Fwd: SpaceX Formally Protests US Air Force's Rocket Launch Block Buy Contracts

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From: "Gary Johnson" <gjohnson144@comcast.net>
Date: April 26, 2014 10:55:11 AM CDT
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Subject: FW: SpaceX Formally Protests US Air Force's Rocket Launch Block Buy Contracts

SpaceX challenges Air Force launch contracts

04/25/2014 06:39 PM 

 

Editor's note...

05:15 PM ET, 04/25/14: SpaceX files suit over military launch contracts

Updated at 06:15 PM EDT, 04/25/14: Adding and clarifying contract details; certification required for contract award, not competition

 

By WILLIAM HARWOOD

CBS News

 

SpaceX founder and chief designer Elon Musk said Friday his company is filing a lawsuit to protest what he said were unjustified, sole-source Air Force contracts with United Launch Alliance for Delta 4 and Atlas 5 rockets used to boost high-priority military satellites into orbit.

 

"What we feel is that this is not right, that the national security launches should be put up for competition, and they should not be awarded on a sole source, uncompeted basis," he told reporters at a hastily arranged Washington news conference.

 

The lack of competition is especially galling to Musk, who said his company's Falcon 9 rocket, used to launch commercial communications satellites as well as SpaceX Dragon cargo ships to NASA's International Space Station, cost four times less than ULA's Atlas and Delta rockets.

 

"It just seems odd that if our vehicles are good enough for NASA and supporting a $100 billion space station, and it's good enough for launching NASA science satellites, for launching complex commercial geostationary satellites ... there's no reasonable basis for it not being capable of launching something quite simple like a (military navigation) satellite."

 

SpaceX currently holds a $1.6 billion contract with NASA to launch unmanned Dragon cargo ships to the International Space Station. Including that money and bookings by commercial satellite owners, SpaceX claims a launch manifest valued at some $5 billion.

 

But SpaceX has a relatively short track record, with just nine Falcon 9 rockets launched to date while United Launch Alliance, a partnership between Boeing and Lockheed Martin, has launched 70 evolved expendable launch vehicles, or EELVs.

 

Responding to similar comments from Musk during a March Senate hearing, Gen. William Shelton, head of Air Force Space Command, told the National Space Club's Florida chapter the loss of a space station resupply mission "doesn't begin to represent the catastrophic loss ... like a national security payload failure would. There's a big difference."

 

But Musk believes the Falcon 9 is up to the task and said Friday he simply wants a level playing field when it comes to competing for military EELV launches.

 

"If we compete and lose, that's fine," he said. "But why were they not even competed? That just doesn't make sense."

 

The Air Force announced plans last year to buy EELVs in bulk, instead of mission by mission, to reduce costs.

 

As originally envisioned, the multi-year "block buy" would cover 27 launch vehicles, including three Delta 4 heavy-lift variants that utilize three core stages each. By the end of the year, according to Space News, three contracts valued at nearly $2.6 billion had been announced covering 14 of those 36 rocket cores.

 

In addition, ULA holds a separate EELV Launch Capability contract believed to be valued at around $1 billion that covers the company's fixed costs, expenses not associated with a specific mission that are incurred simply by maintaining production lines and launch readiness.

 

When the original block buy was announced, the Air Force said another 14 missions would be awarded on a competitive basis. But five of those flights have since been deferred beyond the current budget horizon, another was deemed to heavy for the Falcon 9 and a seventh payload was awarded to ULA as part of the 36 core block buy commitment, according to an Air Force media roundtable in March.

 

SpaceX currently is working through a lengthy Air Force certification process that is required before the company can be awarded a military launch contract. But a company official said certification is not required to compete for a military contract.

 

Citing government budget figures, Musk said the average government cost per ULA launch is around $460 million, including $210 million for the rocket and another $250 million in payments to ULA to maintain a quick-response launch infrastructure.

 

In contrast, Musk said, a SpaceX Falcon 9 rocket lists for just $60 million while a yet-to-fly heavy-lift variant goes for around $135 million. While he expects his costs to go up by about $30 million per flight to meet Air Force mission assurance requirements, the cost per launch would still be four times less expensive than ULA's Atlas 5 and Delta 4 launches.

 

"The ULA rockets are four times more expensive than ours," he said. "So this contract is costing U.S. taxpayers billions of dollars for no reason."

 

Asked why the difference in costs was so great, Musk said "I don't know why their rockets are so expensive, they're insanely expensive."

 

He said "the reasonable thing to do would be to cancel the 36-core contract, wait a few months for (Falcon 9) certification to complete, then conduct a full competition. That would be in the best interest of the American public, not by a small margin, but by a huge one."

 

Musk also took the opportunity to criticize the use of a Russian-built RD-180 engine in the Atlas 5's first stage, citing the crisis in Ukraine and U.S. sanctions. The RD-180 is built by NPO Energomash and marketed by RD AMROSS, a partnership established in 1997 between Energomash and Pratt & Whitney Rocketdyne.

