Feud between SpaceX and ULA over space contract grows more intense


Billionaire Elon Musk speaks at an event in this 2012 file photo. The fight between Musk’s SpaceX and two of the nation’s largest defense contractors has become entangled in an international dispute that could jeopardize the U.S.’s ability to get its astronauts to the International Space Station. (Duane A. Laverty/AP)

It started as a high-profile attempt to win a bigger share of the military space market.

Elon Musk, the billionaire entrepreneur, sued the federal government claiming his start-up space company had been shut out of a lucrative military rocket contract. High-profile members of Congress, including Sen. John McCain (R-Ariz.), rallied to his cause. An injunction was issued, then lifted.

But now the fight between Musk’s SpaceX and two of the nation’s largest defense contractors has become entangled in an international dispute that could have even wider implications and jeopardize the United States’ ability to get its astronauts to the international space station.

This week, Russian Deputy Prime Minister Dmitry Rogozin said he would prohibit the export of Russian-made engines used in many U.S. rocket launches. That could eventually cause a disruption in how the Pentagon sends military satellites into orbit.

And it plays into the hands of Musk, who is arguing that the nation’s security interests in space shouldn’t be dependent on the Russians.

The contract for launching military satellites is currently held by United Launch Alliance, a joint venture of Lockheed Martin and Boeing, which uses the Russian-made engines in its Atlas rockets. SpaceX sued the federal government last month in protest of the Air Force’s decision to award that business to ULA without competition.

The multibillion-dollar contract is for 36 rockets to launch defense payloads, including satellites.

Musk, the co-founder of PayPal and Tesla Motors, claimed that SpaceX could deliver military satellites to space far more cheaply. Musk called for the Air Force to cancel the contract and give SpaceX time to complete the required certification process.

Musk also argued that ULA’s use of the Russian-made RD-180 engines could violate U.S. sanctions. Within days of the suit being filed, U.S. Court of Federal Claims Judge Susan G. Braden issued an injunction, prohibiting ULA from buying the Russian engines. She ultimately lifted the injunction after several government agencies said the Russian manufacturer was not subject to the sanctions.

But then Rogozin told reporters that the government would not allow the delivery of the engines for use in military launches. He also threatened to end Russia’s cooperation with the United States on the space station after 2020.

In a statement, ULA said it was unaware of the Russian export ban but said that, if true, “it affirms that SpaceX’s irresponsible actions have created unnecessary distractions, threatened U.S. military satellite operations, and undermined our future relationship with the International Space Station.”

The company said it has contingency plans, including a two-year inventory of engines, which “would enable a smooth transition to our other rocket, Delta, which has all U.S.-produced rocket engines.”

McCain, a staunch critic of many of the Pentagon’s procurement programs, wrote to the Air Force’s inspector general, urging him to investigate the program, saying that “without competition [it] has been plagued by exponential cost growth and schedule delays.”

ULA has said that it is the only company certified to meet all the Pentagon’s requirements. The company said it has performed dozens of successful launches and that its recent contract saves the government about $4 billion.

Given the stakes involved — the Pentagon expects to spend almost $70 billion on the program by 2030 — Marco Caceres, a senior analyst at the Teal Group, said he was not surprised that Musk “is playing hardball.”

“There’s a lot at stake,” he said. “These contracts are very lucrative.”

But, Caceres said, there could be other implications. The United States depends on Russia to take its astronauts to the space station. And if Russia decided it would no longer do that, it “could become a political nightmare,” he said. “Certainly it would be an embarrassment for the United States if there are no Americans on the space station.”

Michael O’Hanlon, a senior fellow at the Brookings Institution, said that while the tensions over space would have short-term implications, the United States has the ability “to avoid dependence on Russia.”

“If U.S.-Russia space cooperation becomes a casualty, that’s going to have enduring effects for years and decades,” he said. “To be blunt, over the long term, they need us more than we need them.”

Rogozin recently alluded to the possibility of ending the agreement to ferry U.S. astronauts to the space station, tweeting: “After analyzing the sanctions against our space industry, I suggest the U.S. delivers its astronauts to the ISS [international space station] with a trampoline.”

In response, Musk tweeted about the ship SpaceX is developing that would allow it to carry passengers, and not just cargo, into space.

“No trampoline needed,” he wrote.

Christian Davenport covers federal contracting for The Post's Financial desk. He joined The Post in 2000 and has served as an editor on the Metro desk and as a reporter covering military affairs. He is the author of "As You Were: To War and Back with the Black Hawk Battalion of the Virginia National Guard."
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