The world is apparently not enough for Elon Musk, who now wants to compete for business involving launching satellites into space, to orbit around Earth. He would like to directly compete against Lockheed Martin Corp.-Boeing Co., which has a monopoly on launching satellites. Musk’s SpaceX company is planning to sue the U.S. Air Force to protest the monopoly.
If Elon Musk isn’t able to offer a better, cheaper deal, and he gets beat out, so be it, according to the billionaire founder of PayPal and Tesla. However, Musk believes that SpaceX can save the government at least a billion dollars a year, and, as he said to reporters gathered together at the National Press Club on Friday, “why would they not even compete it?”
Elon Musk is seeking nothing less than breaking the lock that the combined companies, Lockheed Martin Corp. and Boeing Co., has over launching satellites for the U.S. government. The income the two companies will receive from the U.s. military launching satellites has been estimated to earn them somewhere around $70 billion dollars from now to 2030.
Sen. John McCain (R-Ariz.) is a Supporter of Elon Musk and SpaceX
Senator John McCain is one of Elon Musk’s strongest supporters in Congress. He believes that Musk and SpaceX can save the U.s. government a lot of money, and he questioned in a letter to the Pentagon’s inspector general why there was not competition allowed in the satellite launching business.
On Monday, SpaceX is expected to file a lawsuit against the U.S. Air Force. According to the senior vice president at Levick (a public relations firm which represents SpaceX), Ian Christopher McCaleb, SpaceX wants there to be competition for a military contract for 36 rocket cores.
Last year, the U.S. Air Force, in an effort to hold down the costs of launching satellites, agreed to purchase the main rocket components needed to launch satellites in bulk.
However, the contract, according to Elon Musk, “is costing U.S. taxpayers billions of dollars for no reason.”
Although the U.s. military is saving taxpayers money with their plans to buy rocket components in bulk, and United Launch Alliance has improved its performance — both combined saving an estimated $4 billion — Elon Musk believes SpaceX can launch satellites for far less, and save taxpayers even more money.
In order to gain U.S. certification to win the business of launching satellites, SpaceX will need to launch three satellites successfully. Also required, according to the Air Force, will be technical audits and reviews of the manufacturing process, ground systems and rockets.
Elon Musk Questions U.S. Dependence on Engines From Russia
Last month, Elon Musk told lawmakers that the Atlas V rockets Lockheed-Boeing uses to launch satellites rely on engines purchased from Russia. Musk questioned why the United States should be dependent on Russia for these engines. He suggested that if the U.S. levels criticism against Russia for its invasion of Crimea that our supply of the engines might be put at risk.
Musk could be right on the mark. If the proposed expansion of sanctions against Russia that the U.S. and Europe are considering occurs, Russia might be less likely to keep supplying the U.s. with engines.
The reliance of the U.S. on foreign-built engines, according to some Pentagon officials, like Defense Secretary Chuck Hagel, could potentially pose a national security risk. If Elon Musk and SpaceX could stop the reliance on the United States on Russian built RD-180 engine made by the NPO Energomash company, owned primarily by the Russian government, there would no longer be any such potential security risk or danger that our supply of engines would be cut off.
As SpaceX already holds a Commercial Resupply Services contract with NASA for $1.6 billion to resupply International Space Station missions, Elon Musk believes that his company should be quite “capable of launching something quite simple like a GPS satellite.”
While NASA has open bids for contracts, the same cannot be said for the U.S. Air Force’s Evolved Expendable Launch Vehicle (EELV) contract, at least with the 36 EELV satellite launches which constitute a “block buy,” though 14 other launches will be awarded subject to competition.
Is it true that the world is not enough for Elon Musk? If SpaceX is allowed to directly compete with the combined forces of Lockheed Martin Corp. and Boeing Co. and SpaceX wins the contract to launch satellites, there is no doubt that it will be a lucrative contract and Musk and SpaceX will benefit from it.
However, if competition is allowed for the contract, and Elon Musk and SpaceX can save U.S. taxpayers money as well as prevent the possible disruption of being supplied with engines built in Russia, why shouldn’t the current monopoly be broken?
Written by: Douglas Cobb