 

ULA officials have said they have enough engine components on hand to cover the next two years of Atlas operations. And RD AMROSS has a license to build the engines themselves if necessary.

 

But Musk said the RD-180 added "salt to the wound" because "the person who heads up Russian space activities is Dmitry Rogozin, who is on the (Ukraine) sanctions list. How is it that we're sending hundreds of millions of U.S. taxpayer money (to Russia) at a time when Russia is in the process of invading the Ukraine? It would be hard to imagine in some way that Dmitry Rogozin is not benefitting personally from the dollars that are being sent there."

 

For his part, Rogozin had a straight-forward answer. Apparently referring to Musk as well as an earlier Fox News story, he tweeted: "Do they think that I keep the money from sales of our engines from state enterprises for myself? Morons."

 

Mark Bitterman, a ULA spokesman in Washington, said in a statement that "we are aware of Mr Musk's press conference and are reviewing the transcript."

 

While he did not specifically address launch costs, he said ULA is proud of its record delivering national security payloads to orbit, on schedule and without any failures.

 

"The block buy contracting process was formally started in late 2011, with proposals delivered in 2012, and final contract signed in 2013. The DOD robust acquisition and oversight process and ULA improved performance enabled over $4 billion in savings as compared to prior acquisitions approaches.

 

"ULA recognizes the DOD plan to enable competition and is ready and willing to support missions with same assurance that we provide today."

 

© 2011 William Harwood/CBS News 

 

 

SpaceX Formally Protests US Air Force's Rocket Launch Block Buy Contracts

By Mike Gruss and Dan Leone, SpaceNews   |   April 25, 2014 04:40pm ET

Spacenews

 

This story was updated at 4:14 p.m. ET.

 

WASHINGTON — Space Exploration Technologies Corp. is filing a formal protest in the U.S. Court of Federal Claims over a multibillion-dollar U.S. Air Force contract to its incumbent launch services provider, United Launch Alliance, SpaceX founder and Chief Executive Elon Musk announced Friday (April 25).

 

In December, Denver-based ULA and the Air Force reached contractual terms for the first batch of rockets in a long-awaited bulk purchase, one the service said is the heart of its strategy for saving money on its overbudget launch services program. 

 

Original plans for the block buy called for the Air Force to buy 36 rocket cores from ULA on a sole-source basis while putting another 14 missions for bid, thereby giving so-called new entrants such as SpaceX a crack at the market. The new entrants first must earn certification to launch national security missions, which in SpaceX's case is expected in late 2014 at the earliest. [The Rockets and Spaceships of SpaceX (Photos)]

 

The Air Force recently deferred roughly half of the missions to be competitively awarded, this after ordering the first batch of rocket cores from ULA, currently the sole provider under the service's Evolved Expendable Launch Vehicle program. As such, ULA has enjoyed a virtual lock on the U.S. national security launch market.

 

In recent weeks, Musk, along with SpaceX supporters in Congress, have pushed the Air Force to rethink the block-buy strategy. By filing the claim — one of several ways to protest a contract — SpaceX will now receive a judicial review of Air Force's decision. The court has the power to issue an injunction that would at least temporarily stop the block buy in its tracks.

 

"This is not SpaceX protesting and saying that these launches should be awarded to us," Musk said in a press conference here. "We're just protesting and saying that these launches should be competed."

 

Specifically, Musk said, Hawthorne, Calif.-based SpaceX is protesting only a share of the rockets — those which it currently has the ability to launch. That effectively exempts a number of missions, including any that would be launched on ULA's Delta 4 Heavy rocket. 

 

SpaceX recently acknowledged that it currently is capable of launching 60 percent of Air Force missions, a figure that is expected to climb to 100 percent once the company's planned Falcon Heavy rocket is up and operating.

 

The timing of the suit is curious given the fact that the Air Force began ordering the rockets in question in December, information that the Pentagon disclosed at the time.

 

"We actually only learned about the big sole-source award in March," Musk said. The contract "may have been signed in December, but it only came to light, interestingly, only one day after the Senate hearing on EELV launch costs. I don't think that's an accident. We've really just had about a month of awareness. We've been somewhat reeling from that news."

 

Gen. William Shelton, commander of Air Force Space Command, has insisted that the service has already locked in $4.4 billion in savings through the block-buy strategy, but that figure has been greeted with skepticism in some quarters. 

 

Nonetheless, canceling the existing contract would be expensive. In an April 3 hearing of the House Armed Services strategic forces subcommittee, a Defense Department official estimated that the cost would be at least $370 million.

 

In addition, scrapping the block buy would force the Defense Department to negotiate on a mission-by-mission basis for access to space, thereby driving up costs on a per-launch basis, officials said. 

 

Elon Musk has recently won support from key lawmakers in his quest for the chance to compete for more launches.

