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Air Force Seeks $100 Million for Rocket Rivalry


FARNBOROUGH, England -- The U.S. Air Force’s top civilian said she wants $100 million in funding this year to hold a rocket launch competition earlier than planned.

The move may benefit start-up rocket-maker Space Exploration Technologies Corp., known as SpaceX and headed by billionaire Elon Musk, which recently sued the service in an attempt to break into a military market dominated by a Lockheed Martin Corp.-Boeing Co. joint venture.

The venture, known as the United Launch Alliance LLC, is the government’s sole provider of medium- and heavy-lift launches of military and spy satellites under a program called the Evolved Expendable Launch Vehicle. The Air Force funding transfer is part of a larger request the Pentagon submitted this week to Congress for permission to shift $4.3 billion in the fiscal 2014 defense budget.

“It is meant to be the resources that, if it's approved, would allow us to do a competitive launch earlier on,” Air Force Secretary Deborah Lee James said during a briefing with reporters at the Farnborough International Air Show outside London.

The money would add to the launch manifest another mission, the Defense Meteorological Satellite Program-20, raising the number of liftoffs to six, according to a copy of the budget reprogramming request. The service began the competition on Wednesday with a request for proposals from interested companies, according to a separate release, and plans to award a contract during the next fiscal year.

“This request provides an additional opportunity for EELV new entrants to compete for an EELV mission in FY 2015,” the reprogramming document states.

SpaceX is expected to receive formal certification from the Air Force to launch national-security payloads by the end of the year or early next year, James said at the show. The company last week announced that the service had qualified the third and final Falcon 9 launch necessary for certification.

“They reached an important milestone in the process for certification, but it’s not certification,” she said.

The additional program funding wouldn’t impact the Air Force’s existing contract with the United Launch Alliance to supply through 2017 at least 36 booster cores – the main component of a rocket including the engine, according to the document.

While the Pentagon praised the so-called block buy for helping to lock in prices and curb rising launch costs, SpaceX criticized the agreement, saying it blocked the company from competing for missions to launch GPS satellites and other medium-size spacecraft.

The Hawthorne, California-based firm in April sued the Air Force in the U.S. Court of Federal Claims in Washington, D.C., to challenge the contract. The government earlier this month filed a motion to dismiss the complaint.

“This exclusive deal unnecessarily costs U.S. taxpayers billions of dollars and defers meaningful free competition for years to come,” Musk said in a statement at the time. “We are simply asking that SpaceX and any other qualified domestic launch providers be allowed to compete in the EELV program for any and all missions that they could launch.”

Some lawmakers concerned over the EELV’s estimated price tag of $70 billion through 2030 made similar arguments. Sen. John McCain, a Republican from Arizona, went so far as to describe the multi-year order as “cronyism.”

“This smacks of the cronyism that we saw in the first tanker contract that ended up in a major scandal,” he said during a congressional hearing in April.

McCain was referring to the Air Force’s initial deal with Chicago-based Boeing for a fleet of new refueling aircraft. The agreement was canceled in 2004 amid a scandal involving Boeing’s chief financial officer, Michael Sears, who offered a job to the Air Force’s top procurement official, Darleen Druyun, during negotiations. Both were sentenced to serve jail time.

Frank Kendall, the Pentagon’s top weapons buyer, has defended block buy and described it as the result of “very successful” negotiations with the contractor.

“That contract is at a much better price than we had anticipated in our previous budgeting,” he said during the same hearing. “We saved on the order of $3 billion.”

At a time of rising tensions between the U.S. and Russia over the latter’s invasion and subsequent annexation of Ukraine’s Crimea region, SpaceX’s lawsuit drew attention to the fact that the U.S. military launch program uses the Russian-made RD-180 engine on the Atlas V rocket.

At one point, the judge in the case issued an injunction preventing the government from buying the first-stage engine made by Moscow-based NPO Energomash. The order was lifted after federal agencies certified the payments didn’t violate sanctions against Dmitry Rogozin, the head of Russia’s space sector who was among the Russian officials sanctioned by the White House.

In response, Rogozin threatened to stop supplying the U.S. with the RD-180 engine, though Pentagon and company officials said orders were still being filled.

United Launch Alliance blamed SpaceX for having “created unnecessary distractions, threatened U.S. military satellite operations, and undermined our future relationship with the International Space Station.”

The Pentagon’s reprogramming request would also shift $27 million to develop an American-made alternative to the RD-180 engine. “These efforts will be used to advance cost-effective options with industry to eliminate reliance on foreign manufactured engine,” the document states.

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