SpaceX has announced it will drop its suit against the U.S. Air Force. Founder Elon Musk, shown at a May 29 event, had complained about the military’s bidding process on a recent contract. (Robyn Beck/AFP/Getty Images)

SpaceX, Elon Musk’s startup space company, announced late Friday that it would drop its lawsuit against the Air Force protesting the award of a lucrative contract to launch military satellites.

In a joint statement, the Air Force and SpaceX said that the California-based company agreed to drop the suit because the Air Force “has expanded the number of competitive opportunities for launch services.”

SpaceX filed the suit in the Court of Federal Claims last spring, arguing that the contract, which was awarded to the United Launch Alliance, should have been competitively bid.

The announcement comes after months of acrimony between the parties. Musk, the billionaire founder of Tesla and PayPal, had accused the Air Force of improperly awarding a sole-source contract and said it was taking too long to certify his company for the launches.

SpaceX had hoped that it would be certified by the end of last year. But earlier this month, the Air Force said that was not likely to happen until the middle of this year.

In an interview with Bloomberg Business Week, Musk accused military procurement officials of holding up the certification to curry favor with the ULA, the joint venture of defense contracting giants Lockheed Martin and Boeing.

“Essentially we’re asking them to award a contract to a company where they are probably not going to get a job, against a company where their friends are,” he said. “So they’ve got to go against their friends, and their future retirement program. This is a difficult thing to expect.”

Air Force Secretary Deborah Lee James called his remarks “rather unfortunate.” And she said the service was working diligently to get SpaceX certified for the launches. She also appointed retired Gen. Larry D. Welch, a former chief of staff, to lead an independent review of the certification process, which would explore whether there are “ways that we can streamline, speed it up, do things a little bit differently.”

In the joint statement, the parties said that “under the agreement, the Air Force will work collaboratively with SpaceX to complete the certification process in an efficient and expedient manner.”

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

SpaceX, once considered a small but feisty startup, has recently scored some major victories in an industry long dominated by traditional players. It was the first commercial company to resupply the International Space Station. And it also won a major contract from NASA last year to ferry astronauts to the space station.

It also has attracted attention for pushing the envelopes of space travel. And next week it plans once again to try to land a rocket booster on a floating barge. If successful that could be a significant step toward developing reusable rockets, which could vastly decrease the costs of space flight.