Elon Musk’s SpaceX to sue government over space launch contract


CEO and chief designer of SpaceX Elon Musk speaks at the 2014 annual conference of the Export-Import Bank (EXIM in Washington, DC. (Alex Wong/Getty Images)

Elon Musk, the business mogul who dreams of colonizing Mars, wants a bigger piece of the space market, and he’s willing to sue his biggest potential customer to get it.

SpaceX, his California-based rocket company, announced Friday that it plans to file a lawsuit protesting the award of a lucrative space contract by the Air Force, saying it should have been competitively bid.

Speaking before reporters at the National Press Club, Musk, the entrepreneur who co-
founded PayPal and Tesla Motors, said SpaceX could provide rockets to launch into space for considerably less money than United Launch Alliance (ULA), a joint venture of Lockheed Martin and Boeing, which won the sole source award in December.

The multibillion-dollar contract is for 36 rockets to launch defense payloads, such as satellites, into space. By 2030, the Pentagon expects to spend almost $70 billion on the program.

“This is not SpaceX protesting and saying these launches should be awarded to us,” Musk said. “We’re just saying these launches should be competed. If we compete and lose, that’s fine. But why would they not even compete it? That doesn’t make sense.”


SpaceX, a key entrepreneurial player, wants to make getting into space a much easier proposition.

SpaceX’s rockets are not qualified for the mission, but he said the company is navigating the Air Force’s certification process, which he called a “paperwork exercise.” And Musk called for the Air Force to cancel and rebid the contract.

“Since this is a large, multiyear contract, why not wait a few months for the certification process to be completed, and then do the competition?” he said.

Air Force officials did not respond to requests for comment.

In a statement, ULA said that it was “proud and focused on supporting” the program, and that the Pentagon’s “robust acquisition and oversight process and ULA improved performance enabled over $4 billion in savings as compared to prior acquisitions approaches.”

At a Senate hearing last month, Michael Gass, ULA’s chief executive, said that his company’s Atlas V and Delta IV rockets “are the most powerful and most reliable in the world. They are the only rockets that fully meet the unique and specialized needs of the national security community.”

The company was supported by Sen. Richard C. Shelby, a Republican from Alabama, where ULA assembles its engines, who praised ULA for launching 68 successful missions.

“I believe we must ensure that the program’s record of success is maintained,” Shelby said at the hearing. “And while the goal of competition is to lower the cost of access to space, which I think is good, combined with the need to maintain performance and reliability, such as we have today, competition may not actually result in a price reduction for the federal government.”

Scott Pace, director of the Space Policy Institute at George Washington University, said that given the complexity of launching national security satellites into space, the government isn’t just interested in the low bidder.

“The government has stressed the importance of reliability. Launching a satellite payload, particularly a national security payload, is something that really, really has to work. It cannot fail,” he said. “That focus on mission assurance is something the government has prioritized over cost alone.”

But Musk said his rockets are reliable and proven, as well as cost efficient. He said his company could have delivered the contract to the Defense Department for $1 billion less per year.

SpaceX has a $1.6 billion contract with NASA to fly resupply missions to the international space station.

“It just seems odd that if your vehicle is good enough for NASA . . . there is no reasonable basis for it not being capable of launching something quite simple like a GPS satellite,” Musk said. “This doesn’t seem right to us.”

Musk also criticized ULA for using Russian engines in some of its rockets, which he said was possibly a violation of U.S. sanctions and unseemly at a time when Russia “is the process of invading Ukraine.”

SpaceX plans to file the protest by Monday at the Court of Federal Claims. Musk said that even though the contract was signed in December, he was not aware of it until March.

“The contract was negotiated and executed outside of public view and has never been made public,” the company said in a statement.

Musk said that company officials tried to discuss its concerns with the Air Force but ultimately decided it had no choice but to file the suit.

Christian Davenport covers federal contracting for The Post's Financial desk.
Brian Fung covers technology for The Washington Post.
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