Air Force should certify Spacex Falcon 9 no later than June 2015 and Allow Spacex to nearly Halve the cost of Air Force Launches

The Air Force expects to certify SpaceX no later than June to compete for space launches, under an updated agreement that streamlines the certification process

Once certified, SpaceX, with its Falcon 9 launch vehicle, can compete for national security space launches against United Launch Alliance, the Boeing-Lockheed Martin team that currently has a monopoly on Air Force launches.

The new agreement, announced May 8 by Air Force Space Command, clarifies that the commander of the Air Force Space and Missile Systems Center can certify SpaceX as long as the company has demonstrated its ability to design, produce, qualify and deliver the launch system. SpaceX must be able to provide future mission assurance support required to deliver national security payloads to specific orbits on schedule.

Spacex should be certified and be able to compete for two launches this year, along with seven more in 2016 and 2017. The company, founded by PayPal founder Elon Musk, has already carried multiple payloads for NASA.

SpaceX COO Gwynne Shotwell promised in March that if the Air Force allowed Spacex to bid on its launch contracts, SpaceX will put U.S. government satellites into space at a price much cheaper than ULA charges.

How much cheaper? According to a transcript of the proceedings, Shotwell told Congress it would cost “on the order of $80 million to $90 million” apiece to put a Falcon 9 rocket in low Earth orbit, or “$150 million to $160 million” to build and launch a Falcon Heavy (a Falcon 9 rocket with two additional boosters). Averaged across both rocket types, she put the cost at about $120 million.

In contrast, ULA charges taxpayers $400 million every time it launches a rocket into space. Commented Shotwell, “I don’t know how to build a $400 million rocket. … I don’t understand how ULA are as expensive as they are.”

Spacex Falcon 9 launch

United Launch Alliance says are at least three parts to the Air Force “block buy” in question (for 24 Atlas and four Delta launches:

* Manufacture of 36 “new” rocket cores — which costs $10 billion.
* Manufacture of 42 “heritage” cores previously ordered by the Air Force but not yet launched. These will cost $6.6 billion in addition to the $11 billion “block buy.”
* Launching the cores — which costs about $1 billion a year, to send up an estimated 10 missions per year. This $1 billion “EELV Launch Capability” or “ELC” payment is the annual “retainer,” or “subsidy,” that ULA is often accused of receiving from the government.
Put it all together, and ULA estimates the total cost of building and launching 78 rocket cores for the Air Force will approximate $17.6 billion, or about $225 million per cores.

ULA charges $164 million to build and launch a single-core Atlas V 401, versus SpaceX quoting an $80 million to $90 million price tag for a single-core Falcon 9.

As ULA’s CEO tells it, since taking over the company he has helped to cut its average launch price in half, from $400 million (coincidentally, about the same amount SpaceX says ULA is charging today) to about $225 million. He intends to cut that cost in half again, to $100 million, by retiring the Delta, consolidating five existing launch sites to just two, expanding the customer base (ULA currently gets less than 20% of its revenue from commercial customers, for example), and developing a new rocket engine that is even cheaper than the Russian RD-180 used on the Atlas.

SOURCES – Spacex, Defense News, Motley Fool