May 13, 2016

"SpaceX promises launches for less than $100 million."

Politico: Yet despite the potentially more cost-effective alternative, taxpayers will be paying the price for ULA’s contracts for years to come, POLITICO has found. By Matthew Nussbaum

'Estimates show that, through 2030, the cost of the Pentagon’s launch program will hit $70 billion — one of the most expensive programs within the Defense Department. And even if ULA is never awarded another government contract, it will continue to collect billions of dollars — including an $800 million annual retainer — as it completes launches that were awarded before Musk’s company was allowed to compete. That includes a block buy of 36 launches awarded in 2013.

'Meanwhile, ULA is under investigation by the Pentagon for possible corrupt bidding practices and is preparing to lay off 25 percent of its workforce. Its long-term viability is in doubt. Even the Pentagon’s acquisition chief grants that the creation of ULA — a monopoly criticized by the Federal Trade Commission when it was formed at the government’s behest a decade ago — may have been a mistake.

'“With the benefit of hindsight, you could say that,” Frank Kendall, undersecretary of defense for acquisition, technology and logistics, told POLITICO. ULA’s unique situation has been brought into the spotlight by Musk, the Silicon Valley billionaire who founded Space Exploration Technologies Corp., in part to help humanity colonize Mars. Even after a series of successful launches starting in 2008, SpaceX was shunned by Defense officials loyal to the department’s regular contractors.

'After suing in federal court to gain access to the bidding process, SpaceX won its first military contract on April 27. The lawsuit was settled out of court and the terms sealed. In what would have been the first head-to-head competition between the contractors, ULA refused to even participate, perhaps because SpaceX promises it can deliver some of the Pentagon’s payloads to space for less than half of what ULA charges.'

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