By Andy Pasztor 

Despite efforts to foster competition for launching Pentagon spacecraft, senior Air Force and intelligence officials aren't ready to put their biggest, most advanced spy satellites into orbit on top of Space Exploration Technologies Corp.'s rockets.

With the heavy-lift Falcon variant not expected to be certified for military missions until 2017 at the earliest, Pentagon brass have opted for the familiar, though substantially more expensive, option of continuing to put such satellites on proven rockets built by the incumbent rival to SpaceX, as the Southern California company is called.

That is the upshot of the U.S. military's decision to move toward awarding a pair of sole-source launch contracts to United Launch Alliance, a joint venture between Boeing Co. and Lockheed Martin Corp.

United Launch builds heavy-lift Delta IV rockets that have been the mainstay of the Pentagon's National Reconnaissance Office, in addition to other boosters for smaller payloads. Announced last week, the decision covers spy-satellite launches slated between 2020 and 2023.

Closely held SpaceX, founded by billionaire entrepreneur Elon Musk, in the past has pushed hard to be able to compete for Pentagon launches across the board, even filing suit against the Air Force two years ago to protest being shut out of such business. The litigation was dropped after Pentagon officials pledged to open up competition for future launch contracts.

Earlier this year, SpaceX won the first launch under the terms of that settlement: an $82-million contract to blast a Global Positioning System satellite into orbit in 2018.

But SpaceX currently doesn't have a variant of its rocket already approved by the Air Force to carry the NRO's most expensive flagship satellites, which can cost $1 billion or more. And according to industry officials, NRO officials privately have played down the prospect that SpaceX will get any such launches through the middle of the next decade.

According to some industry estimates, the overall cost of launching a spy satellite on the most powerful Delta IV variant can exceed $550 million.

Development of the SpaceX's rival booster, called the Falcon Heavy, is years behind schedule. It isn't slated to make its initial launch until later this year.

The company's response to last week's announcement, however, could signal the beginning of a different, less combative relationship with the Pentagon. Instead of complaining that the Falcon Heavy should remain in the mix for at least the spy- satellite launch targeted for 2023, SpaceX signaled it won't protest the Air Force's decision. A spokesman said "we worked closely" with Pentagon and Air Force officials "on this action and decided it was the right approach."

One possible reason for SpaceX's approach may be that its manifest already is full for the next few years, and NRO officials are renowned for objecting to launch schedule slips.

In its announcement, the Air Force said it chose Delta IVs due to the timing and complexity of integrating the satellites with the rockets. The service also said United Launch is "currently the only responsible source" to blast those particular payloads into orbit.

Previously, Air Force officials provided industry with strategy documents indicating the military didn't anticipate "full and open competition" between United Launch and SpaceX to begin until 2023. Also, Claire Leon, the Air Force's top rocket-acquisition official, told an industry conference in May that SpaceX was certified to place satellites into only some of the various orbits around the Earth used by the U.S. military.

For United Launch, which has slashed staff and is scrambling to cut costs further at the same time it develops a new engine for its workhorse Atlas V booster, the Pentagon's move seems to assure it will have business to keep heavy-lift Delta IV's flying well into the next decade. The joint venture previously stressed it intends to keep those versions of the Delta IV flying as long as the Pentagon wants to use them.

Corrections & Amplifications: Space Exploration Technologies Corp.'s most-powerful rocket is the Falcon Heavy. An earlier version of this article incorrectly used an older name for the rocket: Falcon 9 Heavy.

Write to Andy Pasztor at andy.pasztor@wsj.com

 

(END) Dow Jones Newswires

August 10, 2016 02:48 ET (06:48 GMT)

Copyright (c) 2016 Dow Jones & Company, Inc.
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