Despite its perfect record, the Atlas 5's days as the workhorse for the U.S. military may be numbered. Image credit: United Launch Alliance

Jun 1, 2015 SpaceX military business could turn the tables on United Launch Alliance

Sen—With last week’s announcement that it was cleared to compete for the U.S. military’s satellite launch business, upstart Space Exploration Technologies, or SpaceX, could soon find itself in the catbird seat while rival United Launch Alliance wrestles with a Congressionally mandated trade sanction affecting imports of the Russian engines that power its most competitively priced rocket.

SpaceX’s first opportunity to chip away at the longstanding United Launch Alliance monopoly could come as early as this month when the U.S. Air Force is expected to issue a solicitation for launch services for the next-generation Global Positioning System satellites.

The privately owned, California-based company had been waging a heated battle to win Air Force certification of its Falcon 9 rocket, which made its debut test flight on June 4, 2010. Since then, it has launched two trial and six operational missions under NASA contracts to resupply the International Space Station; seven missions for commercial communications satellite customers and two science satellites. After the first five flights, SpaceX began flying an upgraded version of the Falcon 9, which last week received a green light to compete for U.S. military and national security missions.

“We thank the Air Force for its confidence in us and look forward to serving it well,” SpaceX founder and chief executive Elon Musk said in a statement.

The news was not unexpected. SpaceX has been waging a very public and occasionally vehement battle to become a launch service provider to the U.S. military, a market that Musk has said he wants to help boost his company’s revenue.

With the proverbial David about to enter Goliath’s home court, kingpin United Launch Alliance, a partnership of the top two U.S. defense contractors, Lockheed-Martin and Boeing, is focusing on the long game: how it is going to keep its most competitively priced rocket, the Atlas 5, on the market.

The rocket uses Russian-made RD-180 engines, which have been banned for military missions under a trade sanction ordered after Russia’s invasion of Ukraine’s Crimean peninsula last year.

United Launch Alliance originally believed it had 29 engines available for U.S. military missions, but a subsequent legal review by the U.S. Department of Defense cut that number to 20. Legislators are in the process of determining if any more of the engines already under contract should be exempt from the ban and if so, how many.

United Launch Alliance is planning to replace the RD-180 with a domestically manufactured engine, either Blue Origin’s BE-4 or Aerojet Rocketdyne’s AR-1. But those engines won’t be ready until around 2019.

“Without greater flexibility to use the RD-180 engines ULA has on contract, the country could face a very serious national security gap,” United Launch Alliance spokeswoman Jessica Rye wrote in an email.

Secretary of the Air Force Deborah Lee James has stated that “a clarification in the (fiscal year) 2015 National Defense Authorization Act is needed in order to ensure the nation responsibly transitions from the RD-180 to a domestic alternative in a way that does not impact the launch of our national security payloads. Secretary James made clear that changes or clarification of existing law is necessary because the law currently drives out competition in the near-term and could eliminate real competition,” Rye added.

The ironic prospect that United Launch Alliance may not be able to compete for the military’s launch business after its supply of RD-180s runs out also could impact its parent companies’ investment decisions in the planned Atlas 5 replacement rocket.

“ULA’s board of directors has made no long-term commitments on the funding of a new rocket. The board will continue to evaluate each step of the development process and exercise its strategic business judgment in light of market conditions and environment,” Rye said.

As ULA chief executive Tory Bruno has stated, the board approved the plan for the remainder of 2015, but will re-evaluate ULA’s investment each quarter, she added.

The Air Force wants to maintain two independent routes to space so that if a problem derails one launcher key satellites will still have a way to reach orbit. United Launch Alliance has been handling that with two rockets, the Atlas 5 and the Delta 4, but it wants to retire the latter due to higher manufacturing costs. The company would however continue to fly the heaviest lift version of the Delta, which carries payloads too big for the current Atlas booster.

The competition between Falcon 9 and Atlas 5 may only be round one for SpaceX and United Launch Alliance. SpaceX is planning to debut its heavy lift Falcon rocket late this year or early 2016 and already is laying the groundwork for its Air Force certification. That could send United Launch Alliance’s Delta 4 Heavy into retirement even sooner than expected.