Elon Musk-led SpaceX is formally challenging
the U.S. Air Force’s decision last year to award a round of rocket development contracts
to competitors, arguing that the Hawthorne company’s entire proposal was incorrectly
deemed the one with “highest risk.” A lawsuit filed May 17 by the Elon Musk’s
SpaceX company against the U.S. government was made public on Wednesday. SpaceX challenged the Air Force awarding $2.3
billion in rocket development contracts last year to its competitors. In October Last year, the Air Force awarded
to United Launch Alliance— a joint venture of Boeing Co. and Lockheed Martin Corp.—
as well as Northrop Grumman Corp. and Jeff Bezos’ Blue Origin for development of new
U.S.-produced rockets that could carry national security satellites to orbit. All three companies were set to initially
receive $181 million. A second phase of the competition will award
actual national security satellite launch contracts to rocket companies. SpaceX, despite not winning one of the initial
launch service agreements, is still eligible to bid, the Air Force has said. To say that SpaceX was unhappy with losing
out on the US Air Force's rocket development contracts would be an understatement. The company has sued the US government under
claims that the Air Force "wrongly awarded" contracts to Blue Origin, Northrop Grumman
and United Launch Alliance. The military branch handed out offers to the
competition despite their "unproven rockets" and "unstated metrics," while allegedly ignoring
SpaceX's own real-world record. The company had completed numerous missions
with its Falcon rockets, according to the lawsuit, but was deemed "highest risk" because
of its largely untested Starship. In this video, Engineering Today will discuss-
why Musk's SpaceX sues U.S. Air Force over rocket-building contracts award? Why SpaceX believes it’s a ‘wrongly awarded'? Why Blue Origin and ULA are trying to intervene
in SpaceX’s lawsuit against the government? Let’s get into details. In the 79-page redacted bid protest, SpaceX
challenges the U.S. Air Force’s Oct. 10 decision to award development contracts to
its competitors and exclude SpaceX. SpaceX’s bid protest with the Court of Federal
Claims challenges the Air Force Space and Missile Systems Center’s decision to deny
SpaceX a Launch Service Agreement contract as “arbitrary and capricious and contrary
to law.” The full SpaceX complaint alleges that the
Air Force’s Space and Missile Systems Center “wrongly awarded” the funds “to a portfolio
of three unproven rockets based on unstated metrics” Under the Launch Service Agreement
(LSA) program. The Air Force awarded LSA cost-sharing contracts
among three SpaceX competitors Blue Origin, United Launch Alliance and Northrop Grumman
to help the companies defray the costs of meeting the government’s unique launch requirements
for the upcoming launch procurement competition known as National Security Space Launch Phase
2 Launch Service Procurement. The LSA awards granted $500 million to Blue
Origin for its New Glenn rocket, $792 million to Northrop Grumman for its OmegA rocket and
$967 million to ULA for the Vulcan Centaur rocket. “By any reasonable measure, SpaceX earned
a place in the LSA portfolio,” the complaint said. Without LSA funds, SpaceX is required to bear
the brunt of those costs on its own. In the redacted portions of the complaint,
SpaceX includes what it estimates those cost would be, such as the construction of a payload
integration facility at the Eastern Range launch complex. “SpaceX respectfully disagrees with the
Air Force’s LSA award decision,” a company spokesperson said in a statement. “While we support the Air Force moving forward
with its Phase 2 acquisition strategy for national security space launches as currently
planned, we are formally challenging the Air Force’s LSA decision to ensure a level playing
field for competition.” In the current complaint, SpaceX argues that
with its LSA decision, the Air Force “chose the portfolio that best served the needs of
ULA, the long-standing incumbent, by awarding an LSA to ULA and an LSA to each of the two
offers that are currently developing major components for ULA’s system.” Blue Origin is developing the BE-4 engine
for its own New Glenn rocket and for ULA’s Vulcan Centaur. Northrop Grumman makes solid rocket boosters
that will be used to power its own OmegA launch vehicle and to augment the Vulcan rocket. SpaceX said it proposed using its workhorse
Falcon 9 rocket and its Falcon Heavy rocket, which has launched twice, for all national
