Launch Service Agreement

Air Force funding three new rockets to compete with SpaceX but only intends to buy launch services from two providers

An artist's concept of Orbital ATK's OmegA rocket in flight.

WASHINGTON —  The immediate reaction to the news on Wednesday — that Blue Origin, Northrop Grumman and United Launch Alliance won over $2 billion in Air Force contracts to develop launch vehicles — was “what about SpaceX?”

The Air Force’s top procurement official Will Roper told reporters that SpaceX is a “key member of our launch team” but would not discuss why the company didn’t get a contract or even if the company bid at all for the Launch Service Agreement awards. SpaceX did not respond to requests for comment.

The LSA program was started in 2015 to nurture domestic launch providers as the Air Force faces a 2022 deadline to stop using the Russian RD-180 engines that power ULA’s Atlas 5 rocket. SpaceX received funding in the initial phase of LSA to develop propulsion technology.

For the current phase of LSA — the actual development of rockets that can be certified to fly national security missions — the Air Force awarded Blue Origin $500 million for the development of the New Glenn rocket, Northrop Grumman $792 million for its OmegA rocket and ULA gets $967 million to develop the Vulcan Centaur rocket.

SpaceX, considered by some to be a shoo-in for an award because it’s already proven its mettle by launching national security payloads, was the odd-man out.

But SpaceX’s exclusion isn’t so odd considering that the current phase of the LSA program is focused on bringing new launchers into service. Falcon 9 has flown more than 60 missions since its 2010 debut and has begun routinely recovering the rocket’s reusable first stage. Falcon Heavy, meanwhile, made its successful debut in February

“SpaceX does not need development money for Falcon 9 or Falcon Heavy,” said Charles Miller, a former NASA adviser and president of the NextGen Space consultancy. SpaceX development efforts are now focused on the Big Falcon Rocket and that is not a vehicle that has much appeal to the Air Force, Miller said.

There is a strong probability that SpaceX was a no-bid because it already has what the Air Force wants, which is a reliable, low-cost rocket, Miller said. The BFR is too big for what the Air Force needs, especially as the military tries to move away from huge satellites to disaggregated constellations, he said. “They want reliable low-cost access to space,” and SpaceX has two vehicles that don’t need to be developed.

The strategy behind LSA is to bring new domestic competitors into the market. The three companies that got development funds are expected to be ready to compete for launch procurement contracts in the next phase of LSA, which the Air Force calls phase 2.

Phase 2 will be an open competition. All the LSA winners have to bid for launch contracts, or return their development funds to the government. SpaceX presumably would bid as well.

An Air Force official who spoke with SpaceNews on Thursday said phase 2 will be a procurement competition for a yet-to-be determined number of missions over five years. Only two suppliers will be selected and they will split the work 60/40.

“Anybody can compete,” he said, but under the agreement with the three LSA winners, “anybody that is not chosen for phase 2 procurement will have their OTA funding terminated.” OTA, or Other Transactions Authority, is a cost-sharing agreement that the Pentagon can use for the development of new systems instead of traditional cost-plus contracts.

“All three are required to pursue phase 2 procurement as part of the arrangement,” the official said. If any of the three LSA winners fails to bid for phase 2, they will have to pay the OTA money back.

“We chose three LSA partners to guarantee that there are three to compete for phase 2,” the Air Force official said. He did not mention SpaceX but insisted that phase 2 would be wide open.

If only two companies are selected for phase 2, what happens to the losers? Can their rocket ventures  survive without the Air Force as a customer?

The Air Force did think of that, but decided that the procurement block buy is best with just two providers sharing the launches, he said. “While we want competition, we also need stability in the launch marketplace.”

National security launches are very complex, he said. “We do a great deal of mission assurance  to ensure we put our missions on a good path for success. Stability is important. Having a well understood partner to work with during that five-year period is important.”

At the end of the five-year phase 2 procurement, the Air Force would reassess the industrial base and decide if there is sustainable competition for phase 3.

The Air Force is working on a draft solicitation for phase 2 that could be released later this year or early in 2019.

Miller speculated that the Air Force would have to pick ULA or SpaceX in phase 2 because they are the only two with a track record in national security launches.

The calculus would be that if Blue Origin does not win phase 2, its billionaire owner Jeff Bezos would continue to develop the rocket at his own expense and keep the market competitive.

Similarly, Northrop Grumman could keep OmegA alive even if it does not win phase 2 by drawing on funds from other government programs.

“If I were the Air Force, I would want Bezos in the background putting competitive pressure on the two companies I did select,” said Miller.

It seems unlikely that the Air Force would pick Blue Origin and SpaceX in phase 2 because that would effectively put ULA out of business, he said. “You pick ULA because you know they won’t be around if you don’t pick them.” ULA is a joint venture of Boeing and Lockheed Martin established to serve the government launch market.

Mike Laidley, vice president of the OmegA program at Northrop Grumman, told SpaceNews that the company expects to fly the rocket in 2021 and will be ready to compete for phase 2.

“We’re going to be hiring a lot of new people at all of our facilities,” Laidley said.

