USAF Could End ULA Launch Capability Contract Early

ULA_logoSome more potentially bad news for United Launch Alliance (ULA): the U.S. Air Force is considering ending its $800-million-a-year launch capability contract prior to its expiration in 2019 after the company’s decision not to bid on an launch contract.

Air Force Secretary Deborah Lee James, testifying Wednesday at a Senate Armed Services Committee hearing on military space launch, said she has directed staff to study the implications of ending the EELV Launch Capability contract early.

The Air Force buys ULA rocket hardware through a fixed-price EELV Launch Services contract but funds ULA’s launch infrastructure and engineering support through the cost-plus EELV Launch Capability contract that competitor SpaceX considers an unfair subsidy….

During Wednesday’s hearing, [Sen. John] McCain called ULA’s EELV Launch Capabilitity contract “$800 million to do nothing.” ULA disputes that characterization. On its website, ULA says the contract is not a subsidy since it “pays for very well-defined national security space requirements that allow the Air Force to launch exactly when and where it needs to launch.”

In her testimony, James said the contract currently is scheduled to end in 2019 after ULA carries out the final launch covered under an $11 billion sole-source block buy agreement with the Air Force. That deal, which predates the 2006 creation of ULA, covers the production of 36 Atlas 5 and Delta 4 rocket cores plus launch costs for a total of 78 missions.

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