The Evolved Expendable Launch Vehicle (EELV) Program Has More Questions Than Answers

The Evolved Expendable Launch Vehicle (EELV) program was supposed to make space launch vehicles more affordable and reliable.  Unfortunately, EELV program budgets have quadrupled since the Pentagon allowed Boeing and Lockheed to merge their launch business into a single monopoly provider, the United Launch Alliance (ULA), in 2006.   Despite this historic cost increase, on January 27, 2012, the United States Air Force announced its intention to award another $19 billion sole source contract to ULA.  Now, according to an April 17, 2012 article in Aviation Week(note that the article was published on Tax Day), “The Pentagon has declared that the Evolved Expendable Launch Vehicle (EELV) project has exceeded its original projected per-unit cost by 58.4%, triggering a rigorous review under the Nunn-McCurdy program oversight law.” The Air Force’s own fiscal year 2013 budget documents show the gross unit cost for each ULA booster is $420 million.  This cost is at least more than four times higher than every other rocket in the world.

EELV has been under scrutiny for a while.  Last September, the Government Accountability Office (GAO) released a report about concerns with the Air Force’s Evolved Expendable Launch Vehicle (EELV) program. According to a January 31, 2012 Congressional Quarterly (CQ) article, Sen. John McCain (R-Ariz.) also expressed concerns about EELV.  “Arizona Sen. John McCain, ranking Republican on the Armed Services Committee, in a Jan. 27 letter to the Air Force secretary, said the government should develop its own price estimates for the booster cores of the Expendable Evolved Launch Vehicle (EELV) based on certified data provided by the contractor, United Launch Alliance (ULA) and its subcontractors. He added that the Pentagon should use its own analysis — and not the contractor’s — to determine how many booster cores to buy.”

What should be disconcerting to taxpayers (and lovers of common sense) is that the Air Force issued the sole-source request for proposal (RFP), which baselines a procurement of 40 cores for 5 years to ULA on March 23, after the GAO and Sen. McCain criticized this approach. While it may allow the government to buy more or less, all of the certified pricing is based on the 40 core total.  The RFP also maintains the “launch capability” subsidy until 2019 which is the $1B annual cost-plus contract payment to ULA to “maintain” its standing armies—paid whether it launches zero times or ten times. 

Now that the program has triggered Nunn-McCurdy, EELV will get much more scrutiny and the Air Force probably isn’t all that surprised about this.  According to a March, 2011 report by GAO, “The Air Force had a higher proportion of total breaches compared to its proportion of total programs, whereas the Navy had a smaller proportion of breaches compared to its proportion of programs. Aircraft, satellite, and helicopter programs have experienced the largest number of breaches.”

The September 2011 GAO report is a window into what has gone wrong with the program.  “Program officials, recent launch studies, and the prime EELV contractor all cite a diminishing launch industrial base as a risk to the mission success of the program, but DOD analysis supporting this condition is minimal.”  The report also stated that, “The 2010 Launch Broad Area Review—which DOD officials cite as support for the proposed block buy approach—also relied, in part, on the 2009-2010 ULA data and analysis to conclude that the launch industrial base needs stability.  Although the ULA survey of its supplier base covered the appropriate topic areas for such a review—for example, financial stability and production operations—our analysis determined the survey was neither designed nor administered in a manner consistent with sound survey methodology practices, and in some cases, survey results presented to DOD could not be linked back to the survey questions.”

It is inconceivable that the Air Force would move forward on a major, multi-billion dollar, multi-year procurement in a program that has had this much criticism (including multiple GAO reports) and has just been declared to be in critical Nunn-McCurdy Unit Cost Breach.  At the very least, the Air Force should restructure and re-certify the program before moving forward with such a major acquisition.

The future of cost efficient space travel is dependent on common sense and the private sector, not the outdated government model.  A fresh approach is needed and the private sector is providing that new approach.