The Pentagon announced Friday that it would not grant the United Launch Alliance a waiver allowing it to bypass a congressional ban on Russian-made engines that the company has said it desperately needs to compete in the multibillion-dollar national security launch market.
ULA, the joint venture between Lockheed Martin and Boeing that had a monopoly on national security satellite launches for a decade, had pleaded with the Pentagon for a waiver that would allow it to use more RD-180 engines to power its Atlas V rocket.
The company has four of the engines in its inventory that it could use for national security launches, ULA chief executive Tory Bruno recently told reporters. But he said ULA needs at least 14 to compete to launch national security payloads, such as spy and communications satellites, before it is able to use a new, American-made engine it is developing with Jeff Bezos's Blue Origin. (Bezos owns The Washington Post.)
For the first time in years, ULA has to compete for that work after SpaceX, the space company founded by billionaire entrepreneur Elon Musk, recently was certified by the Pentagon to compete for those contracts. But the competition comes after Congress banned the use of Russian-made engines in response to the escalating tensions with Russia.
The limited supply of RD-180s has put ULA in a precarious position, and Bruno and others have said that it could lead to an unintended consequence: leaving the Pentagon yet again with a single launch provider — this time SpaceX, the only other company certified to launch military payloads into space.
In a statement Friday afternoon, Lt. Cmdr. Courtney Hillson, a Pentagon spokesperson, said that the Defense Department realizes that it "cannot be in the risky position of relying on only one source of space launch for critical national security satellites that must be launched reliably and on schedule."
But she said that Pentagon officials had determined that no "immediate action is required to address the future risk of having only one source of space launch services."
She said the Defense Department would continue to evaluate the need for a waiver, and said that to maintain two viable launch providers, it might consider awarding some contracts on a sole-source basis, meaning ULA could still stay in the game without fear of competition.
A ULA spokesperson declined to comment.
SpaceX, which has won contracts to ferry cargo and eventually astronauts to the International Space Station, pushed hard for the right to compete against ULA for the lucrative Pentagon launches. It even sued the Air Force, in a case that was eventually settled, and then pressed the Pentagon to certify it.
That happened over the summer. Now SpaceX plans to bid against ULA in the first competitive national security launch in a decade to launch a GPS III satellite.
Bids are due next month, and the contract is expected to be awarded in March.