Does SpaceX’s Lawsuit Come Down to 6 or 7 Launch Contracts?

Lt Gen Ellen Pawlikowski, Space and Missile Systems Center commander, signed agreements with Space-X CEO Elon Musk, Jun 7, 2013 at the Space-X facility in Hawthorne, Calif. (Credit: USAF/Joe Juarez)
Lt Gen Ellen Pawlikowski, Space and Missile Systems Center commander, signed agreements with Space-X CEO Elon Musk, Jun 7, 2013 at the Space-X facility in Hawthorne, Calif. (Credit: USAF/Joe Juarez)

During his press conference on Friday, Elon Musk made a rather odd claim when asked why he waited to late April to file an appeal on the U.S. Air Force’s decision to award a 36-core launch contract to ULA back in December. Marcia Smith succinctly summarizes Musk’s answer and why it’s wrong:

He replied that although it was awarded in December, he did not know about it until March, specifically the day after the March Senate Appropriations Committee hearing.  He said he did not think it was “an accident” that it only became public at that time.

The contract award was posted on the FedBizOpps website on December 19, 2013, however, and written up in trade publications soon thereafter.  SpaceX has not replied to an email requesting clarification on what it was that the company did not know until March.

The day after the Senate hearing DOD officials did reveal in a budget briefing that the number of launches it is setting aside specifically for “new entrants” like SpaceX would be fewer than earlier planned over the next few years.  Those launches are in addition to the 36 launches in the December contract, however.

So, it’s inconceivable that Musk didn’t know about the bulk buy contract for three months. Everyone else did. The U.S. Air Force did nothing to hide it. The more important matter is the number of competitive launches the Air Force set aside.

So, what was the big change there? Space News reports that the Air Force initially announced that it would set aside 14 launches between 2015 and 2017 for competitive bidding. However, that number was reduced to seven opportunities for that time period, with an eight that “may become available for competition in the relative near term.” Competitive bidding on five additional launches would be delayed until after 2017.

The reduction in the number of competitively awarded Air Force launches is driven in part by a planned slowdown in procurement of GPS 3 navigation satellites beginning in 2015, primarily because earlier-generation GPS satellites are lasting longer in orbit than expected. Delays in the GPS 3 program also are a factor.

SpaceX has tried to get this decision reversed through political channels, with a group of seven Senators protesting the decision in an April 1 letter to Defense Secretary Chuck Hagel. On Friday, Sen. John McCain joined the fray, requesting that Department of Defense Inspector General Jon T. Rymer launch an investigation into the ULA bulk buy agreement.

A reduction of six or seven competitively bid launches over two years with five deferred beyond 2017 doesn’t seem like a lot. Especially given that SpaceX has dozens of satellites already on its manifest, a launch schedule that has consistently slipped to the right, and no regular rhythm as yet in the missions it does launch.

However, Musk didn’t get where he is by meekly accepting business setbacks. So, it was probably inevitable that he would fight for every opportunity to bid on military contracts.

Looking at it from the U.S. Air Force’s point of view, the military needs extremely high reliability and a consistent schedule above all else for its launches; cost is a secondary consideration. It wouldn’t be surprising if the military is looking at SpaceX’s record to date and is encouraged by Falcon 9’s reliability, but is worried whether the company has the bandwidth to reliably ramp up production and launch rates while delivering missions on schedule.

SpaceX might be concerned about schedules, as well. Although the company’s has criticized the entire 36-bulk buy as being unreasonable, its actual goal might be more limited.

“SpaceX is seeking a legal determination that would open certain launches [my emphasis] under the sole-source contract to competition. The official protest document will be available Monday, April 28th at and will be filed with the United States Court of Federal Claims in Washington, D.C.,” the company said in a press release issued Friday evening.

I guess we’ll know more about exactly what SpaceX wants on Monday. Stay tuned.