Congress' top watchdog wants the Air Force to proceed slowly while transitioning to greater competition in space operations, warning that the service could lose access to the cost and performance data it's relying on now.
The Air Force is seeking to move to a competitive private sector with multiple companies vying for government launch contracts, but the Government Accountability Office is concerned that the current private sector market might not support a switch, and that it could leave military leaders without access to important data for oversight and planning.
"The Air Force intends to introduce competition for certain launches, treat these launches as a commercial item procurement, and award firm-fixed-price contracts for the launches," the GAO said in a report released Wednesday.
"The Air Force intends to rely on what it believes will be adequate price competition to ensure prices are fair and reasonable," the report continued. "As a result, the Air Force will have significantly less insight into program costs and performance than what it has under the current contract."
Currently, the Air Force has an agreement with United Launch Alliance to supply launch capabilities to get government satellites and hardware into space under the Evolved Expendable Launch Vehicle program, or EELV. Defined as a "cost-reimbursement contract for a non-commercial item," it allows the government to have broad oversight of ULA and access to the organization's cost and performance data.
Officials say it's also allowing the Air Force broad leeway in setting specific standards for the ULA programs to meet.
In an effort to keep costs down, however, the Air Force wants to classify space-launch capability as a commercial item and transition to a system where multiple private companies would compete for government contracts.
That would largely end the government's close oversight of ULA, the watchdog said.
"The Air Force will not have access to the same level of detail it currently obtains and the contractors will be allowed to use business systems that are not required to meet DOD standards," the GAO report said.
Although the competitive system is what the Pentagon has in place for nearly every other military purchase, the GAO noted that the complexities and challenges involved in space launches limits the number of companies that have the ability to compete.
"The launch industry is undergoing changes, and the ability of the domestic industry to sustain two or more providers in the long-term, while desirable, is unclear," the GAO said.
Indeed, getting ULA off the ground in 2005 and able to supply the government with rockets required the combined efforts of aerospace heavyweights Boeing and Lockheed-Martin, two of the founding partners of the group.
The watchdog office noted that only Space X, a company started by tech businessman Elon Musk, may have the ability to compete with ULA.
And Space X has even recently come under scrutiny after two of its recent launches crashed or exploded shortly after launch, the most recent in April.
The Air Force said it agrees that a cautious approach needs to be taken.
"The Air Force is implementing a phased approach to its EELV efforts, to include awarding launch services on a case by case basis," said a statement from Lt. Gen. Arnold Bunch, Jr., the Military Deputy for the Office of the Assistant Secretary of the Air Force, Acquisitions.
"The Air Force shall review and analyze all data available as it moves forward to create a successful acquisition strategy that provides assured affordable access to space," Bunch said.
The GAO noted that the Air Force believes "the level of information gathered [under the new system] is sufficient for monitoring launch costs in a competitive environment."
