PDF of Testimony for Download

Testimony of
Mr. Michael C. Gass
Chief Executive Officer
United Launch Alliance, LLC
Subcommittee on Defense
Committee on Appropriations
United States Senate


Chairman Durbin, Ranking Member Cochran and Members of the Subcommittee,
thank you for the opportunity to appear today to discuss the Evolved Expendable
Launch Vehicle (EELV) program and the future of space launch.

On behalf of the men and women of United Launch Alliance and the entire EELV
supplier team, we are honored to be entrusted with the responsibility of safely
delivering critical national security satellites to orbit. These satellites provide
capabilities vital to nearly every aspect of U.S. national security. ULA also supports
customers outside of national security. For NASA, we have launched science missions
to the Moon, Mercury, Jupiter, and Pluto, and even sent the rovers on their way to
Mars. Our customers extend beyond government to the commercial sector with nine
commercial missions to date and several more on the manifest.

I am pleased to report that ULA and the government team have consistently delivered
100 percent mission success over 68 launches since the inception of the program. We
are currently at a tempo of about one launch every month. ULA’s Atlas V and Delta IV
rockets are the most powerful and most reliable in the world. They are the only rockets
that fully meet the unique and specialized needs of the national security community.
The Air Force EELV program was competed in the late 1990’s with a unique
acquisition strategy that required significant upfront investment by industry. Lockheed
Martin’s Atlas and Boeing Company’s Delta products were the winners. Over the past
17 years the program has continued to deliver. Meeting the needs of our nation
effectively and efficiently – delivering capabilities on time, on budget and while
delivering on all of the programs original requirements.

Looking forward, the EELV program is entering a new era. The Air Force’s new
acquisition strategy aims to maintain reliability and stabilize the industrial base, while
reducing costs and introducing competition. We welcome the new strategy, as the
previous approach of buying rockets one-at-a-time was highly inefficient and costly.

The Air Force implemented the first phase of the new strategy with a block-buy
commitment which will save several billions of dollars over the next five years. The
block-buy created efficiency through economies of scale, eliminated repetitive
administrative contracting actions, and provided stability and predictability that enabled
informed investment decisions on product and process improvements that were
incorporated into our pricing.

The next phase of the Air Force strategy is to introduce competition. I believe there are
substantive questions about how EELV competitions will be structured to ensure the
competition is fair and open and whether it will actually deliver savings to our nation.
Ultimately, the central question is whether savings from competition will be sufficient to
offset the cost of duplicating existing capabilities. ULA was formed to enable assured
access to space with two separate launch systems, with recognition that the market
demand was insufficient to sustain two competitors. We went from two competing
teams with redundant and underutilized infrastructure to one team that has delivered
the expected savings of this consolidation.

Looking to the future, we are investing in new technology and concepts to make our
products better and more affordable. We are investing internal funds to develop a
capability to launch two GPS satellites at a time which will cut launch costs almost in
half. ULA, along with our government customers, is reviewing every requirement and
every process to eliminate any unnecessary or inefficient elements.

ULA is also aggressively expanding its customer base, both at NASA and in the
commercial sector with additional launches because improved utilization of the fixed
infrastructure improves the cost for all customers. ULA and our industry partners are
going to work closely with NASA’s SLS, and other DoD programs to find opportunities
to improve product designs and utilize industrial base infrastructure more efficiently to
lower the cost for all programs.

On a more personal note, I have been in this business for 35 years. I have worked
with the government in every imaginable approach to buying launch services, from
traditional DoD contracting approaches to commercial approaches; from buying rockets
in blocks to buying them individually. I’ve also worked extensively in the international
and commercial sectors. I was there in the 1990s when the commercial demand for
launch was projected to be dozens of launches per year, only to have the projected
commercial demand evaporate overnight. I believe leveraging the demand from the
commercial sector is smart, but relying on commercial demand to enable national
security carries huge risks, both to the rocket supplier and to its government
customers.

I’ve also experienced some of the launch industry’s darkest days, such as in the late
1990s when the U.S. suffered a series of six major launch failures over a 10-month
period. These included three consecutive Titan IV failures and the loss of some of the
nation’s most critical systems. Those losses totaled many billions of dollars and were a
harsh reminder that launch is risky and extremely unforgiving. It’s difficult to
overemphasize the depth of the loss to national security those failures caused.

I believe the impressive successes we’ve achieved on EELV stem from the difficult
lessons-learned from the 1990s. These lessons include sustaining a laser focus on
technical rigor, the importance of an open and transparent relationship with our
government customers, and acquisition strategies that align with our customers’
priorities.

In summary, I believe the EELV program has been a major success for the nation. We
will continue to provide the assured access the nation needs to deliver critical
capabilities to orbit reliably and on-schedule. We look forward to working with our
government customers and stakeholders to significantly drive down cost further while
maintaining reliability and readiness.

Thank you for the opportunity to appear before you today. I will be honored to answer
your questions.