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Testimony of Michael C. Gass, Hearing on National Security Space Launch Programs

Status Report From: Senate Appropriations Committee
Posted: Wednesday, March 5, 2014

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 Embargo until 10am March 5  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 the that 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. 

 

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