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USAF Rejected SpaceX Offer To Launch GPS 3 Satellites for $80M Each
WASHINGTON — Months before the U.S. Defense Department disclosed plans to award a sole-source contract to United Launch Alliance for a block of national security satellite launches, the Air Force turned down an unsolicited bid from Space Exploration Technologies Corp. to launch the service’s GPS 3 navigation satellites for $79.9 million each, according to new filings in federal court.
In a timeline detailing events in the Air Force’s Evolved Expendable Launch Vehicle program and filed in the U.S. Court of Federal Claims June 4, SpaceX said it submitted the proposal on Aug. 16, 2012.
On Sept. 18, 2012, the Air Force rejected the proposal, “explaining that the GPS III satellites ‘may be acquired by competitive methods’ from ‘certified launch providers,’” the SpaceX timeline said.
SpaceX is not expected to earn formal certification from the Air Force to bid on national security launch missions until the end of this year at the earliest.
The exchange, as outlined, provides one of the clearest examples yet of SpaceX’s frustration with the Air Force process for buying rockets.
SpaceX has asked the court to bar the Air Force from buying 22 first-stage rocket cores on a sole-source basis from ULA. That number, a subset of the 36 cores the Air Force ordered from ULA last year under an $11 billion contract, reflects the missions for which SpaceX believes it can compete with its Falcon 9 rocket.
Two months after the Air Force rejected SpaceX’s proposal, Frank Kendall, the Pentagon’s top acquisition official, issued a memo approving an Air Force plan to enter into the so-called block buy contract with ULA.
The block buy is part of a two-pronged strategy aimed at reining in the Air Force’s sky-high satellite launching costs. The other element is competition: Kendall’s plan also called for the Air Force to put up to 14 additional missions up for bid, giving newcomers like SpaceX a chance to win Pentagon business.
In March 2014, the Air Force announced it halved the number of space launches to be competitively awarded from 2015 to 2017 due in part to anticipated production slowdowns in satellite programs, primarily GPS 3.
The first of those competitively awarded missions, meanwhile, appears to be the launch of a classified payload for the U.S. National Reconnaissance Office, which operates the nation’s spy satellites. The Air Force on June 4 issued a draft request for proposals for that mission, dubbed NROL-79.
Industry sources have long said that SpaceX was vying for the GPS 3 missions, which appear well suited to the capabilities of the Falcon 9. The court filing is the first public disclosure of the asking price.
It is unclear whether SpaceX’s offer is still on the table. A spokeswoman for SpaceX, Allison Bryan, did not answer that question before presstime.
During a meeting with reporters May 19, Michael Gass, the president and chief executive of Denver-based ULA, said the average cost of its Atlas 5 401 rocket, one of the smaller versions of that vehicle, was about $164 million per launch for those missions under contract. Future versions, meaning those purchased after the block buy, would start at less than $100 million, he said.
ULA has accused SpaceX of charging prices that are 30 to 105 percent higher than what SpaceX has advertised online. On its website, SpaceX says its standard commercial Falcon 9 launches cost $61.2 million, although company officials have said government missions tend to have additional requirements that drive up their cost.
The Air Force, in additions filed to the SpaceX timeline, said it issued a request for proposals (RFPs) for the block buy in March 2012, and made a redacted copy of the request available to SpaceX the following month. “No prospective launch service providers objected to the RFP’s scope or any of its terms,” the Air Force addition reads.
One of the questions raised by the U.S. Department of Justice, which is representing the Air Force in the case, is whether SpaceX filed its protest within the proper time frame to be given consideration.
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