Northrop Grumman’s strength is that it’s a “stable supplier that can handle fluctuating demands that are pretty typical in the space industry,” Laidley said. The $792 million OTA contract will help accelerate development and certification, he said. All three companies have to meet pre-established milestones in order to get the funds.

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Air Force awards launch vehicle development contracts to Blue Origin, Northrop Grumman, ULA

SpaceX, ULA, Blue Origin and Northrop Grumman Innovation Systems were among the contenders for U.S. Air Force Launch Service Agreement contracts. Credit: SpaceNews graphic

WASHINGTON — The U.S. Air Force announced on Wednesday it is awarding three contracts collectively worth about $2 billion to Blue Origin, Northrop Grumman Innovation Systems and United Launch Alliance to develop launch system prototypes.

The funding is for the development of competing launch system prototypes geared toward launching national security payloads. Each company will receive an initial award of $181 million.

The Launch Service Agreements are for the development of Blue Origin’s New Glenn, Northrop Grumman’s Omega and ULA’s Vulcan Centaur rockets. The awards are part of cost-sharing arrangements — known as Other Transaction Agreements — that the Air Force is signing with the three companies to ensure it has multiple competitors. The Air Force has committed a total of $500 million in OTA funds for Blue Origin, $792 million for Northrop Grumman and $967 million for ULA. SpaceX previously received an LSA award but did not make the cut this time.

The Launch Service Agreements will “facilitate the development of three domestic launch system prototypes and enable the future competitive selection of two national security space launch service providers for future procurements,” the Air Force said in a news release.

“Our launch program is a great example of how we are fielding tomorrow’s Air Force faster and smarter,” said Secretary of the Air Force Heather Wilson. “We’re making the most of the authorities Congress gave us and we will no longer be reliant on the Russian-built RD-180 rocket engine.”

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Northrop Grumman confident Air Force will continue to fund the company’s new rocket

Northrop Grumman Completes First Live Motor Cast for OmegA Rocket_1

WASHINGTON — The U.S. Air Force said it will soon reveal which suppliers it selected to develop space vehicles for future national security launches.

Rocket manufacturers Northrop Grumman Innovation Systems, SpaceX, and United Launch Alliance, along with engine supplier Aerojet Rocketdyne, received an initial round of research and development contracts. They are hoping to be chosen for the next round of awards for what the Air Force calls “Launch Service Agreements.” A new player said to be in the mix is Jeff Bezos’ Blue Origin.

Analysts see SpaceX and ULA as the front runners, while there is continued speculation about the future of Northrop Grumman’s newly designed Omega vehicle.

Mike Laidley, vice president of the Omega program at Northrop Grumman, told SpaceNews that the company believes it has a strong chance to win another LSA contract.

The solid-propulsion Omega was designed by Orbital ATK before it was acquired by Northrop Grumman. The company unveiled the rocket in April at the National Space Symposium just a few months after the acquisition of Orbital ATK was announced.

“We’ve been working for about three years under an Air Force OTA award to develop a solid propulsion replacement for the RD-180,” said Laidley.

OTAs, or “other transaction agreements,” are cost sharing deals where the government and the contractor pick up some portion of the development costs. One reason the Air Force started the LSA program was to ensure it has domestic launch providers to replace ULA’s Atlas 5 rocket that is powered by the Russian RD-180 engine. Congress passed a law that requires the Air Force to stop using that engine by 2022.

The first Omega model will be an intermediate-class rocket, to be followed by a heavy version. The intermediate version will fly payloads that currently use the Atlas 5 or SpaceX’s Falcon 9.

Collectively Northrop Grumman and the Air Force have invested more than $200 million in the new launch vehicle between 2015 and 2017. Laidley said that for competitive reasons he could not disclose what share of that amount the company picked up. “Our belief is that we’ll extend the OTA for another period, through 2024, to cover the certification of the intermediate and the heavy class launch system for Omega.”

The company has been in negotiations with the Air Fore Space and Missile Systems Center for several months, he said. “We think we’re pretty close.”

If the Air Force selects Omega for another OTA award, “it will take us through the certification of intermediate and heavy vehicles,” said Laidley.

The first flight of the intermediate size vehicle is planned in 2021. The Air Force said it would certify Omega for military launches after two successful flights. “We are looking for customers for those two certification flights in 2021,” he said. “At the conclusion of those two flights we’ll be certified and ready to fly government payloads in 2022.”

Whoever signs up for one of these two certification flights, will get a ride “at a reduced rate,” Laidley said.

In a solid rocket, the propellants are mixed together and packed into a solid cylinder. Northrop Grumman would be the only solid-propulsion competitor in the Air Force LSA program. It’s the same solid propulsion that was used by NASA’s space shuttle. The newer generation of vehicles use liquid propulsion.

“We can produce solid rocket motors that can provide rides that are every bit as sensitive to the needs of top government payloads as a liquid launch system,” said Laidley. “We are doing things to minimize vibration.”  Some of the payloads the government flies are “every bit as sensitive to environmental concerns as telecom satellites,” he said. “We believe we can be competitive across both markets.”

