Air Force Certifies SpaceX for Missions, Ends Launch Monopoly

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The U.S. Air Force has certified Space Exploration Technologies Corp. to launch military satellites, ending a Lockheed Martin Corp.-Boeing Co. joint venture’s decade-long monopoly on the business.

The decision, announced late Tuesday, is a significant win for the start-up rocket-maker, known as SpaceX and headed by billionaire Elon Musk, and a loss for the joint venture, called United Launch Alliance LLC.

“This is an important step toward bringing competition to National Security Space launch,” Musk said in a release. “We thank the Air Force for its confidence in us and look forward to serving it well.”

Air Force Secretary Deborah Lee James hailed the approval as an “important milestone” for both the service and Defense Department, which blessed the 2006 creation of a sole supplier for its launch needs.

“SpaceX’s emergence as a viable commercial launch provider provides the opportunity to compete launch services for the first time in almost a decade,” she said in the release. “Ultimately, leveraging of the commercial space market drives down cost to the American taxpayer and improves our military’s resiliency.”

The certification process was overseen by Lt. Gen. Samuel Greaves, commander of the Air Force Space and Missile Systems Center and the service’s executive officer for space. The effort took two years, cost more than $60 million and involved 150 people and several hundred audits.

As a result, SpaceX’s Falcon 9 rocket is now certified to launch national-security satellites under the Evolved Expendable Launch Vehicle, or EELV, program. The firm will be eligible to compete for missions as early as June, when the Air Force is expected to release a request for proposals to launch its GPS III satellite. It sells for about $60 million per launch, though the price would be higher for military missions because of the additional requirements.

“The SpaceX and SMC teams have worked hard to achieve certification,” Greaves said in the release. “Our intent is to promote the viability of multiple EELV-class launch providers as soon as feasible.”

Musk and his company led a bruising campaign against ULA for its high cost of launch and use of Russian technology. The latter criticism found an increasingly receptive audience in the Pentagon and on Capitol Hill last year after pro-Russian forces invaded and took over Crimea in Ukraine.

ULA hit back, charging SpaceX with instigating an imbroglio between the U.S. and Russia over the sale of RD-180 rocket engines, GPS satellites and even missions to the International Space Station. It also changed leadership at the top, with Tory Bruno replacing Michael Gass as chief executive officer.

SpaceX, meanwhile, also challenged the Air Force for its unique relationship with ULA. The company sued the service over a contract it awarded to the joint venture for a so-called “bulk-buy” of 36 cores — the main part of a rocket including the engine — through 2017. SpaceX later dropped its complaint after the Air Force pledged to open more launches to competition.

While ULA’s Bruno has said he welcomes the arrival of a competitor in the military market, he has warned of a coming slump in defense launches. He has also said to remain viable ULA will need more commercial and civilian deals, as well as approval from Congress to buy more Russian-made RD-180 engines until a domestic alternative is ready.

ULA’s planned Vulcan rocket would use a reusable engine called the BE-4, developed by Blue Origin LLC, owned by Amazon.com-founder Jeff Bezos. It could also use the AR-1, a liquid oxygen and kerosene-fueled propulsion system being developed by Aerojet Rocketdyne. It would sell for less than $100 million be ready for missions in 2019.

About the Author

Brendan McGarry
Brendan McGarry is the managing editor of Military.com. He can be reached at brendan.mcgarry@military.com. Follow him on Twitter at @Brendan_McGarry.
  • Dfens

    One more case where the blatant insanity of the military's "cost plus award fee" has come to light. The military provides their defense contractors $1.10 for every dollar they spend, and then they can't figure out why their vehicles take so long to be designed and why the costs go so high. Is there anyone that doesn't understand the fact that the military is inviting defense contractors to spend themselves rich with this kind of contract? Who else besides the US government ever uses a contract like this? Why do we allow the people who spend our money to do it this stupidly? Clearly when a company has something of their own to risk in designing a vehicle, they have an incentive to do a better job and to keep costs in check. We call ourselves capitalists, but we don't even know what capitalism is anymore.

    • guester

      Most of this activity would be a FFP contract, rather than cost plus.

      • Dfens

        What difference does that make? The work is already done. ULA designed their rockets under "cost plus award fee" contracts and they are expensive. SpaceX developed their rocket using their own funds and some grant money that they were able to get based on the success of some of their earlier privately funded efforts. It's two completely different approaches to funding. One, the way the military usually funds it's programs, is a demonstrated disaster. The other, which is the one used commercially all over this great nation, is a success. If you don't provide a company a profit incentive to fail, they tend to succeed. What a surprise.

      • rockyscj

        Dfens that was a great response.

  • LDC

    The USAF effort to certify SpaceX took two years, took 150 people, conducted several hundred audits, and cost $60 million. This is nuts! Elon Musk complained about having to raise prices for government launches. To build a better rocket? No, to pay the accountants and administration personnel to generate the mountain of paperwork to satisfy the "additional requirements" of a bloated government bureaucracy. At last count, Kelly Johnson was spinning at 30,000 rpm's.

  • Brian B. Mulholland

    I'm surprised he's gotten this far, but now that he has, watch ULA lose as much money as necessary in order to squeeze him back out. The last thing they want is competition and the AF doesn't really want it either.

  • Super Tex

    Space X rockets cost 1/3 to 1/4 of what United Launch Alliance was charging. This is a good thing for the taxpayer. To bad Space X isn't in the fighter building business.

    • Dfens

      If they were in the fighter business, they'd design fighters under a contract that pays them more if they drag the design out as long as possible and pays them more if they jack prices as high as possible. You think SpaceX would perform any differently from any other "for profit" company under those circumstances? They might for a little while. Of course, if we were thinking people, which apparently we aren't, we'd put a stop to these profit incentives for failure. Or we could cancel the F-35, be out $200 billion of which Lockheed skimmed $20 billion, write off the whole experience without holding anyone accountable, and move on to the next disastrous fighter program which Lockheed will also most likely win. Oh, and don't forget the billions of dollars in cancellation fees Lockheed will get if we choose that brilliant approach.

  • Brian B. Mulholland

    From your mouth to God's ears.

  • torquewrench

    Obama administration approves federal contracting with firm owned by major Obama political contributor. Film at eleven.

    • Dfens

      Maybe you should check into the amount of money "donated" to the major parties by Lockheed and Boeing — the always ethical companies.

  • Jason

    You are way behind the times. The Military no longer uses "Cost Plus" contracting. It's now only used in RTD&E Programs.

    • Dfens

      The military no longer uses "cost plus" contracting at all.

  • oblatt23

    The monopoly is dead long live the duopoly.

    Its long established practice in monopoly industries to let a junior partner live to provide political cover against price gouging. SpaceX will get some scraps as Lockheed continues to defraud the American taxpayer with cost plus contracts.

    Just watch the launch prices now go up !

    • Dfens

      Cost plus contracts went away in the early 1990's.