By Andrea Shalal
WASHINGTON (Reuters) - U.S. senators on Wednesday urged the Air Force to allow more competition in the multibillion-dollar market for launching government satellites, citing rising costs and concerns about Russian-made engines that power some of the U.S. rockets.
Lawmakers said the Air Force's budget plan for fiscal 2015 reduced opportunities for privately held Space Exploration Technologies (SpaceX) and others to gain a foothold in a program now dominated by the two biggest U.S. weapons makers, Lockheed Martin Corp and Boeing Co.
Democratic Senator Dianne Feinstein told Air Force officials it was "unacceptable" to reduce competition while the cost of the Evolved Expendable Launch Vehicle (EELV) program were rising sharply.
"I'm worried about the costs going up exponentially," she told a hearing of the Senate Appropriations Committee's defense subcommittee.
Feinstein and five other senators also sent a letter to Defense Secretary Chuck Hagel urging him to ensure that the launch program allowed competition in fiscal 2015 as planned.
The congressional Government Accountability Office this week said the cost of each new launch had more than tripled to $420 million as of August 2013, and the total cost of the program was now projected to reach $70 billion.
Allowing other companies to compete for the launches could also help resolve growing concerns about a Russian engine used to power the Atlas V launcher built by the Lockheed-Boeing venture, the United Launch Alliance, senators said.
Democratic Senator Richard Durbin, who heads the defense subcommittee, said the Air Force's budget request diminished opportunities for competition and continued to favor the Lockheed-Boeing venture, despite concerns about the Russian-made engines.
U.S. dependence on Russian engines has long been a concern of U.S. lawmakers, but those worries have been heightened after Russia's seizure of Crimea, an autonomous region in Ukraine.
Air Force Secretary Deborah James told the committee she also found the reliance on Russian engines "worrisome" and expected Air Force officials to complete a study of the issue by late May that would look at alternatives such as possible U.S. production of the motors, and the likely cost.
Air Force Chief of Staff General Mark Welsh said current rough estimates showed it would take about five years and $1 billion to start building the engines in the United States.
Both Welsh and James said the Air Force is committed to opening the launch market to competition, but said new market entrants needed to prove they could safely launch sensitive military and intelligence satellites.
James told senators the Air Force was not trying to avoid competition by postponing orders for some rocket launches until after fiscal 2019. She said the launches were simply not needed at the moment since U.S. global positioning satellites were lasting longer on orbit than expected.
She also questioned the GAO's cost estimate for the program, and said it may not have factored in savings the Air Force says it is getting by ordering launches in bulk.
She said the Air Force remained committed to competition, and expected SpaceX to be certified to compete for certain launches of lighter satellites by the end of 2014, with qualification for heavier launches to follow by 2017.
"It had nothing to do with locking someone out of competition," she said. "The quicker we can get other companies qualified to compete, the better."
Allison Bryan, a spokeswoman for SpaceX, welcomed the senators' letter to Hagel. "Increasing fair competition in the EELV program is a smart decision that would not only improve efficiency and optimize budgets, but also eliminate America's reliance on Russian-made engines which, in light of the crisis in Ukraine, is a direct threat to our nation's security."
(Reporting by Andrea Shalal; Editing by Lisa Shumaker)