The company designed a segmented rocket motor that will form the first and second stage for the Omega intermediate vehicle. In parallel is it working on a vehicle design that includes two solid first stages along with a cryogenic third stage based on the RL-10 engine from Aerojet Rocketdyne. “We just completed a preliminary design review with the Air Force,” he said. The third stage is scheduled to begin tests in 2020.

The Omega boosters are called “common booster segments” The two-segment first stage is scheduled for a static fire test in April 2019.

The company is making the case to the Air Force that investing in Omega benefits the U.S. government  because the solid rocket motors are being used in several programs that will be in production over the next 10 years, including NASA’s future launch vehicle and the Air Force’s next-generation intercontinental ballistic missile. “Omega adds to the absorption of those fixed costs,” said Laidley, “And we can reduce costs for other government users.”

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Orbital ATK selects Aerojet Rocketdyne’s RL10C for newly christened OmegA rocket

OmegA, the rocket formerly known as Next Generation Launch system, is Orbital ATK’s answer to intermediate and heavy-lift launchers in the works at ULA, SpaceX and Blue Origin. Credit: Orbital ATK

COLORADO SPRINGS — Orbital ATK on Monday revealed new details about the rocket it has been developing over the last three years in an effort to take U.S. Air Force launch contracts away from United Launch Alliance and SpaceX.

With the Air Force expected to select up to three companies this summer to build and test rockets capable of launching intermediate to heavy-class national security payloads, Orbital ATK executives announced at the 34th Space Symposium here that they have picked Aerojet Rocketdyne’s RL10C engine to power the upper stage of a next-generation launch vehicle they are now calling OmegA.

OmegA’s solid-fuel lower stages, as previously disclosed, are based on space shuttle solid rocket motor segments developed by Orbital ATK, and solid strap-on boosters used on ULA’s rockets.

OmegA was developed under a three-year, $250 million cost-sharing partnership with the Air Force. At a news conference, Orbital ATK spokesman Barron Beneski said OmegA is the “number one priority for growth initiatives in the company, and is projected to be the largest discretionary spending item in the company over the next couple of years.”

Orbital ATK intends to use variants of the OmegA rocket to launch intermediate to heavy-class payloads for U.S. national security customers. Credit: Orbital ATKOrbital ATK intends to use variants of the OmegA rocket to launch intermediate to heavy-class payloads for U.S. national security customers. Credit: Orbital ATK

The new rocket will compete against SpaceX, ULA and Blue Origin for further development contracts the Air Force plans to award under its Launch Services Agreement (LSA) program this summer. Before naming the rocket OmegA, the company had been using the name “next generation launch system” as a placeholder, said Scott Lehr, president of Orbital ATK’s Flight Systems Group.

OmegA is on a path to complete propulsion system ground tests in 2019 and conduct its first launch in 2021.

Orbital ATK chose the existing RL10C for the upper stage rather than gamble on a new development. “It has an extensive flight history and provides a low-risk affordable engine,” said Mike Pinkston, deputy general manager of Orbital ATK’s launch vehicles division.

The RL10C is currently used by ULA  to power the Centaur upper stage used on its Atlas 5 and Delta 4 rockets.

OmegA features solid rocket motors for the lower stages and an Aerojet Rocketdyne RL10C for the upper stage. Credit: Orbital ATKOmegA features solid rocket motors for the lower stages and an Aerojet Rocketdyne RL10C for the upper stage. Credit: Orbital ATK

As recently as a year ago, Orbital ATK  planned to use a vacuum-optimized of Blue Origin’s BE-3 engine that the Jeff Bezos-owned company is currently flying on its New Shepard suborbital vehicle.

Both the BE-3U and a variant of Aerojet Rocketdyne’s RL10 are in the running for Vulcan, the next-gen rocket ULA is using to go after the same pot of Air Force LSA money as Blue Origin, Orbital ATK and SpaceX. Orbital ATK provides solid rocket motors for Vulcan. Lehr said the manufacturing of solid rocket motors for Vulcan will be “firewalled” from the OmegA program.

The next phase of the OmegA program will begin after the Air Force makes the next round of LSA awards in July. That would allow for further development and verification of the vehicle and its launch sites.

Orbital ATK officials said that after initial flights of its intermediate configuration in 2021, OmegA will be Air Force certified for operational missions starting in 2022, with initial heavy configuration flights beginning in 2024.

About 500 employees currently are working on OmegA, the company said, and the number is expected to grow to 1,000 over the next 18 months.

Pinkston said Orbital ATK expects OmegA to be cost-competitive in both the EELV and commercial markets, but said he could not provide any price estimates yet. The company is in search of customers. “We have some ‘letters of intent’ in hand for payloads,” he said. With Orbital ATK being a major satellite manufacturer, the plan is to offer “our own sallites in our own rockets for an attractive price.”

After machining an Omega first-stage case, Orbital ATK technicians install fasteners into the forward attach ring. Credit: Orbital ATKAfter machining an Omega first-stage case, Orbital ATK technicians install fasteners into the forward attach ring. Credit: Orbital ATK

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