A Pentagon watchdog agency plans to review the certification the Air Force granted SpaceX to launch national security satellites, a key source of revenue for the company founded by Elon Musk.
The move comes three years after SpaceX and the Air Force settled a lawsuit that ultimately led to the Air Force granting the company the certification. SpaceX had argued it should be given the right to compete against the United Launch Alliance, a joint venture of Lockheed Martin and Boeing, for the lucrative launch contracts. At the time, the ULA had held a virtual monopoly on the contracts for about a decade.
In a letter to Air Force leaders, the Defense Department’s inspector general said its “objective is to determine whether the U.S. Air Force complied with the Launch Services New Entrant Certification Guide when certifying the launch system design for the Evolved Expendable Launch Vehicle-class SpaceX Falcon 9 and Falcon Heavy launch vehicles.”
A spokesperson for the inspector general said the review was a “self-initiated project” and "one of the key projects in the OIG’s expanding oversight focus on the Department of Defense’s space, missile defense, and nuclear management challenges.”
SpaceX did not respond to a request for comment. An official with knowledge of the company’s thinking, who spoke on the condition of anonymity, said that SpaceX was surprised by the announcement of the inspector general’s review and doesn’t know what prompted it. Bloomberg News first reported the review.
For years, SpaceX waged a high-profile campaign to be able to compete for the launch contracts, waging a David vs. Goliath war against two of the biggest military contractors in the world. Musk accused military officials of trying to curry favor with the ULA, which he said was trying to put him out of business. SpaceX also fought in court, saying it should be able to compete for the launches, which it had identified as a key revenue source.
In 2014, Musk told reporters that “Lockheed and Boeing are used to stomping on new companies, and they certainly tried to stomp on us. . . . We’re certainly a small up-and-comer going against giants.” ULA, in turn, had accused SpaceX of trying to “cut corners" and pressuring the Air Force to “rubber stamp” its rocket, which it called a “dangerous approach.”
ULA replaced its chief executive with Tory Bruno, a longtime space industry executive, who vowed at the time his job was to “literally transform the company” to compete with SpaceX.
Then-Air Force Secretary Deborah Lee James appointed a former high-ranking Pentagon official to lead an independent review of the certification process, which she said at the time would explore whether there are “ways that we can streamline, speed it up, do things a little bit differently.”
For years, there has been a significant culture clash between SpaceX, the hard-charging company with a Silicon Valley ethos, and the more bureaucratic Pentagon office. “There’s always tension there,” a former senior defense official said.
In 2015, the Air Force and SpaceX settled the lawsuit, and the Air Force granted SpaceX certification for its Falcon 9 rocket, allowing it to compete against ULA, the only other company that holds a certification. Since then, SpaceX has won five missions to launch GPS satellites and has completed one of those..
The Falcon 9 has flown 66 successful missions, and has had two failures, once while launching cargo to the International Space Station for NASA, the other while on the launchpad before an engine test. By the time it was certified, the rocket had flown 18 times, and officials said it had gone through a lengthy certification process.
The Air Force has said introducing competition into the launch procurements helped the agency get a much better price. Given the value of the contract awards — single launches can be worth more than $100 million — “there is a lot of pressure,” said a former senior defense official. “It’s big business.”
Last year, the Air Force certified another of SpaceX’s rockets, the more powerful Falcon Heavy, which can lift even heavier payloads to orbit. It was certified after a single flight, meaning SpaceX would have been required to give the Air Force “a ton of data,” the official said. Still, “that probably did raise eyebrows,” the official said.
Late last year, the Air Force awarded three major contracts, worth more than $2 billion combined, to help companies develop their rockets for future national security missions. ULA, Northrop Grumman and Blue Origin each won contracts. SpaceX did not. (Blue Origin is owned by Jeffrey P. Bezos, who also owns The Washington Post.)
The Pentagon has said it would only pick two companies to provide launches for that next round of missions. SpaceX has led a lobbying campaign on Capitol Hill, according to multiple industry and congressional officials, arguing it is at a disadvantage for the future launch contracts because it did not win any of the rocket development money.
The Pentagon’s review comes after NASA said it was launching a separate review of the safety cultures of SpaceX and Boeing, the companies the space agency has hired to fly its astronauts to the International Space Station. That review was prompted after Musk smoked marijuana on a podcast streamed on the Internet.