Lockheed & Boeing’s ULA gets nod from FTC

A long delayed proposal to launch government satellites has finally got nod from the U.S. Federal Trade Commission (FTC) on Monday.

The two major U.S. defense contractors Lockheed Martin Corp. and Boeing Co. had announced their $1.06 billion (€830 million) venture in May 2005, seeking the $150 million (€118 million) in annual cost savings the joint venture would bring to the U.S. government, but the concerns that the two would dominate the market for medium-to-heavy (MTH) government rocket launches forced FTC to halt formation of the venture, named the United Launch Alliance (ULA).

The Federal Trade Commission yesterday, though, announced its decision to intervene in the formation of JV and approved the ULA by a 5-0 vote, but commission still requires defense firms to adopt non-discriminatory terms in order to proceed with launch vehicle joint venture.

FTC said it made the decision after having discussions with the Department of Defense (DoD), which concluded that the benefits to national security by providing reliable and cheaper launch services outweighed concerns about less competition.

In settling the Commission’s charges, the defense contractors must take the following actions:

(1) ULA must cooperate on equivalent terms with all providers of government space vehicles;

(2) Boeing and Lockheed’s space vehicle businesses must provide equal consideration and support to all launch services providers when seeking any U.S. government delivery in orbit contract; and

(3) Boeing, Lockheed, and ULA must safeguard competitively sensitive information obtained from other space vehicle and launch services providers.

Talking about the FTC decision, Chicago-based Boeing’s spokesman Dan Beck said that its decision "brings the ULA closer to the goal of meeting the government's need for reliable, lower-cost launch services for national security, civil and scientific payloads."

At the same time, Maryland-based Lockheed’s spokesman Tom Jurkowsky also called the decision a good news. Although, both the companies still require to complete reams of legal documents before the deal closes.

ULA, a joint venture of Boeing and Lockheed is designed to consolidate manufacturing and development of the firms’ expendable launch vehicles (ELV). The sale of launch services to the U.S. government will be also merged into a 50-50 venture between the two companies.

While Boeing and Lockheed will not exchange cash in the transaction, each party’s contributed businesses are valued at more than $530.7 million (€417 million). It is slated for Denver and would combine launch services for Boeing's Delta and Lockheed's Atlas rockets, known as ELV.