatedly.  But they were established is the main purpose of supplying launch servies to the USAF and DoD, (rather than the USAF itself doing the launches) rather than being established to supply launch services on the open market first.  And that's a big difference.  They are a government contractor as opposed to a private sector supplier (primarily).  If you've ever worked with the government and government contracts, you'll know that the more they sell to the government, the more they look like the government, even if being officially private.  Because they have to do so much to comform to government red tape and beuracracy, that they have to add so much overhead to deal with ti all, often they eventually can longer compete on the open market.  At least with that particular product or division of the company.  LockMart and Boeing are private companies, but their departments that do government military contracting are basically quasi-government agencies themselves.  In function if not in legality.
Hence my term, "quasi-government agency".  ULA is -not- a government agency, but they were formed specifically to service the government, unlike SpaceX.  And thus have a lot of baggage that is very similar to a government agency.



2. They certainly could eliminate AV or DIV if they wanted to - or more correctly, if their owners (Boeing and LM) wanted to. SpaceX entering the EELV market removes any remaining legal hurdle, if there ever was one.

I thought Jim said they couldn't, because the government has needs for both currently and is subsidizing them to keep both?  Perhaps I've misunderstood that.

Offline Targeteer

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Yes it's from Facebook but still a not so subtle message from ULA...

"Launching rockets into space—rockets with satellite payloads to keep our troops and our country safe, help us forecast the weather and communicate with each other—is a highly complex task allowing no room for error. No other American company does it better than ULA. In fact, since 2006 we’ve had over 80 consecutive launches without a single launch failure. Not one. With so much at stake, it’s easy to understand why nearly every mission-critical payload is launched and delivered by the most experienced and reliable company of its kind in this country: ULA.:"

That "without a single failure" might be in question to some if you consider payloads that barely did or did not reach the pre-planned orbit :)
« Last Edit: 04/30/2014 10:50 AM by Targeteer »
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Offline ugordan

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Cool poster. I wonder about the "over 80 consecutive launches" part, though. Is there any other way to do launches other than consecutively?   ;)

Also, is it me or does ULA prefer to show off Atlas instead of Delta in their PR stuff? Slightly ironic considering where the booster engine comes from, the "American company" part and the fact that the two propulsion hiccups so far in the entire EELV program were due to the American upper stage engine.

Offline Proponent

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I wonder about the "over 80 consecutive launches" part, though. Is there any other way to do launches other than consecutively?   ;)

Good point.  I, in turn, wonder whether that phrase is intended to make the reader think "80 consecutive successful launches" with out actually stating such.

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