SpaceX, Big Rival Share Rocket Job -- WSJ
March 15 2018 - 3:02AM
Dow Jones News
By Andy Pasztor
This article is being republished as part of our daily
reproduction of WSJ.com articles that also appeared in the U.S.
print edition of The Wall Street Journal (March 15, 2018).
Seeking to maintain a pair of satellite-launch providers, the
Air Force basically split $640 million in contracts between Elon
Musk's low-cost SpaceX and a Boeing Co.- Lockheed Martin Corp.
joint venture with higher prices but a long military legacy.
Wednesday's announcement, implementing the Pentagon's previously
announced procurement policies, said the awards were part of
continuing efforts to reduce costs "while maintaining assured
access to space with two or more launch providers."
Space Exploration Technologies Corp., the formal name of Mr.
Musk's company, won a $290 million fixed-price contract to launch
three Global Positioning System Satellites into orbit on Falcon 9
rockets by the end of 2020. The closely held Southern California
company previously was awarded two other GPS launches.
United Launch Alliance, the joint venture that historically
enjoyed a virtual monopoly boosting large U.S. military or spy
satellites into space, was awarded a $351 million deal for two
launches of Air Force spacecraft on workhorse Atlas V rockets.
Based on Air Force numbers, those launches will cost roughly $170
million apiece, or more than $70 million above SpaceX prices.
SpaceX is a scrappy upstart that has used low prices, reusable
boosters and aggressive marketing efforts to snare business from
rivals around the globe, particularly United Launch Alliance.
The joint venture is developing a lower-cost family of rockets
to compete more effectively, but those aren't expected to begin
routine flights for at least three or four years.
Until then, Pentagon brass and Congress effectively have agreed
to support transition policies that will allocate launches to both
contractors.In its announcement, the Air Force emphasized the
contracts were competitively awarded but are intended to "strike a
balance between meeting operational needs and lowering launch
costs."
"SpaceX is pleased with the Air Force's decision to select us
for all five of the GPS [launches] competed to date," said Gwynne
Shotwell, SpaceX's president and chief operating officer.
Tory Bruno, president and CEO of United Launch Alliance, told
reporters Tuesday that development of its next-generation rocket,
called Vulcan, is on track and some of the venture's biggest
subcontractors have agreed to invest in developing essential
technology.
Mr. Bruno said the venture currently doesn't have any contracts
to launch commercial satellites, but aims to build up that portion
of its business over the next five or so years to increase launch
tempo and thereby reduce prices for all customers. But that may be
a steep challenge, according to many industry experts. At this
point, Mr. Bruno's team is launching about half as many rockets
annually as SpaceX, which forecasts continued sharp increases in
the number of launches in coming years.
Testifying before a House appropriations defense subcommittee
Wednesday, the Air Force's top civilian and uniformed leaders
reiterated the Pentagon's commitment to eventually end up with at
least two viable launch providers able to compete long-term for
national security payloads.
But without referring to SpaceX by name, Air Force Secretary
Heather Wilson also told the panel the global launch business has
been transformed in recent years. "The cost of launch is
plummeting" and commercial space ventures now "have multiple
choices" to blast spacecraft beyond the atmosphere. "We're coming
to a point," she said, that low-cost launchers are "enabling
business plans to close in space that never were possible
before."
Write to Andy Pasztor at andy.pasztor@wsj.com
(END) Dow Jones Newswires
March 15, 2018 02:47 ET (06:47 GMT)
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