security missions scheduled prior to late 2025, which represented most of the launches. SpaceX bid its proposed Starship rocket system
— which Musk intends to use for future Mars missions — for the “tiny fraction” of
national security space launches set to launch no earlier than late 2025. SpaceX claims that because Starship is still
in development, the Air Force rated its entire proposal as the “highest risk” portfolio,
despite the fact that ULA, Northrop Grumman and Blue Origin also bid rockets currently
under development. The complaint gave the first detailed look
at why SpaceX was not among the three companies awarded funding in October. The company alleges that the Air Force Space
and Missile Systems Center “unfairly nullified SpaceX’s advantage by attributing two ‘significant
weaknesses’ and one ‘weakness’” due to the company bidding its Starship rocket,
“resulting in a High risk rating.” The first “significant weakness” was “an
unstated criterion,” which was that the Air Force compared SpaceX’s approach to
building Starship “against the current processing requirements for Government reference missions.” The “unstated evaluation focus on current
Government processes and facilities clearly favors Government-specific launch systems
like ULA’s Vulcan.” The second “significant weakness” was
also unstated in the LSA critera, SpaceX said. However, the SpaceX proposal that the Air
Force labeled as a weakness is redacted in the bid. The Air Force labeled the redacted proposal
as “high risk” but SpaceX alleges the LSA awards did not “expressly” require
the unknown proposal. Likewise, the third weakness is also redacted. SpaceX alleges the unknown proposal was misread
by the Air Force. All three of the weaknesses identified by
the Air Force pertain to the company’s Starship rocket. Because of that, SpaceX alleges the “flawed”
assessment eliminated SpaceX from the competition on the basis of “a capability the Agency
will not need until September 2025 at the earliest.” Musk described the proposal differently during
a December meeting with acting Defense Secretary Patrick Shanahan. He said then SpaceX’s proposal for the Air
Force launch service agreement “missed the mark,” according to a summary of the meeting
by a member of Shanahan’s staff that was included in a Defense Department office of
inspector general report on alleged unethical conduct by Shanahan. SpaceX also went on the offensive in the lawsuit,
declaring that “the LSA award decision will not end the United States’ reliance on Russian
rocket engines.” The bid alleges that LSA awardees were allowed
“to offer launch vehicles other than the ones” they bid. “There should be no doubt that ULA ... will
propose to use ULA’s Atlas V as their ’secondary launch vehicles,” SpaceX said. The Atlas V rocket uses RD-180 rocket engines,
which are built in Russia. SpaceX is seeking that the court prohibits
any further government investment or company performance under the initial launch service
agreements; that the proposals for Phase One be reevaluated “in accordance with the stated
evaluation criteria and on an equal basis”; and that a new award decision be made, according
to the bid protest. Over the past two days, all three LSA winners
have filed “motions to intervene” in the SpaceX lawsuit. This allows the three companies to be parties
in the lawsuit and protect any interests that might be put at risk by any court decision. ULA and Blue Origin filed their motions May
21 and Northrop Grumman on May 22. The Department of Justice, which represents
the U.S. government in the suit, can turn to these three companies for documentation
or data that could help win the case. Blue Origin argues that “SpaceX has challenged
the government’s conduct under the LSA transaction” and that SpaceX’s protest could affect Blue
Origin’s chances in the second phase of the program. SpaceX noted in the complaint that soon after
the Oct. 10 LSA awards were announced, the company voiced its concerns to the Air Force. It filed an objection Dec 10 but SMC did not
agree, and officially denied SpaceX’s objection on April 18, 2019, leading SpaceX to seek
relief in court. This is not the first time Musk has challenged
national security launch contracts. In 2014, Musk filed a lawsuit against the
Air Force to challenge a so-called block-buy contract the military gave to ULA, though
he later dropped the suit after the service agreed to open more launches to competition. Currently, SpaceX and ULA are the only companies
certified to carry sensitive spy satellites to orbit.
