Orbital ATK, a Dulles-based aerospace manufacturer, is suing the Defense Advanced Research Projects Agency over plans to award a Canadian firm a $15 million (NZ$21m) contract to build a fleet of space-faring robots capable of repairing government and commercial satellites.

Satellites are often declared obsolete because of problems that could be fixed easily if the objects were accessible, and the satellites' owners are saddled with the extra costs of sending replacements into orbit. A fleet of robotic satellites capable of repairing other satellites could theoretically save governments and private companies huge sums of money in launch costs. This would also help to address the volume of space junk in Earth's orbit.

Three entities - NASA, DARPA and Orbital ATK - are spearheading efforts that could remedy this problem.

Orbital argues that DARPA's program, called the Robotic Servicing of Geosynchronous Satellites, would unfairly compete with its own privately funded effort, a system called the Mission Extension Vehicle 1, which is backed by at least US$200m from investors. Orbital has set up at a production facility in Northern Virginia, with a launch planned for next year.

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But DARPA wants to build out a government-funded program of its own and is looking to a company that Orbital views as a competitor to help build the system. On Thursday, the agency said it would give the contract to Space Systems/Loral (SSL), a US subsidiary of Canadian aerospace firm MacDonald, Dettwiler and Associates, in an agreement the agency calls a public-private partnership. The announcement did not describe the value of the deal, but a proposed contract earlier pegged the cost of the effort at US$15m.

A separate NASA-funded effort called Restore-L also went to SSL, giving a Canadian-owned company a substantial chunk of the US government-funded effort to build space robots.

In its suit, Orbital alleges that the contract violates federal policy against creating government space programs that compete with existing commercial ones.

"The U.S. National Space Policy explicitly directs government agencies to avoid funding activities that are already in development in the commercial marketplace," the company said in a statement. "Orbital ATK will continue to pursue all available options to oppose DARPA from moving forward with this illegal and wasteful use of US taxpayer dollars."

A DARPA spokesman declined to comment on pending legal action.

The issue at the heart of Orbital ATK's lawsuit - whether certain government-funded space programs are duplicative of private efforts - has come up time and again in disputes over space contracts.

Orbital found itself on the other side of the debate last April when industry voices objected to its plan to refurbish Cold War-era missiles stored by the government. In 2014, Elon Musk's SpaceX sued the Air Force over a US$70 billion launch program that was dominated by a taxpayer-funded competitor.

The current fight over DARPA's space robots contract first stirred last month when Rep. Duncan D. Hunter, R-Calif., wrote to DARPA Acting Director Steven Walker expressing concern that the contract could "dramatically disrupt normal market conditions" in the commercial spaceflight industry by creating a government-funded competitor. Last week, several lawmakers, including Rep. Barbara Comstock, R-Va., whose district includes Orbital ATK's headquarters, asked DARPA to halt its program entirely.

The robotic-repair program "seems to duplicate efforts of other government agencies and commercial industry," the representatives wrote, according to a copy of the letter obtained by The Washington Post. "Without considering a pause in the program for appropriate review and justification to Congress, your agency is demonstrating intransigence and is acting in bad faith."

The agency contends that the contract calls for certain capabilities that are not covered by any existing government or commercial effort. In a response to the lawmakers, the agency said a NASA satellite repair program called Restore-L does not have the same degree of autonomous control as what DARPA is planning. The NASA program - also awarded to Space Systems/Loral - is set to launch by 2020. DARPA argued that commercial solutions have narrower capabilities.

"No existing or planned commercial servicing systems address this full set of capabilities," the agency said in a response letter that did not mention Orbital ATK.

Marco Caceres, a senior analyst with market research firm Teal Group, says it's hard to make the case that DARPA's contract interferes with anything that exists in the commercial market.

A robotic satellite repair system "is not an Orbital Sciences' original idea," Caceres said.

"I haven't seen any commercial venture that has dedicated itself to this sort of market, this sort of mission, so I don't know how this would infringe on Orbital ATK's rights."

It is not unusual for foreign firms to set up US subsidiaries to make products for the world's largest military.

But the lawsuit filed by Orbital nonetheless seems to take issue with the fact that DARPA is awarding the contract to a foreign-owned company.

"DARPA unlawfully intends to waste hundreds of millions of US taxpayer dollars to develop robotic satellite servicing technology. ... DARPA then intends to give away this technology to a foreign-owned company," the suit alleges.