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Press Release


"3 ... 2 ... 1 ... Rip-Off!" Taxpayer Group Blasts Boeing/Lockheed Launch Vehicle Plan

For Immediate Release December 19, 2005

(Alexandria, VA) - The pending Boeing/Lockheed "United Launch Alliance" (ULA) to provide the Air Force with expendable rockets would unfairly strand taxpayers with a half-billion-dollar-a-year subsidy: that's the message the 350,000-member National Taxpayers Union (NTU) delivered to Congress today, in an open letter urging lawmakers to end subsidies for the companies' current and proposed space-booster schemes. Federal policymakers are expected to consider the merger deal as early as this week.

"Launch platforms for satellites can be expendable, but tax dollars never are," said NTU Director of Government Affairs Paul Gessing. "Over the past decade, the Air Force's Evolved Expendable Launch Vehicle (EELV) initiative has moved from the best of intentions to the worst of results, and now the EELV is poised to go where no rocket program has gone before - toward a near-permanent government bailout of Boeing's and Lockheed's launch businesses."

Recently the sole providers of the troubled EELV project - Boeing and Lockheed Martin - proposed to merge their government space-booster operations into a United Launch Alliance, which the companies say will save the federal government as much as $150 million. But Gessing's letter to Members of Congress calls this claim "dubious on its face," because it fails to account for increases in taxpayer subsidies to Boeing, Lockheed, and, if approved, the ULA.

The source of the problem, Gessing contends, was that from the EELV's very inception in 1995, the two firms appeared "to have significantly underbid" to secure the initial contracts. Subsidies such as "assured access payments" soon followed, yet it became clear that Lockheed and Boeing would experience perpetual losses on EELV. The latest arrangement would give the two companies a sole-source "sustainment capability" contract - an indication, in NTU's view, that "competition is giving way to permanent taxpayer subsidies."

Since its founding NTU has opposed numerous wasteful or low-priority defense/aerospace programs, including the F/A-22 Raptor, the Crusader artillery system, and the X-33 orbiter. As Gessing noted, the ULA shows "many telltale signs" of previous government contracts gone awry.

"The Air Force's newly-revised EELV acquisition strategy makes a bad situation worse for taxpayers," the letter to Members of Congress concluded. "... NTU urges you to support the elimination of the EELV subsidy contracts and instead return to price-competitive acquisitions."

NTU is a non-profit, non-partisan citizen group founded in 1969 to work for lower taxes and smaller government at all levels. Note: Gessing's letter to Congress is available at www.ntu.org.

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