 

Tom Mentzer, a spokesman for Sen. Dianne Feinstein (D-Calif.), who chairs the Senate Select Committee on Intelligence, has said the senator believes any launch that a new entrant is capable of performing "should be competed as soon as possible."

 

In an April 25 email, Mark Bitterman, ULA's vice president of government affairs and communications, said the company was reviewing the transcript of the press conference. 

 

"ULA is proud and focused on supporting the AF EELV Program for the Department of Defense missions that assure that critical capabilities are delivered to space successfully on schedule," he said. "The block buy contracting process was formally started in late 2011, with proposals delivered in 2012, and final contract signed in 2013. The DOD robust acquisition and oversight process and ULA improved performance enabled over $4 billion in savings as compared to prior acquisitions approaches. ULA recognizes the DOD plan to enable competition and is ready and willing to support missions with same assurance that we provide today."

 

This story was provided by SpaceNews, dedicated to covering all aspects of the space industry. Follow Mike Gruss on Twitter @Gruss_SN and Dan Leone @Leone_SN.

 

TechMedia Network  Copyright © 2014 All Rights Reserved.

 

 

US Air Force rocket buy sparks lawsuit by aspiring contender SpaceX

By Irene Klotz

 

CAPE CANAVERAL, Fla. April 25 (Reuters) - Space Exploration Technologies, the privately held company known as SpaceX, said on Friday it filed a lawsuit to protest the U.S. Air Force's award of a multi-billion-dollar, non-compete contract for 36 rocket launches to a partnership of two long-time aerospace contractors.

 

The contract, announced earlier this year, "essentially blocks companies like SpaceX from competing for national security launches," SpaceX Chief Executive Elon Musk said at a press briefing in Washington, D.C., that was also broadcast on a conference call.

 

SpaceX, which manufactures and launches rockets and spacecraft, is in the process of getting its Falcon 9 rockets certified to fly payloads for the U.S. military.

 

The company wants the Air Force to reverse the sole-source award of 36 boosters to United Launch Alliance, a partnership of Lockheed Martin and Boeing, and open the procurement to commercial competition.

 

"SpaceX is not saying that these launches should be awarded to us," Musk said. "We're just protesting and saying that these launches should be competed. If we compete and lose, that's fine, but why were they not even competed? That just doesn't make sense."

 

SpaceX Falcon 9 rockets already fly cargo ships to the International Space Station, a $100 billion research laboratory that flies about 260 miles (418 km) above Earth, and launches commercial communications satellites into high-altitude orbits.

 

So far, the Air Force has certified one of three Falcon flights required before SpaceX can compete for military missions.

 

Musk said he expects SpaceX to be able to fly military payloads for around $100 million apiece -- about one-quarter the price the United States pays for rides on United Launch Alliance's Atlas and Delta rockets.

 

"The ULA rockets are basically about four times more expensive than ours, so this contract is costing the U.S. taxpayers billions of dollars for no reason," Musk said.

 

The lawsuit comes amid growing controversy about the use of the Russian rocket engines and the Air Force's slow progress toward a more competitive market for rocket launches.

 

Air Force Secretary Deborah James told lawmakers earlier this month that she was committed to moving toward competition, but it was important to ensure that SpaceX and other new entrants to the market could safely launch critical national security satellites, which often cost $1 billion or more to build.

 

Musk also raised questions about the U.S. government's contract with United Launch Alliance in light of the sanctions imposed by the United States to protest Russia's invasion of Ukraine's Crimea peninsula. Musk noted that the United Launch Alliance's Atlas rocket uses Russian-made RD-180 engines, while the individuals who are the subject of the U.S. sanctions include Dmitry Rogozin, Russia's deputy prime minister who is also the head of the country's space program.

 

"How is it that we're sending hundreds of millions of U.S. taxpayer money at a time when Russia is in the process of invading Ukraine?" Musk said. "It would be hard to imagine some way that Dmitry Rogozin is not benefiting personally from the dollars that are being sent there."

 

An ongoing review of the RD-180 engine issues was on track to conclude by May 1, the Air Force said.

 

The Air Force had no immediate comment on SpaceX's lawsuit, which was filed in the U.S. Court of Federal Claims.

 

A spokesman for United Launch Alliance, Mark Bitterman, said the partnership was reviewing the transcript of Musk's press conference.

 

Bitterman said the "robust acquisition and oversight process" of the Department of Defense and the partnership's "improved performance" has resulted in more than $4 billion in savings, compared to prior acquisitions processes.

 

SpaceX also announced on Friday that the Falcon 9 rocket used to put a Dragon cargo ship into orbit for NASA last week made a successful touchdown on the Atlantic Ocean, before high seas destroyed the booster.

 

The company is working on technology to land and refly its rockets in an attempt to cut launch costs further.

 

SpaceX plans to make another water landing when it flies a network of communication satellites for Orbcomm next month.

 

(Reporting by Irene Klotz in Cape Canaveral, Fla.; Additional reporting by Andrea Shalal in Washington; Editing by Leslie Adler)

 

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