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ULA needs relief on Russian engines before GPS launch bid -CEO

(Adds details, comments from Bruno, paragraphs 3-14, adds bylines)

By Irene Klotz and Andrea Shalal

CAPE CANAVERAL, Fla./WASHINGTON, Oct 2 (Reuters) - United Launch Alliance, a joint venture of Lockheed Martin and Boeing, on Friday said it cannot bid in a U.S. Air Force competition to launch a GPS satellite unless it gets some relief from a ban on use of Russian rocket engines.

ULA Chief Executive Officer Tory Bruno told reporters in Cape Canaveral, Florida, that the company was seeking a partial waiver on trade sanctions enacted last year that ban U.S. military use of the Russian RD-180 engine that powers ULA's primary workhorse Atlas 5 rocket.

The issue is now in the hands of Defense Secretary Ash Carter, Bruno said. Without the waiver, he said, ULA could not compete for that launch or any other new national security launches until a new American-built engine is ready in 2019.

"That's not a viable business model," he told reporters.

Bruno said the company needed a decision to be able to submit a bid for the GPS launch competition, the first time in nearly a decade that launches of large U.S. military and satellites will be opened to competition.

The Air Force earlier this year approved privately held Space Exploration Technologies, or SpaceX, to compete for such launches against ULA, which has been the monopoly provider for most Air Force satellite launches since its creation in 2006.

The Air Force issued final rules for the GPS III launch competition on Wednesday, and bids are due Nov. 16.

"Today I have still have no engines to bid," Bruno told reporters after ULA's 100th consecutive successful launch, an unmanned Atlas 5 rocket carrying a Mexican communications satellite. "I would not have a product to offer in my proposal that complied with the law of the land."

The ban does not affect RD-180 engines used for NASA and commercial missions, but whenever ULA taps its current RD-180 inventory for non-military flights, it cannot order a replacement for later use on a military missions.

Bruno said ULA is burning through its supply of RD-180 engines at a rate of one every four to six weeks.

U.S. lawmakers banned use of the Russian engines for U.S. military and spy satellite launches last year after Russia's invasion of the Crimea region of Ukraine.

Bruno said the ban affected 24 of 29 engines that ULA had ordered from Russia, but not paid for, before Russia invaded Crimea. The five engines that could be used under the law had already been assigned to other missions and were not available for ULA to use in a bid for the GPS III launch, he said.

Bruno said he was encouraged that U.S. lawmakers had allowed use of four more engines in a compromise version of the fiscal 2016 defense authorization bill. But President Barack Obama has said he plans to veto the bill, which means ULA needs a Pentagon waiver.

Air Force Secretary Deborah James has expressed support for a waiver, but has not formally requested one yet, according to a U.S. defense official. Bruno also wrote a letter directly to Carter explaining the issue, the official said.

(Reporting by Irene Klotz in Cape Canaveral and Andrea Shalal in Washington; Editing by Grant McCool and David Gregorio)