The process the Air Force uses to contract rocket launches of military satellites and other national-security missions lacks critical insight into the operations of commercial launch providers, according to a new report by the Government Accountability Office.

The government’s watchdog office recommends the Air Force take a slower, incremental approach to awarding the next round of Evolved Expendable Launch Vehicle, or EELV, contracts.

“Planning for acquisitions on a short-term basis will help ensure that the Air Force does not commit itself to a strategy until the appropriate amount of data is available to make an informed decision, and will allow for flexibility in responding to a changing launch industry,” the report reads.

The Air Force this year opened EELV contracts to commercial competition after SpaceX sued, claiming the Air Force should have allowed competition for the $9.5 billion, 36-launch vehicle contract it awarded to Centennial-based United Launch Alliance.

An out-of-court settlement in January resulted in the Air Force opening 14 of those launches for bid under a fixed-price commercial contract, similar to the process NASA uses.

On May 28, SpaceX received Air Force certification for its Falcon 9 rocket system, allowing it to bid for the work and undoing the monopoly ULA held for about a decade.

The fixed-price system has benefits for the Air Force: The onus for controlling costs is placed on the contractor and increased competition likely will bring down overall costs



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“With its latest report, GAO correctly notes that competition provides a number of potential benefits to the government and the taxpayer. We agree,” a SpaceX spokesman said Thursday. “SpaceX looks forward to participating in a fair and open competition and demonstrating these benefits relative to a sole-source, monopoly environment.”

However, the strategy also eliminates data-gathering systems implemented after a scathing 2011 GAO report took the Air Force and ULA to task for lack of program oversight, which could result in missteps costing taxpayers millions of dollars.

Those systems also provide data necessary for the Air Force to make informed contract decisions, said Loren Thompson, aerospace analyst with the Washington, D.C.-based think tank Lexington Institute.

“(The Department of Defense) will no longer have much insight into problems that arise on the rockets. The new system doesn’t give you as much transparency,” Thompson said. “This is all happening because the government wants to get satellites into space for less money. Unfortunately, experience suggests that in the space business, you get what you pay for.”

SpaceX’s first launch following its certification ended in catastrophe. A June 28 Falcon 9 supply mission carrying supplies and science to the International Space Station exploded about 2½ minutes into launch.

Although SpaceX is investigating the mishap with FAA oversight, the GAO says the accident is a prime example of why more information is needed about the operations of companies providing launch services.

“Mission assurance is important in light of this mishap,” GAO spokeswoman Christina Chaplain said. “We’ve enjoyed a long string of successes in launches and can’t be overly consumed with mission assurance, but we also want to make sure we don’t lose important insight and activities.”

The Air Force, expected to award the next of the 14 EELV contracts later this year, should use knowledge gained from scrutinizing those launches to guide its “Phase 2” EELV bids, expected to open in 2018, the GAO says.

The Air Force says it agrees, pledging in a July 24 letter to the GAO to “review and analyze all data available as it moves forward.”

But Thompson is still worried.

“So the question is, whether in that sort of environment, the Air Force will still have the same amount of insight into potential problems in the launch vehicle that it has previously required,” Thompson said.

The GAO has no power to enforce the report, which was called for by Congress in the fiscal year 2015 National Defense Authorization Act

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However, it will be reviewed by Congress and potentially used to drive policy.

Laura Keeney: 303-954-1337, lkeeney@denverpost.com or twitter.com/LauraKeeney