How Worms Turn

In April of last year, SpaceX sued the United States Air Force over an exclusive, uncompeted, bulk-buy for launch contracts that they’d quietly signed with United Launch Alliance the previous December.

At the time, SpaceX’s Falcon 9 rocket had accumulated enough of a successful launch history to qualify to launch Air Force satellites, but still waited for its certification to be processed by the Air Force paper jungle. SpaceX wants the legitimacy and launch history that comes with U.S. Military launches as it drives toward its ultimate goal of human flights to Mars.

“It just seems odd that if your vehicle is good enough for NASA . . . there is no reasonable basis for it not being capable of launching something quite simple like a GPS satellite…This doesn’t seem right to us.” — SpaceX founder Elon Musk

The lawsuit then gained foreign policy relevance when Russia invaded Crimea and prompted Congress to pass a law banning the purchase of military cross-over technologies from Russia…like the engines used in ULA’s Atlas rockets. SpaceX quickly and loudly pointed out the Russian engine issue as another reason to question ULA’s exclusive access to U.S. National Security launches.

ULA leads the Old Space launch industry where government officials, lawmakers, and contractors have played together behind the scenes in a decades-long, taxpayer-funded, three-tiered game of mutual back-scratching that many believe has kept humanity chained to Earth orbit far longer than necessary by keeping the cost of spaceflight too high to expand.

“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…So they’ve got to go against their friends, and their future retirement program. This is a difficult thing to expect.” — Elon Musk

I should note here that the evidence discovery process of federal lawsuits can be embarrassingly thorough, with perjury and evidence tampering charges often rising out of them as separate and independent felonies.

English: President Barack Obama tours SpaceX l...

English: President Barack Obama tours SpaceX launch pad with CEO Elon Musk, at the Kennedy Space Center in Cape Canaveral, Florida.) (Photo credit: Wikipedia)

Over the course of 2014 and 2015, the Air Force expedited the certification of the Falcon 9 and declared that it could compete in some contracts. Since the good-ol’-boys network let him into their tree-house, Elon put down his ax and settled the lawsuit. Congress waived rocket engines from their ban on Russian military tech, but tensions with Russia increased further and the Air Force decided they really couldn’t rely on tech from a growing military rival. SpaceX and Arianespace pretty much split almost all of the planet’s competitively bid launch contract awards in 2014, completely shutting out Russia’s Proton launcher. ULA won a contract to launch a Cygnus resupply ship to the ISS after the regular launcher blew up in an engine failure over the pad. The Delta, ULA’s other rocket, was slated for cancellation because it couldn’t compete on price with SpaceX and Arianespace. ULA started working on buying engines locally for the Atlas, but that will take quite a while to setup. ULA also started work on another rocket, the Vulcan, which will be built from the ground up to be more price competitive…but for now it’s still just a paper rocket.

Oh, and SpaceX blew up one of their launches to the ISS in June of 2015, but the Air Force had already certified them and said it was ok.

Now, only 17 months after the lawsuit that stripped ULA of their Air Force launch monopoly, they’ve announced that they cannot compete for an upcoming series of GPS III launches and will not bid, saying that Atlas won’t have the engines to fly them. They probably could have shuffled things around and made it work anyway, but there were other provisions in the Request For Proposal (RFP) from the Air Force that combined to give ULA heartburn…

“The RFP requires ULA to certify that funds from other government contracts will not benefit the GPS III launch mission. ULA does not have the accounting systems in place to make that certification, and therefore cannot submit a compliant proposal.”

“In addition, the RFP’s Lowest Price Technically Acceptable (LPTA) structure allows for no ability to differentiate between competitors on the basis of critical factors such as reliability, schedule certainty, technical capability and past performance.” — ULA

So SpaceX will win this GPS III contract uncontested, from a client that they had to sue last year just to get their foot in the door.

ULA enjoyed a great launch year in 2015, with Antares and Falcon both temporarily grounded after launch mishaps. However, it fights for its life and launches lag new contracts by two or three years. ULA still needs to sign new contracts to survive. They must have cash flow as they restructure their company, reorganize their product offerings, develop a new rocket, and adapt a new engine…all while getting their tails kicked all over the conference room by SpaceX and Arianespace.

“I don’t know how to build a $400 million rocket, I don’t understand how expensive they are.” — Gwen Shotwell, SpaceX President and COO to U.S. lawmakers when they asked her why the Falcon 9 only costs under $100 million.

I’ve found that old players in industry don’t always adapt well to a changing world, especially when they spend too much time and energy trying to resuscitate a dying status-quo. Often they add to the pile of bleached bones left behind by progress. However, if they survive then it’s the newcomers that find it hard to compete with them, what with their size, experience, and market capitalization. That’s why I think that even though it looks like the eventual end of Delta and Atlas, ULA itself may live on.

Here’s a broader question though…How can anyone still think that, at the high rate at which this industry is changing, it’ll still take us another twenty years to put people on Mars?

Who’ll ride that wave?

Image result for tomorrowland movie

~ by Bill Housley on November 20, 2015.

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