The Alaska Aerospace Corp. said Friday it hopes to drum up new business for the state-owned rocket range in Kodiak and has started negotiations on a $21 million incentive plan with Lockheed Martin.
The "intent to award" letter does not commit Lockheed Martin to scheduling launches from Kodiak and it does not commit Alaska Aerospace to providing money to the private rocket company, Craig Campbell, chief executive officer of Alaska Aerospace, said at a Friday press conference.
"My reason for wanting to have this press announcement is to demonstrate momentum," Campbell told reporters. "I know there's a lot of interest in what are we doing and why we are doing it."
With the state budget coming under increasing pressure because of the collapse in oil prices, Alaska Aerospace is also looking for momentum on the political front, hoping to drum up enough support to stay in business,
Gov. Bill Walker said Friday he hasn't been briefed on the details of the Alaska Aerospace plans with Lockheed Martin and wants to review the project before going forward. Campbell said he has not met with Walker but that he is looking forward to doing so.
At the heart of the potential deal with Lockheed Martin is a $25 million grant from 2012 that was supposed to have been the state share of a new launchpad project to be spearheaded by Lockheed Martin.
The new talks with Lockheed Martin come in response to a request for proposals under which the state said it wanted to boost future launches by using what remains of that grant as an incentive.
"This effort will be a competitive source selection," the state company said in its Oct. 2 request for proposals. "The total amount of money to be awarded for this competition is $21M to a single selectee."
Lockheed Martin was one of four companies to respond to the Alaska Aerospace request in search of new business with medium-sized rockets, about 105 feet tall and almost 8 feet wide.
"We are going to issue an 'intent to award' letter to Lockheed Martin to start entering negotiations for a contract for medium-lift capability for the Kodiak Launch Complex. It's a great day," Campbell said. "It's what we've been trying to achieve for a number of years."
The request for proposals asked companies to "describe how your company plans to bring a minimum of three launches to KLC (Kodiak Launch Complex) by 2020. Describe the contractual status of each mission and indicate where a firm commitment for each mission is planned for announcement."
The $25 million capital appropriation in 2012 had been approved by former Gov. Sean Parnell and legislators as a state investment in a new $125 million launchpad, with Lockheed Martin expected to raise the rest.
"Construction of this additional launchpad will not only bring business to Alaska, but it will also create high-paying jobs in the future," Parnell said at the time.
The new launchpad was to be used for the Athena III rocket, a Lockheed Martin venture that stalled for lack of business. The company did not come up with the $100 million financing plan and the launchpad was never built.
The state is now working with Lockheed Martin for plans to launch smaller rockets than the Athena III from the existing launchpad. That facility, damaged by a rocket failure in August, is to be repaired over the next year and the goal reported Friday is to modify it for the Athena II S-6.
Campbell said the early estimates put the damages at $29 million, most of which is expected to be covered by insurance.
He said that from $3 million to $5 million might be needed beyond the expected repairs to prepare the facility for the Athena II S-6 rockets, which weigh 492,000 pounds at liftoff, more than triple the weight of the Athena I rockets that flew from Kodiak in the past.
Campbell said the appropriation intended for the new launchpad can be used as part of an incentive program because the goal is the same—attracting larger rockets to the Kodiak facility.
In the request for proposals, the state said the company should include "a summary of the benefits of your proposal to the State of Alaska and why your selection deserves investment by Alaska taxpayers."
Campbell said Friday it's not clear that the $21 million incentive will be paid and it is not committed to Lockheed Martin.
"At this point I don't know whether they're going to need any of that $21 million," he said. "There certainly is some advantage to modifying Launch Pad 1 to medium-lift. And I may be able to do that within my existing budget."
Campbell said he does not intend to go beyond the first $3 million authorized by the Legislature without assurances from Lockheed Martin about a future schedule and commitments.