SpaceX Launches Lawsuit Against Air Force Over Rocket Contracts

By Ben Wolford on April 27, 2014 2:39 PM EDT

Rocket company SpaceX announced it was suing the U.S. Air Force over what it calls an unfair contract bidding process. (Photo: SpaceX)
Rocket company SpaceX announced it was suing the U.S. Air Force over what it calls an unfair contract bidding process. (Photo: SpaceX)

It's just Elon being Elon. The billionaire head of rocket company SpaceX, Elon Musk, announced plans to sue the U.S. Air Force over what he sees as a monopoly on rocket cores that the Pentagon has awarded to Lockheed Martin and Boeing.

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The company intends to file the suit Monday in the Court of Federal Claims in Washington, D.C., so the actual complaint is not available yet. But, fittingly, they've created a website called Freedom To Launch, which as of this writing was counting down, lift-off style, to the complaint's release. "If we compete and lose, that is fine," Musk was quoted in Businessweek as saying at the National Press Club in Washington. "But why would they not even compete it?" He added: "This contract is costing U.S. taxpayers billions of dollars for no reason."

Since its founding in 2002, SpaceX has become one of the highest-profile private spacecraft manufacturers. In 2008 it won a NASA contract to supply the International Space Station, the first private company to do it. Now it wants to build on its success with NASA by flying defense satellites into space for the military.

It can't, however, because United Launch Alliance (ULA), a joint-venture of Boeing and Lockheed Martin, already has a $70 billion long-term contract for 36 rocket cores. SpaceX says the two companies were awarded the contract — the fourth largest in the Defense Department's budget — without any competitive bidding process. SpaceX also says it can launch those rockets much more cheaply. "Each launch by ULA costs American taxpayers roughly $400 million per launch — four times as much as a launch by SpaceX," the company said in its statement.

Musk, a South African native who was also the founder of PayPal, politicized the lawsuit by pointing out that the engines inside United Launch Alliance's rockets are made in Russia. "In light of international events, this seems like the wrong time to send hundreds of millions of dollars to the Kremlin," Musk said. "Yet, this is what the Air Force's arrangement with ULA does, despite the fact that there are domestic alternatives available that do not rely on components from countries that pose a national security risk."

The Washington Post reported that "it's a question of reliability versus cost" and that Musk was "throwing his biggest potential customer" — the Pentagon — "under the bus." It's true that SpaceX has fumbled in the past to launch its rockets, as when technical glitches delayed the launch of a commercial satellite in November and December. They aborted the launch several times at the last minute. "Better to be paranoid and wrong," Musk tweeted at the time.

But they've never had a failed mission, and NASA seems happy with its contracts with SpaceX and other non-Boeing-or-Lockheed companies. That includes Sierra Nevada Corp., which plans to launch its shuttle-like transporter, Dream Chaser, in 2016. "NASA's been fantastic to work with and really has helped us a lot," Musk said, according to Businessweek. "In fact, I'm not sure we'd even be where we are today without the help of NASA. We're very grateful."

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