SpaceX Scores Another Win in Push for Military Satellite Launches
March 15 2017 - 12:17AM
Dow Jones News
By Andy Pasztor
The U.S. Air Force picked Elon Musk's SpaceX to blast a second
Global Positioning System satellite into orbit, part of a broader
drive to open up various other launch contracts for competitive
bidding through late 2019.
Tuesday's award of the $96.5 million, fixed-price contract to
SpaceX indicates that faced with escalating budget pressures and
heightened congressional prodding, Pentagon brass are stepping up
efforts to give the Southern California company additional
opportunities to become a significant provider of military
satellite launches.
Space Exploration Technologies Corp. has battled for years and
even took the military to court to be allowed to bid on such
contracts using its Falcon 9 booster. The latest developments mark
another victory in the company's campaign to snare business away
from its dominant rival, a joint venture between Boeing Co. and
Lockheed Martin Corp.
SpaceX became eligible to conduct military launches in May 2015
and won its first Pentagon contract, also for a GPS navigation
satellite, in April 2016.
The rival venture, called United Launch Alliance, for more than
a decade had enjoyed a monopoly boosting large military satellites
into orbit before SpaceX entered the fray. Until then, the
venture's average launch costs hovered around $200 million per
mission.
United Launch still remains on top when it comes to lofting the
largest, most expensive and highest-security spy satellites and
other national-security payloads. It can cost more than $500
million to transport such satellites into space using the
heavy-lift variant of the Delta IV rocket. Last month, two senior
members of the House Armed Services Committee called on the
Pentagon to ensure continued use of the Delta IV.
But in announcing its award of the contract to SpaceX, the Air
Force's Space and Missile Systems Center also said it was making
the company eligible to compete for five additional contracts
through late 2019. That brings to 14 the total number of launch
contracts the Air Force has committed to make competitive through
that period, according to the release.
Lt. Gen. Samuel Greaves, commander of the space and missiles
center and the Air Force's senior space acquisition official, said
Tuesday's award supports the goal of "delivering resilient and
affordable space capabilities." The launch is scheduled for early
2019.
Gwynne Shotwell, president and chief operating officer of
SpaceX, said "we appreciate the confidence that the Air Force has
placed in our company."
SpaceX also is developing a more powerful rocket designed to
launch the biggest intelligence satellites, some the size of school
buses. But that rocket, the Falcon Heavy, isn't slated to fly until
later this year. It is expected to take at least several years for
Pentagon officials and leaders of the intelligence community to
become comfortable using the Falcon Heavy for cutting-edge spy
satellites, according to government and industry experts.
The Air Force said the decision to expand competitive bidding
also was intended "to allow the development of new launch
vehicles."
United Launch, which has slashed employees and otherwise cut
costs, also seeks to end its dependence on Russian engines for its
workhorse Atlas V rockets. It previously announced it was working
on a lower-cost replacement booster called Vulcan, featuring
U.S.-built main engines. Blue Origin LLC, the growing space startup
founded and run by Jeff Bezos, chairman and chief executive of
Amazon.com Inc., is the front-runner to provide those engines.
Pentagon officials have said the results of competitive bidding
between SpaceX and United Launch will depend on more than simply
price. 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.
Over the years, the Air Force has said its launch-acquisition
strategy takes into consideration factors such as booster
reliability and the impact of specific awards on the health of the
country's industrial base.
Last year, Claire Leon, a top Air Force acquisition official,
spelled out competing pressures to save money by choosing the
lower-cost competitor while complying with high-level White House
and Pentagon directives to maintain two separate launch providers.
She told an industry conference in Pasadena, Calif., that until
United Launch becomes a more agile competitor, the Air Force "may
end up needing to compete a little differently," by unilaterally
allocating certain launches.
"It's likely to be a split buy in some fashion," she said.
(END) Dow Jones Newswires
March 15, 2017 00:02 ET (04:02 GMT)
Copyright (c) 2017 Dow Jones & Company, Inc.
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