IN FOCUS: New competitors step up in EELV market

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 Space X

New commercial ventures have sprung up to offer the USA evolved expendable launch vehicles in competition with Boeing-Lockheed Martin joint venture United Launch Alliance

NASA is widely seen as the arbiter of US space programmes, and in terms of space-based research, interplanetary exploration and other above-board subjects, this view is correct. But its budget pales in comparison to that of the US military, which is far and away the largest of its kind: militaries worldwide spent $32 billion in 2009 on space, according to a report by Euroconsult; that year, the US military spent about a quarter of that on satellite and launcher procurement alone, a figure that does not account for the classified but undoubtedly impressive intelligence procurement budget.

The only vehicles deemed low-risk enough to fly important payloads for either the military or NASA are the evolved expendable launch vehicles (EELV) family, sold only by United Launch Alliance (ULA), a joint venture of aerospace behemoths Boeing and Lockheed Martin. Now the commercial space boom is giving rise to competition. Two companies, SpaceX and ATK, are building launch vehicles capable of carrying heavy payloads into orbit. Both companies are promising to launch for lower prices than ULA, but both are running into stumbling blocks.

The end of the Cold War and triumph of free market capitalism brought a new imperative to the space industry. No longer did the USA have reason to pour seemingly limitless amounts of money into space programmes. It quickly became clear that the unmanned launch industry, for decades reliant on slightly modified ballistic missiles, had to change to stay competitive. After all, the Soviet state excelled at rocketry, and Russia - and Ukraine, to a lesser extent - inherited a mature rocket industrial base. To stay competitive, the USA had to make access to space cheaper.

Developing and maturing the technology necessary to reduce launch costs is in itself an expensive proposition, but the rocket industry holds unique advantages. First, its products are considered strategic assets, and its continued health is therefore a matter of national security. Second, it is geographically widespread. The complex process of building, assembling, testing and launching rockets showers money and attracts high-paying jobs to a wide range of political districts.

Thus was born the EELV competition to update existing launchers with new technology, providing new capabilities without the cost of a new rocket. The US Department of Defense (DoD) made a persuasive case for paying the costs of developing two rockets: the competition would drive costs down, and purchases from a developing commercial market would allow the DoD to take advantage of economies of scale.

The commercial satellite market was squeezed by disruptive technological advances such as cellular phone towers and cheap fibre-optic cables, and largely finished off when the dot-com bubble burst. Boeing and Lockheed became embroiled in industrial espionage lawsuits. "What ended up happening [was] costs were much, much higher than these companies had told the government originally," says Todd Harrison, senior fellow at the Center for Strategic and Budgetary Assessment (CSBA).

"The companies basically said, 'We would lose too much money if we built at the contracted price,' so they had to go back and renegotiate the contract at a much higher price. They did that, and then the companies came back and said, 'Even at the higher negotiated price we still can't do this profitably.'" In 2005, to resolve a bitter legal battle over industrial espionage and make both companies profitable, Boeing and Lockheed agreed to merge into a single entity: ULA. As the only company qualified to launch big payloads, it had a government-sanctioned monopoly.

According to September's Government Accountability Office (GAO) report on EELV acquisition, "though the Federal Trade Commission (FTC) initially opposed the ULA joint venture because of its potential to limit competition in the launch industry, DoD stated the benefits of the joint venture to national security outweighed the loss of competition, and FTC allowed the joint venture to proceed".

In February, established rocket manufacturer ATK said it would team with EADS Astrium to build a new launch vehicle, called the Liberty, using a modified Shuttle booster as the first rocket stage and a Vulcain upper stage from the European Ariane V, marketed squarely and exclusively to the US market. Further, Liberty would have a higher payload capacity than either of the ULA launchers. In April, relative newcomer SpaceX announced plans to develop the Falcon 9 Heavy, projected to carry twice the payload of a Delta IV - and launch for half the price.

DoD has been slow to capitalise on the current commercial space boom. They have much to be cautious about - military and intelligence satellites are, almost without fail, very large and very expensive, and generally deemed crucial to national security. With that burden, the DoD is understandably inclined to use vehicles with the lowest risk - Atlas V and Delta IV are approaching 50 combined launches, with only two partial failures recorded. SpaceX, in contrast, lost their first three launches using a smaller version of Falcon, and ATK's rocket, despite being based on two highly successful launchers, is years away from first flight.

This does not bode badly, however, for either new entrant: SpaceX has conducted four launches without major problems, and is preparing to launch another to the International Space Station. ATK has been building and integrating rockets for decades; few doubt that both companies have the funding, knowledge base and technical capability to build successful competitors.

On 12 October, NASA, the DoD and the National Reconnaissance Office (NRO) signed a memorandum of understanding to jointly develop new entrance criteria (NEC), redefining reliability requirements to ease the burden on new launchers. Each branch must establish its own launch criteria, and there is no set schedule for implementation, but it is a positive step.

"SpaceX has to prove reliability, they have to prove they can deliver at that cost, so we're years away from that," said CSBA's Harrison. "But if we do get to that point, ULA will be under a lot of pressure to improve their cost, and it's not clear that they could do it, that it would be viable for them."

At the same time, in order to get a handle on costs and reinforce a flagging US industrial base, DoD is changing the way they buy rockets, moving from each rocket individually as needed towards a block-buy system. The new system would commit the government to buying between six and ten ULA rockets per each year for up to five years.

As the September GAO report notes, six to ten rockets is likely oversupply - ULA has never launched more than five rockets in a year since its incorporation - and the remainders can be stored for future use. The block buy, if executed as proposed, would end in 2018 and presumably open to competition from there, giving SpaceX and ATK several years to mature their designs and gain flight experience. While ATK has not commented publicly, SpaceX has denounced the block-buy in no uncertain terms.

Observers note that Boeing and Lockheed were fully paid to develop their rockets and guaranteed minimum buys, despite not labouring under significant reliability requirements. SpaceX and ATK, in contrast, are afforded none of those luxuries.