Boeing and Lockheed Martin joint venture United Launch Alliance (ULA) has come out of the US Air Force's (USAF) GPS-III satellite space launch competition, citing difficulty in meeting regulations and contractual requirements.
Restrictions in procuring Russia-made RD-180 engines is the primary reason for the decision, ULA said and added that contractual terms were also not suitable.
The competition requires bidders to certify that the government funds provided for other contracts will not be used for the GPS-III mission.
ULA CEO Tory Bruno told Reuters that the competition's 'lowest price technically acceptable' structure meant officials could not differentiate between bids on the basis of reliability, schedule certainty, technical capability and past performance.
The satellite launch company has been seeking a waiver on restrictions to import engines from Russia for its Atlas 5 rocket.
Last month, the Pentagon has rejected ULA's plea, and suggested that it divert the engines meant for commercial launches for military purposes or wait for Congress to take a decision on the ban on imports from Russia.
The US banned Russian engines for military and spy satellite launches last year after the latter's attacks on Ukraine. The RD-180 engines will not be used by the US for sensitive missions after 2019.
ULA said its board could neither wait for a decision from the Congress nor divert engines as the existing ones have already been configured for use in commercial launches.
The company's decision leaves Space Exploration Technologies (SpaceX) as the only bidder for the contract. The final contract award is expected to be announced in March 2016.
ULA has been the sole satellite launcher for the Pentagon until the latter decided to introduce competition for secretive satellite launches to cut costs.
In October, it launched USAF's GPS IIF-11 satellite on Atlas V.
In January, the USAF allowed SpaceX to compete for launch services under the Evolved Expendable Launch Vehicle (EELV) programme.
While SpaceX declined to comment on ULA's decision, company founder Elon Musk previously told Reuters that the threat to skip the air force competition was 'nothing less than deceptive brinkmanship aimed at subverting the will of Congress'.
Image: Atlas V launching USAF's GPS IIF-11 satellite. Photo: courtesy of United Launch Alliance.