Or­bital ATK of Va. sues mil­i­tary over ro­bot­ics con­tract

Com­pany says award to Canadian firm du­pli­cates U.S. pri­vate-sec­tor ef­fort

The Washington Post - - CAPITAL BUSINESS - BY AARON GREGG aaron.gregg@wash­post.com

Or­bital ATK, a Dulles-based aero­space man­u­fac­turer, is su­ing the De­fense Ad­vanced Re­search Projects Agency over plans to award a Canadian firm a $15 mil­lion con­tract to build a fleet of space-far­ing ro­bots ca­pa­ble of re­pair­ing gov­ern­ment and com­mer­cial satel­lites.

Satel­lites are of­ten de­clared ob­so­lete be­cause of prob­lems that could be fixed eas­ily if the ob­jects were ac­ces­si­ble, and the satel­lites’ own­ers are sad­dled with the ex­tra costs of send­ing re­place­ments into or­bit. A fleet of ro­botic satel­lites ca­pa­ble of re­pair­ing other satel­lites could the­o­ret­i­cally save gov­ern­ments and pri­vate com­pa­nies huge sums of money in launch costs. This would also help to ad­dress the vol­ume of space junk in Earth’s or­bit.

Three en­ti­ties — NASA, DARPA and Or­bital ATK — are spear­head­ing ef­forts that could rem­edy this prob­lem.

Or­bital ar­gues that DARPA’s pro­gram, called the Ro­botic Ser­vic­ing of Geosyn­chronous Satel­lites, would un­fairly com­pete with its own pri­vately funded ef­fort, a sys­tem called the Mis­sion Ex­ten­sion Ve­hi­cle 1, which is backed by at least $200 mil­lion from investors. Or­bital has set up at a pro­duc­tion fa­cil­ity in North­ern Vir­ginia, with a launch planned for next year.

But DARPA wants to build out a gov­ern­ment-funded pro­gram of its own and is look­ing to a com­pany that Or­bital views as a com­peti­tor to help build the sys­tem. On Thurs­day, the agency said it would give the con­tract to Space Sys­tems/Lo­ral (SSL), a U.S. sub­sidiary of Canadian aero­space firm Mac­Don­ald, Det­twiler and As­so­ci­ates, in an agree­ment the agency calls a pub­lic-pri­vate part­ner­ship. The an­nounce­ment did not de­scribe the value of the deal, but a pro­posed con­tract ear­lier pegged the cost of the ef­fort at $15 mil­lion.

A sep­a­rate NASA-funded ef­fort called Re­store-L also went to SSL, giv­ing a Canadian-owned com­pany a sub­stan­tial chunk of the U.S. gov­ern­ment-funded ef­fort to build space ro­bots.

In its suit, Or­bital al­leges that the con­tract vi­o­lates fed­eral pol­icy against creat­ing gov­ern­ment space pro­grams that com­pete with ex­ist­ing com­mer­cial ones.

“The U.S. Na­tional Space Pol­icy ex­plic­itly di­rects gov­ern­ment agen­cies to avoid fund­ing ac­tiv­i­ties that are al­ready in de­vel­op­ment in the com­mer­cial mar­ket­place,” the com­pany said in a state­ment. “Or­bital ATK will con­tinue to pur­sue all avail­able op­tions to op­pose DARPA from mov­ing for­ward with this il­le­gal and waste­ful use of U.S. tax­payer dol­lars.”

A DARPA spokesman de­clined to comment on pend­ing le­gal ac­tion.

The is­sue at the heart of Or­bital ATK’s law­suit — whether cer­tain gov­ern­ment-funded space pro­grams are du­plica­tive of pri­vate ef­forts — has come up time and again in dis­putes over space con­tracts.

Or­bital found it­self on the other side of the de­bate last April when in­dus­try voices ob­jected to its plan to re­fur­bish Cold War-era mis­siles stored by the gov­ern­ment. In 2014, Elon Musk’s SpaceX sued the Air Force over a $70 bil­lion launch pro­gram that was dom­i­nated by a tax­payer-funded com­peti­tor.

The cur­rent fight over DARPA’s space ro­bots con­tract first stirred last month when Rep. Dun­can D. Hunter (R-Calif.) wrote to DARPA act­ing di­rec­tor Steven Walker ex­press­ing con­cern that the con­tract could “dra­mat­i­cally dis­rupt nor­mal mar­ket con­di­tions” in the com­mer­cial space­flight in­dus­try by creat­ing a gov­ern­ment-funded com­peti­tor. Last week, sev­eral law­mak­ers, in­clud­ing Rep. Bar­bara Com­stock (R-Va.), whose dis­trict in­cludes Or­bital ATK’s head­quar­ters, asked DARPA to halt its pro­gram en­tirely.

The ro­botic-re­pair pro­gram “seems to du­pli­cate ef­forts of other gov­ern­ment agen­cies and com­mer­cial in­dus­try,” the rep­re­sen­ta­tives wrote, ac­cord­ing to a copy of the let­ter ob­tained by The Wash­ing­ton Post. “With­out con­sid­er­ing a pause in the pro­gram for ap­pro­pri­ate re­view and jus­ti­fi­ca­tion to Congress, your agency is demon­strat­ing in­tran­si­gence and is act­ing in bad faith.”

The agency con­tends that the con­tract calls for cer­tain ca­pa­bil­i­ties that are not cov­ered by any ex­ist­ing gov­ern­ment or com­mer­cial ef­fort. In a re­sponse to the law­mak­ers, the agency said a NASA satel­lite re­pair pro­gram called Re­store-L does not have the same degree of au­ton­o­mous con­trol as what DARPA is plan­ning. The NASA pro­gram — also awarded to Space Sys­tems/Lo­ral — is set to launch by 2020. DARPA ar­gued that com­mer­cial so­lu­tions have nar­rower ca­pa­bil­i­ties.

“No ex­ist­ing or planned com­mer­cial ser­vic­ing sys­tems ad­dress this full set of ca­pa­bil­i­ties,” the agency said in a re­sponse let­ter that did not men­tion Or­bital ATK.

Marco Cac­eres, a se­nior an­a­lyst with mar­ket re­search firm Teal Group, says it’s hard to make the case that DARPA’s con­tract in­ter­feres with any­thing that ex­ists in the com­mer­cial mar­ket.

A ro­botic satel­lite re­pair sys­tem “is not an Or­bital Sciences’ orig­i­nal idea,” Cac­eres said.

“I haven’t seen any com­mer­cial ven­ture that has ded­i­cated it­self to this sort of mar­ket, this sort of mis­sion, so I don’t know how this would in­fringe on Or­bital ATK’s rights.”

It is not un­usual for for­eign firms to set up U.S. sub­sidiaries to make prod­ucts for the world’s largest mil­i­tary.

But the law­suit filed by Or­bital nonethe­less seems to take is­sue with the fact that DARPA is award­ing the con­tract to a for­eignowned com­pany.

“DARPA un­law­fully in­tends to waste hun­dreds of mil­lions of U.S. tax­payer dol­lars to develop ro­botic satel­lite ser­vic­ing tech­nol­ogy. . . . DARPA then in­tends to give away this tech­nol­ogy to a for­eignowned com­pany,” the suit al­leges.

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