The U.S. Air Force is on the cusp of an unplanned and, until recently, undesired procurement of a new generation of rocket systems that are needed to maintain superiority in space for decades to come—to the tune of billions of dollars.  

This procurement comes as the launch market is in the throes of a major shift. Legacy providers are working to shed a business model that is heavily dependent on the government’s coffers. And new entrants—such as SpaceX and Blue Origin—appear to respond more nimbly to market demands, thanks to an influx of private investment.

This begs the question: Is USAF—at times sensitive about its a slow recovery from a decade of procurement foul-ups—equipped to navigate the uncharted territory ahead in acquiring new Evolved Expendable Launch Vehicles (EELV)? 

The upcoming competition for new EELVs is particularly thorny because it introduces a number of complicated variables. Chief among them is the incorporation of so-called public-private partnerships to develop new rockets and engines using a combination of private and government funding. This is uncharted territory for the Air Force. The original EELV competition called for USAF to provide $500 million a piece to Boeing and Lockheed for development work, with the contractors picking up the rest of the tab, but a collapse in the satellite communications market forced the Air Force to shoulder more of the burden than planned.

Also, the service must be able to certify these new rockets and propulsion systems; certification proved complex for the SpaceX Falcon 9, which is expected to be cleared next month after two years of work to validate the design and processes supporting it.

So a key question for the pending buy is how to equitably weigh funding requirements of various bidders against risk and performance plans. Furthermore, the end state is for the government to procure launch services from two suppliers, each one capable of delivering launch services across the spectrum of size and weight requirements. The final outcome will be a workshare assignment.

Any of these bid factors could be a lightning rod for a bid protest; taken as a whole, the Air Force is potentially walking into a snake pit.

The competition was foisted onto the service by Congress. Overall, the Air Force was pleased with the United Launch Alliance (ULA) monopoly because of its near-flawless mission success, even though the cost was high. But political tensions bubbled over last year when Moscow annexed Crimea, prompting lawmakers to begin limiting access to the number of Russian RD-180 engines available for use by the workhorse ULA Atlas V. With CEO Tory Bruno pushing to retire the intermediate (and very costly) Delta IV as soon as possible, there is a potential gap in launch services on the horizon—and no Congressional allowance to buy more RD-180s. Congress wants a competition fast, and the Air Force plans to issue awards for launch services starting as early as fiscal 2018-22.

ULA plans to propose a new Vulcan rocket, ideally with the completely privately funded and so far unproven Blue Origin BE-4 methane-fueled engine. But Aerojet Rocketdyne, the company’s second choice, is lobbying hard for as much government funding as possible to continue work on its AR-1, also unproven, for the Vulcan.

Meanwhile, SpaceX continues to work on its Falcon 9 and Falcon Heavy, relying largely on private funds and internal development work on propulsion systems.

So a key question will be how the Air Force can objectively judge procurement bids that all have vastly different levels of risk and disparate public-private funding requirements. And if Aerojet Rocketdyne gets its way, that company will require direct management of a propulsion system, whereas the Air Force hopes to simply manage procurement of entire rocket services, not directly oversee engine work. “The level playing field is defined by Congress as ‘full and open competition’ in line four of [section] 1604 [of the fiscal 2015 National Defense Authorization Act],” Gen. John Hyten, head of Air Force Space Command, told reporters on April 28 at a Defense Writers’ Group breakfast in Washington. That “doesn’t mean that everybody has to have public-private partnerships but it has to be available for everyone,” he said.

This environment seems dizzying, even compared to the Air Force’s decade-long, problem-ridden path to select a KC-135 refueler replacement. The Air Force’s battered procurement core—stung not only by myriad problems with the tanker buy but also by missteps in the combat search-and-rescue helicopter selection, as well as an earlier scandal involving a former senior procurement official admitting to favoritism to Boeing—may not be up to the task. 

The scars of that scandal are still fresh in the service’s acquisition corps. Former senior Air Force procurement official Darleen Druyun admitted to favoring Boeing’s bids for a variety of programs and eventually was hired there as a vice president. She and Boeing’s former CFO Michael Sears were found guilty of illegal job talks and served jail time for their malfeasance.

“Right now it is impossible [to predict how the program will proceed because] there are so many combinations of possibilities. It’s not just liquids, it’s not just hydrocarbons,” Hyten said, underscoring that the program must allow for work in solids and liquids for propulsion. “I have no idea of the mix or who the players will be.”

Against this backdrop, the Air Force has taken its first step toward the new EELV program; it issued a draft request for proposals on April 24 requesting information from industry on how to proceed with shared investment and developing prototypes for a future rocket propulsion systems that will facilitate launches for the next decade. Feedback is due May 11, according to Capt. Chris Hoyler, an Air Force spokesman. 

Based on industry’s responses, the Air Force intends to move forward with funding development activities among bidders using $150-160 million of the $220 million earmarked in fiscal 2015 from Congress for the then-notional program.  

The Air Force will “screen” the developers plans. “Providers that demonstrate a sound plan will be asked to submit full proposals that will be evaluated for launch systems integration plan, technical approach, business case, company financial health and investment cost information,” Hoyler says. Ultimately, the Air Force will select a portfolio of up to four agreements in this phase of the program. Fixed milestone payments will be made at the completion of key tasks, Hoyler says.  

The Air Force defines “prototypes” as “physical or virtual model(s) used to evaluate the technical or manufacturing feasibility and EELV utility” of systems.

“My biggest fear is actually not having too many [options] and figuring out what the right mix is. “My fear is what happens if there’s only one?” Hyten asked, noting that a failure is inevitable at some point. “And then how do you maintain the competition and go into the future?” At issue here is when the government selects two providers, in the end—if a failure occurs during a mission—that system will be required to stand down from EELV work pending an investigation. Hyten asked how a company would survive financially in such a scenario, even if some commercial work continues. 

National policy calls for keeping two providers viable, but the government hopes to avoid funding a company during a standdown. This could point to a need for private insurance as a guarantee to keep both providers healthy during a crisis. As an example, the Delta IV was hampered by an RL10 upper-stage anomaly in an October 2012 mission. Due to the investigation, it did not fly for seven months. And in that mission, the anomaly did not deter the launcher from delivering the satellite into orbit.

This draft RFP is kicking off what the Air Force refers to as “Phase 2” of a four-phase EELV strategy. Phase 1 is already underway, with roughly $50 million being invested in risk-reduction projects. Phase 2 will focus on the prototypes. The third phase will involve “entering into agreement with launch-system providers to deliver a domestically powered launch capability.” Finally, Phase 4 will include the actual launch services awards for launches in fiscal 2020-24.

If the public rollout of the draft RFP is any sign, the road ahead could be tough. Service officials took days to respond to the media about the path ahead; the military services typically employ a public affairs strategy to quickly spread the word about major program procurement milestones.

Lt. Gen. Sam Greaves, who heads the Space and Missile Systems Center, will oversee the work. His office provided responses to questions on the path ahead, but he declines interview requests.