EELV Launches Dished Evenly to Boeing and Lockheed Martin

COLORADO SPRINGS, Colo. - The U.S. Air Force plans to divide the third batch of Evolved Expendable Launch Vehicle (EELV) missions as evenly as possible between Boeing and Lockheed Martin, an Air Force official said.

The 23 missions will be allocated rather than awarded competitively based on price in order to keep both rocket makers viable through at least 2010, Air Force Lt. Gen. Brian Arnold, commander of Space and Missile Systems Center in Los Angeles, said April 7.

"We said let's try and balance this out as best as we possibly can, so we're looking at keeping production at the plants at a certain level, and keeping it as routine as you possibly can at both the West and East Coast" launch ranges, Arnold said in an interview at the 21st National Space Symposium here.

The ideal split of the 23 missions in Buy 3 of the EELV program would provide each company with about four launches per year -- three from Cape Canaveral Air Force Station, Fla., and one from Vandenberg Air Force Base, Calif., Arnold said.

Launches would be scheduled in such a way as to maintain steady production lines at Boeing and Lockheed Martin, Arnold said. "The idea is making sure they have enough capacity and work that they are not wasting a lot of time," he said. "Keeping an entire plant open to produce a core [rocket stage] a year doesn't make a lot of sense, so we went with the allocation process."

The two EELV rocket families are the Atlas 5 built by Lockheed Martin Space Systems of Denver and the Delta 4 developed by Boeing Expendable Launch Systems of Huntington Beach, Calif. The Air Force helped finance development of both vehicles under the assumption that a strong commercial market would keep production rates high and unit costs down. But the commercial market collapsed in the late 1990s, leaving both the Atlas 5 and Delta 4 largely, if not completely, dependent on U.S. government business.

The U.S. National Space Transportation Policy, released in January, calls for the Air Force to provide the support needed to keep both production lines viable.

The allocation strategy for Buy 3 was approved by Peter B. Teets, who retired in March as undersecretary and acting secretary of the Air Force and director of the National Reconnaissance Office, Arnold said.

A draft solicitation outlining the procurement strategy was delivered to Boeing and Lockheed Martin April 6. The companies are expected to respond within the next month, and the Air Force hopes to have the launches assigned by the end of May, Arnold said. Plans call for ordering specific launches in August, he said.

"I think this [plan] is going to be well-accepted by both Lockheed Martin and Boeing," Arnold said.

The price for the individual missions will be based on what the Air Force has dubbed "should-cost" accounting, Arnold said.

"'Should-cost' means you drill down and you know what it costs to build a certain component and what wage they paid on both the range and in the plant," Arnold said. "We know what the production cost is, and we know they have a certain fee they take on top of that, and we add that up and say 'That is the right price to pay.'"

Air Force officials as well as an independent group of auditors will help determine the prices, Arnold said. "We really think we're on safe ground there," he said. Arnold would not divulge how much the Air Force thinks it will spend on the missions.

The space transportation policy also requires the Pentagon to pay the annual fixed costs for both EELV rocket makers, but that money is not part of the Buy 3 pricing, he said.

The Buy 3 procurement was delayed more than a year while Boeing was under sanctions that prevented it from competing due to contracting improprieties during Buy 1 in 1998. Boeing won 19 of the 28 initial EELV missions, but had to forfeit seven of those as part of the punishment. Lockheed Martin won three more EELV missions while Boeing was on suspension.

The Pentagon lifted the suspension in March.

"The plan as laid out by Gen. Arnold is absolutely in step and consistent with" the National Space Transportation Policy, Lockheed Martin spokesman Tom Greer said. "The important thing is that it is focused on maintaining the critical skills and the launch infrastructure required for maintaining assured access to space."

Buy 3 includes some heavy-lift missions, which will provide Lockheed Martin the opportunity to finish developing a heavy-lift version of the Atlas 5.

"Our new [request for proposal] says Lockheed can go ahead and build a heavy, and I suspect they probably will," Arnold said. "If you look forward to the Moon, Mars and beyond, there's going to be a requirement probably for a heavy booster to launch" NASA's Crew Exploration Vehicle.

Lockheed Martin has indicated that completing development of the heavy-lift Atlas 5 would take about 30 months from the time an order is placed, Greer said.

But the Air Force will not provide any additional funding for the development work, Arnold said.

It also is unclear whether the Air Force would require Lockheed Martin to perform a demonstration mission of a heavy-lift Atlas 5, as it did with Boeing's Delta 4. "It has not gotten to that level of detail yet," Arnold said.

The allocation process for Buy 3 is designed to keep both rocket families busy through the end of the decade, Arnold said. "That will allow them to be mature by that time, because they will have launched a certain number of each family of vehicle," he said. "Then we'll have open competition after that."