Here's Why Elon Musk's SpaceX Could Beat Out Aerospace Giants for Government Contracts

Aerospace leaders like Boeing and Lockheed Martin are missing out on lucrative contracts as Elon Musk's SpaceX emerges as a cheaper alternative. 

by Sam Blum
Getty Images

Elon Musk’s SpaceX is outshining traditional aerospace leaders, and the company might find itself partnering with the U.S. government to launch satellites into space as early as 2018.

The entrance of SpaceX comes as United Launch Alliance, a joint-partnership between aerospace corporations Lockheed Martin and Boeing, announced it would renege its bid for a U.S. Air Force contract to supply global positioning satellites into space, leaving SpaceX as the only candidate for the job.

ULA has served as a steadfast provider of these launches since the joint-venture’s inception in 2006, but its government contract expires after a decade, pitting the very near future as an open playing field.

In terms of abandoning the Air Force bid, ULA blamed the competition’s guidelines and what it says is a lack of internal accounting systems meant to monitor funds from separate government contracts. The worry for the Air Force was that different contracts might be funneled into this particular launch scheme, creating a sort of cross-pollination of state-funds.

Perhaps most glaring among the setbacks ULA faced in nabbing the bid was a Pentagon ban on Russian-made RD-180 rocket engines, which the company has frequently used for launches.

The ban stems from Russia’s invasion of Crimea in March 2014.

Elon Musk discusses SpaceX


In a conversation with reporters on Monday, ULA CEO Tory Bruno was conciliatory, but still pretty opaque: “We look forward to working with the Air Force to address the obstacles to ULA’s participation in future launch competitions to enable a full and fair competition.”

Elon Musk’s SpaceX, on the other hand, provides a much less costly alternative for the mission. Company president Gwynne Shotwell said in March 2014 that government missions typically eclipse private expeditions in terms of cost, but that SpaceX could still shoulder state-sponsored launches for under $100 million.

ULA on the other hand, charges a heftier sum, upward of $160 million for its Atlas V rocket missions.

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