Government asks to lift ban on buying Russian engine
BY STEPHEN CLARK
Posted: May 7, 2014
The Treasury and State departments have concluded that United Launch Alliance's Russian engine purchases do not appear to violate sanctions levied against a senior Russian government official, prompting U.S. government lawyers to ask a federal judge to reverse an order blocking the company from buying Atlas 5 rocket engines.
NPO Energomash is the Moscow-based builder of the RD-180 engine used on the first stage of the workhorse Atlas 5 launcher. The RD-180 engines are supplied to ULA by RD AMROSS, a Florida-based company jointly owned by NPO Energomash and United Technologies Corp.
U.S. military satellites, government spy payloads and NASA scientific probes regularly launch on Atlas 5 rockets.
Judge Susan Braden wrote the order would stand "unless and until" the court received the opinion from the Treasury, Commerce and State departments that the engine purchases do not contravene sanctions against Rogozin.
SpaceX filed suit April 28 to prevent the U.S. Air Force from awarding a block of 28 launches worth $11 billion to ULA, which formed in 2006 from the merger of Boeing and Lockheed Martin's Delta and Atlas rocket programs. The deal includes 36 rocket cores, but four of the launches will use the Delta 4-Heavy, which is powered by three cores each.
SpaceX's court filing did not explicitly request action to prevent ULA from purchasing RD-180 engines from Russia, but the company raised concerns money for the engines could benefit Rogozin, who is charged with overseeing Russia's space and defense industries.
Rogozin was listed with other top Russian officials in sanctions announced by the White House in March outlawing business with certain individuals.
The court has not ruled on the Air Force's sole-source procurement from ULA but issued the preliminary order halting engine purchases from Russia.
The Justice Department and United Launch Alliance say letters submitted by Treasury and State officials satisfy the judge's requirement for reversing the injunction. The Commerce Department wrote to the the judge saying it deferred to the Treasury Department's opinion.
Using nearly identical language, representatives from the Treasury and State departments wrote they have not determined NPO Energomash is subject to restrictions listed in a March 17 executive order that sanctioned senior Russian officials.
"Therefore, to the best of our knowledge, purchases from and payments to NPO Energomash currently do not directly or indirectly contravene" the March 17 executive order, State and Treasury officials wrote in letters dated May 6.
Justice Department lawyers representing the U.S. government, which is named as the defendant in the SpcaeX suit, filed a motion Tuesday to dissolve the court's injunction stopping ULA's engine purchases from Russia.
The motion says the letters from the State and Treasury departments demonstrate that transactions with NPO Energomash do not violate sanctions against Rogozin.
SpaceX responded Wednesday with a court filing claiming the letters are "non-responsive" and do not clear NPO Energomash of an affiliation with Rogozin. SpaceX says the government must prove payments for Russian rocket engines do not wind up with Rogozin.
But the Treasury and State departments appeared to disagree, writing they must take "affirmative action" to restrict U.S. companies from business with NPO Energomash.
The court is scheduled hold a hearing Thursday on the subject of the engine purchase ban.
Follow Stephen Clark on Twitter: @StephenClark1.
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