Source: DoD Will Also Seek Anti-Trust Protections

The US Department of Defense has given its conditional approval to a proposed merger of two struggling rocket launch programs, according to an unnamed defense insider, to the chagrin of other DoD suppliers such as Northrop Grumman and others wary of a quasi-monopoly.

The merger -- first proposed last May, as was reported in Aero-News, to end an long-running proprietorship dispute between the two companies -- would merge the government launch programs of Boeing and Lockheed Martin into a joint operation known as United Launch Alliance.

If approved by the Federal Trade Commission, ULA will operate both Boeing's Delta and Lockheed's Atlas rockets, sharing launch expenses and development costs for future government projects -- including the planned Evolved Expendable Launch Vehicle (below, right).

That would give the consortium an unfair advantage, say competitors such as Northrop Grumman and rocket-startup SpaceX, who are hoping to win government contracts as well.

Advocacy group Citizens Against Government Waste has also weighed in, calling the proposed merger of the two largest government subcontractors as a step towards creating a "defense contractor oligopoly," according to the Washington Post.

"The structure slams the door on any possible competition," CAGW President Tom Schatz said in October, as was reported in ANN. "The ULA locks up all contracts, ensuring high costs for taxpayers and stifling innovation."

That isn't so, says representatives from both companies.

"We're very optimistic about the deal and the benefits it will bring to our customers, to our shareholders and to our employees," said Jeff Adams, spokesman for Lockheed Martin. L-M is the DoD's largest supplier, with Boeing a close second.

"We continue to work with the government to answer lingering questions and are optimistic that we'll be given the approval to move forward with the joint venture," said Boeing spokesman Dan Beck.

Beck added neither company had received indications a final decision was imminent, and no one at the DoD has publicly commented on this latest development.

For its part, the Pentagon is said to be behind the anti-trust protections sought by Northrop Grumman and others, said a representative with Arlington, VA-based research group The Lexington Institute.

FMI: www.lockheed-martin.com, www.boeing.com