$1 Billion Question: Where Has All the Air Force EELV Money Gone?

CAPE CANAVERAL, Fla. -- Taxpayers may never know how Lockheed Martin Corp. and The Boeing Co. spend at least $1 billion in taxpayer money set aside to design, build and launch new rockets the military needs to lift heavier satellites into space.

The companies' spending is not classified to protect national security. Instead, it's one of many financial details about the multibillion dollar Evolved Expendable Launch Vehicles project that are being kept secret to protect the business interests of two of America's biggest defense contractors.

Under a deal struck in 1998, the Defense Department gave the companies $500 million each to aid the development of two rocket systems: Lockheed's Atlas 5 and Boeing's Delta 4. The government used a new style of defense contract in which the Air Force is a "silent partner" with almost no control over contractor spending and decision-making.

The Air Force, the two companies and some industry analysts basically say, "So what?"

They contend taxpayers will save as much as $10 billion on military satellite launches during the next two decades because of this new way of doing business, which all but privatized rocket development work previously done by the military.

Analysts inside and outside the program said that means fewer government-paid personnel and facilities, less money spent navigating the bureaucracy and freedom for two contractors to use their expertise to get better rockets off the ground for less money.

However, government auditors and taxpayer watchdog groups cautioned one side effect of the new way of doing business is far less public disclosure of what the companies and the military are doing with public money.


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