Bloomberg News

SpaceX’s Musk Says ULA Space Launch Monopoly a ‘Mistake’

September 29, 2011

(Updates with quotes and additional program detail beginning in second paragraph.)

Sept. 29 (Bloomberg) -- Elon Musk, chief executive officer of Space Exploration Technologies Corp., said extending a U.S. space launch “monopoly” controlled by Boeing Co. and Lockheed Martin Corp. would be a mistake.

Musk said the Air Force is “proposing to extend the sole- source monopoly” of United Launch Alliance LLC, a joint venture of Chicago-based Boeing and Bethesda, Maryland-based Lockheed, until 2018. He spoke at the National Press Club in Washington and also announced plans to develop a reusable rocket.

Awarding United Launch Alliance a block buy of future launches “would be a big mistake for the American taxpayer and also for jobs in America,” Musk told reporters afterward.

The Air Force plans a block buy strategy that will commit the Defense Department to a minimum of eight launches a year for a total of 40 through fiscal 2016, yielding a projected savings of about $830 million. The average for the past four years has been about six launches.

Jessica Rye, a spokeswoman for Centennial, Colorado-based ULA, said independent groups have studied the block buy “as being the most cost efficient method to purchase launch services,” a similar approach to satellite procurement.

ULA was formed in 2006, Rye said in an e-mail, because market conditions didn’t justify two companies with separate infrastructures competing for space launch business. The equipment has a track record of success, she said.

Flight Expertise

“Our products have five decades of flight expertise,” Rye said in the e-mail. “ULA has supported 12 critical national security and NASA launches in the past 12 months.”

ULA uses Atlas and Delta rockets to launch military and civilian satellites into space as part of the Air Force’s Evolved Expendable Launch Vehicle, or EELV, program.

President Barack Obama in his fiscal 2012 budget proposed $1.76 billion for the Air Force program, up from $1.18 billion in 2011 and $1.14 billion in 2010.

SpaceX is developing a family of rockets known as Falcon for commercial and government customers, including a Falcon Heavy designed to compete for national security business.

Major Tracy Bunko, a spokeswoman for Air Force Secretary Michael Donley, said the service will release a new acquisition strategy “in the next few weeks” aimed at controlling cost growth and promoting competition in the EELV program.

The strategy “will clearly identify the capabilities that an aspiring launch provider must demonstrate in order to be certified,” Bunko said in an e-mail. It builds on reviews recommending block buys to reduce costs and new entrant criteria developed in cooperation with NASA and the National Reconnaissance Office, she said.

“Central to this effort is our commitment to providing a level playing field to all competitors who demonstrate the ability to reliably launch EELV-class payloads,” Bunko said in the e-mail.

--Editors: Robin Meszoly, Jim Rubin.

To contact the reporter on this story: Brendan McGarry in Washington at bmcgarry2@bloomberg.net

To contact the editor responsible for this story: Steven Komarow at skomarow1@bloomberg.net


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