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SpaceX yoinks $96m GPS launch deal from under ULA's nose
Old monopoly crumbles as competition is introduced
The US Air Force has awarded a $96m contract to SpaceX to launch one of its next-generation GPS satellites, in a competitive contract that left the United Launch Alliance in the dust.
The launch, which must take place by April 30, 2019, will see the GPS III satellite launched from SpaceX's spaceport. As it's a low-Earth orbit mission, Elon's Musketeers should be able to land the rocket and reuse it. In return for $96,500,490 SpaceX will provide the rocket, mission control services, and launch operations.
"The competitive award of the GPS III Launch Services contract to SpaceX directly supports Space and Missile Systems Center's mission of delivering resilient and affordable space capabilities to our Nation," said Lieutenant General Samuel Greaves, Air Force program executive officer for Space and SMC commander.
This is the first time SpaceX and ULA have had a competitive bidding process for an Air Force contract. SpaceX won another GPS contract last April but the ULA – a company formed by Lockheed Martin and Boeing that has had an exclusive contract for Air Force launches for the past decade – declined to bid.
ULA said at the time that it wasn't bidding because it couldn't meet the requirements of the contract. However, its Brett Tobey, vice president of engineering, let slip in a lecture that the real reason was that ULA couldn't match SpaceX's prices – an admission that got him fired shortly afterwards. Now ULA has competed, and lost.
The problem for ULA is that it has had it too soft for too long. In the 1990s Lockheed Martin and Boeing used to compete for orbital delivery services to the military. In 2006 the two joined forces and convinced regulators to give the combined company a monopoly on military launches.
Tobey explained that ULA will typically charge the US government $125m for a launch, and that contingency fees brought the total cost up to around $200m. SpaceX, he said, would do the same job for $60m using its home-grown rocket technology.
SpaceX is able to keep costs low because it makes its entire rocketry line itself and it has been designed from the ground up to be as cost-efficient as possible. ULA sources its rocket motors from Russia and then assembles its launch vehicles in the US, and hasn't altered its designs much for years.
That is now changing. The ULA has hired two firms, Aerojet Rocketdyne and Jeff Bezos' Blue Origins, to design it a new rocket called Vulcan to fly in 2019. This will use the latest manufacturing and design techniques to lower the cost of the rocket, and free the ULA from having to pay the Russians for its engines.
But the two companies have taken a very different approach. SpaceX overfuels its rockets and then uses the spare propellant to land back on Earth – an idea Tobey called "dumb." ULA's long-term plan is for a first-stage rocket that will launch, deploy a heat shield, reenter the atmosphere, fire off parachutes, and then be caught in mid-air by a helicopter and returned to Earth. Not dumb at all.
If it does all come off, ULA's reusable rocket will fly around 2024, and in the meantime it has to compete with SpaceX while stuck with aging rocket hardware. Based on the prices displayed in this latest contract win, the ULA's business model is looking very shaky. ®
Biting the hand that feeds IT
