SpaceX threatens US Air Force with court action over rocket contract

Gurjit Degun
29 April 2014

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29 April 2014 | Gurjit Degun

Spacecraft manufacturer SpaceX has taken legal action over a contract between the US Air Force and the United Launch Alliance (ULA), a joint venture of Boeing and Lockheed Martin.

The long-term deal involves the Evolved Expendable Launch Vehicle (EELV) designed to improve access to space by making vehicles more affordable and reliable. The agreement guarantees the purchase of around 35 rocket cores from ULA to be used in national security launches.

According to SpaceX, the contract was awarded on a sole source basis “without any competition from other launch providers”. SpaceX believes it can provide launch services at an estimated cost savings of 75 per cent.

The company said it is seeking a legal determination that would “open certain launches under the sole-source contract to competition”. It has filed an official protest document with the US Court of Federal Claims in Washington DC yesterday.

“This exclusive deal unnecessarily costs US taxpayers billions of dollars and defers meaningful free competition for years to come,” said Elon Musk, CEO and chief designer at SpaceX. “We are simply asking that SpaceX and any other qualified domestic launch providers be allowed to compete in the EELV program for any and all missions that they could launch.

“EELV is the fourth largest procurement program in the entire Department of Defense (DoD) budget, and it has been plagued by significant and sustained cost breaches. DoD officials have reported that EELV has exceeded its original estimated per unit cost by 58.4 per cent. Each launch by ULA costs American taxpayers roughly $400 million (£240 million) per launch – four times as much as a launch by SpaceX.”

A statement from the ULA said: “ULA is the only government certified launch provider that meets all of the unique EELV requirements. That is the case today, when the acquisition process started in 2012 and at the time of the contract award in December 2013.    

“The recent five-year block buy contract was the result of a best practice acquisition process that enabled the government to negotiate a block of launches in advance that enabled significant operations efficiency and created the needed stability and predictability in the supplier and industrial base, while meeting national security space requirements. 

“This disciplined approach saved the government and taxpayers approximately $4 billion (£2.4 billion) while keeping our nation’s assured access to deliver critical national security assets safely to space.”

The US Air Force declined to comment on the legal action.

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