It’s time to split United Launch Alliance.

Prior to the Evolved Expendable Launch Vehicle (EELV) program, the U.S. government had developed three primary expendable launch vehicles to meet its space launch needs. Delta, Atlas and Titan were non-complementary launchers that corresponded to being able to launch small, medium and large payloads. Failure of one of the launchers would lead to massive backlogs in the category of spacecraft that vehicle was designed to launch. Costs were high, and the 1,000-day Titan launch campaign weighed on people’s minds and careers like a $500 hammer. Attempts were made to develop first an “Advanced Launch System” and then, when that didn’t go anywhere, a “National Launch System.” The final attempt, which eventually succeeded in making it to fruition, was the EELV program.

EELV, notwithstanding typical early program evolution, quickly settled on a seductively simple idea. The U.S. government would identify five or six reference missions, and from that it would develop a reference “payload integration interface” along with the numbers defining a reference launch environment. Payloads would then be designed for this common envelope. Reference missions would be serviced by a “medium” and a “heavy” booster, and a promising commercial market would force market discipline and competition. The Air Force provided money in support, and contracts were awarded based on promises of 50 percent corporate investment. Rather than bearing the cost of a launcher’s total industrial ecology as it had in the past, the EELV approach would allow the Air Force to procure launch as a service.

Air Force procurement ultimately chose Boeing’s Delta 4 family of launchers to launch the majority of U.S. government payloads. Lockheed Martin’s Atlas 5 was awarded a much smaller share, but still enough to prevent that company from exiting the market.

Boeing, which won the lion’s share of work, had high costs for its Delta 4 vehicle. On the other hand, Lockheed appears to have taken a different direction on its Atlas 5 booster. Lockheed chose the RD-180, a Russian hydrocarbon engine that was dirt cheap by U.S. standards and required significantly less total investment than spooling up the astronomically expensive multiyear development of a new large American hydrocarbon engine. Lockheed avoided many additional costs, i.e. it never put the money into getting a domestic RD-180 production line running; it never built the triple core Atlas 5; and it never put its heavy Atlas 551 capability into Vandenberg Air Force Base, California.

It soon came to light that Boeing and Air Force officials had broken the law and the contract awards became subject to litigation. Meanwhile, the promised commercial market collapsed with the dot-com bubble, and both Atlas and Delta became less viable as commercial launchers. Eventually, people went to jail and Boeing was penalized, leaving the U.S. government with the task of having to find a solution that would be seen to be not only just to Lockheed Martin but also in the best interest of the U.S. taxpayer and still meet the U.S. government’s need for reliability and second-source launch.

The solution chosen was simple, seemingly equitable, and costly. The U.S. government forced Boeing and Lockheed Martin to be joined together as Siamese twins, creating ULA, ostensibly to reduce overhead and recurring costs and to ultimately end any litigation while equitably sharing profits from all launches. The Department of Defense approved the merger — despite warnings from the Federal Trade Commission and various space stakeholders.

Some 15 years after the first EELV awards, a new player has entered the low end of the EELV market. SpaceX is seeking U.S. government launches (and dollars) in direct competition with ULA. Meanwhile, ULA has been forced to confront both the uncompetitive costs of its Delta 4 and the political situation with Russia that has caused the U.S. government to change policy and outlaw the use of RD-180 for future national security missions.

ULA has reacted like any incumbent. It has sought to minimize capital expenditures and fought to maintain market monopoly in DoD and to maintain the current political and economic situation. Instead of turning its prodigious corporate potential to make Delta 4 more cost-competitive and to re-engine Atlas 5 as a totally American vehicle, ULA is threatening to eliminate the Delta 4 Medium while continuing to offer the Delta 4 Heavy, an expensive product with a high cost structure and low profit margins, while otherwise fighting to retain the status quo. Oh, and also offering the Atlas 5 as a lower-cost product with good operational characteristics while promising the Vulcan in the future.

Because ULA is a stepchild of Boeing and Lockheed, neither parent is anxious to invest in or sell equity in ULA to any third party or parties. ULA’s bylaws most likely require that both parents agree to any equity sale (especially given the intellectual property involved), but neither wants third parties to know its trade secrets, especially costs. Bank loans are problematic because the business is uncertain and the assets difficult to value. Debt markets won’t give ULA the time of day.

U.S. government policy is to get ULA to make the fastest conversion of the Atlas 5 it can, moving from a Russian engine to an American engine or engines, but it appears ULA may desire a slower path to any next phase.

ULA was created by DoD and reviewed by the Federal Trade Commission. It is time to use DoD’s inherent national security authority along with the commission’s market authority to order a division of ULA. The two programs could either rejoin their parent companies (Boeing and Lockheed Martin) or form into separate independent companies.

The individual companies offering Delta and Atlas would have radically different strategies and interests than those of the combined ULA.

The Delta company would want to try and pick up launches even if their cost structure is higher, but it could maintain capability using a cost-reimbursable contract and provide Delta 4 Medium to the U.S. Air Force as well as invest in cost-reduction approaches to increase competitiveness.

The Atlas company would have an incentive to invest in re-engining by arguing to its parent that there is a market and business case, or it could be spun off by its parent.

Independent Atlas and Delta companies could conduct leveraged buyouts or equity sales to compete in the market. It seems more likely there is a business case for Atlas 5 to re-engine at $200 million (plus the cost of a new engine) than there is for ULA to build the Vulcan launcher, which could cost $2 billion or more (including a new engine). There may be a business case for an outside investor such as a supplier to purchase Atlas or Delta where the business case may not exist to purchase both.

Each firm would know its former sibling’s cost structures, but as Atlas is re-engined its cost structure will change, Delta will invest in cost savings, and future competition will not be between the two companies as much as from International Launch Services and SpaceX.

The ULA merger has failed to generate any of its promised benefits or economies. Its failure only reinforces what the Space Access Society’s Henry Vanderbilt has said: Keeping multiple, redundant capabilities to fly national priority missions should be the express policy of the U.S. government. Let the Air Force allow SpaceX, the Atlas company and the Delta company compete on quality, cost and schedule.

It’s time to terminate a failed experiment. Let us see if a new pair of internationally competitive ventures can be recreated — by looking to Solomon and splitting the conjoined twins.

Tim Kyger is a former staffer in both the U.S. House and Senate, including a stint on the professional staff of the Senate Commerce Committee’s science, technology and space subcommittee. He has 27 years of experience in the policy community.