The U.S. Air Force on Wednesday awarded billionaire Elon Musk’s SpaceX an $83 million contract to launch a GPS satellite, breaking the monopoly that Lockheed Martin Corp (LMT.N) and Boeing Co (BA.N) have held on military space launches for more than a decade.
The Global Positioning System satellite will be launched in May 2018 from Florida, Air Force officials said.
The fixed-price award is the military’s first competitively sourced launch service contract in more than a decade. It ends the exclusive relationship between the military and United Launch Alliance, a partnership of Lockheed Martin and Boeing.
ULA did not compete for the GPS launch contract, citing accounting issues, implications of trade sanctions limiting imports of its rockets’ Russian-made engines and, according to a former ULA vice president, SpaceX’s cut-rate pricing.
The next Spacex launch is scheduled for May 4th at 1:22 am EST with a two-hour launch window. The company is expected to couple the launch with another rocket landing attempt on a drone ship out at sea.
The launch requirements for this next launch, the accompanied landing attempt will likely be more challenging. In order to reach the significantly higher orbit, the first stage on May 4th will be required to accelerate faster than the first stage on April 8th, which may make a soft landing attempt more cumbersome.
It was less than three weeks ago that SpaceX made their first successful rocket recovery on a drone ship.
Between now and 2018, the Air Force plans to solicit bids for contracts covering eight more satellite launches.
ULA did not immediately respond to a request for comment about bidding on future launch contracts.
The most reliable US rocket company, United Launch Alliance, could not compete with upstart provider SpaceX during a competition in late 2015 for an Air Force payload, a senior engineer with the company said Wednesday. SpaceX was able to offer launch capabilities for as little as one-third the price of what United Launch Alliance could, said Brett Tobey, vice president of engineering for the Colorado-based rocket company.
The $82.7 million fixed-price contract awarded to Space Exploration Technologies, as the company is officially known, covers production of a Falcon 9 rocket, spacecraft integration, launch operations and spaceflight certification.
SpaceX holds more than $10 billion worth of launch service contracts for NASA and commercial customers.
The advertised price of a Falcon 9 is $61.2 million. Assuming that savings would be passed on to the customer, the price of a Falcon 9 with a reused first stage could drop to $42.84 million.
Getting to weekly launches by 2019 and twice a week by 2021
Spacex emphasis is on accelerating the production and launch rate for the Falcon 9. “We’ve had the luxury in years past of having to build only a few rockets a year,” she said, “so we really weren’t in a production mode.” Last year would have been the first to require a high production rate of the rocket, she said, had it not been for the June launch failure that halted flights for nearly six months.
“Now we’re in this factory transformation to go from building six or eight a year to about 18 cores a year. By the end of this year we should be at over 30 cores per year,” she said. “So you see the factory start to morph.”
Those changes, she said, include doubling the number of first stages that can be assembled at one time from three to six. The company is also working to accelerate production of the Merlin engines that power the Falcon 9 since, at the higher production rates planned for this year, the company will need to build hundreds of engines a year.
According to Shotwell, a pace of 16 more launches over the next nine months should shift to 24 launches in 2017. From there, SpaceX plans to continue accelerating its cadence, at a rate of 30% to 50% annually.
SpaceX CEO Elon Musk has long talked about launching payloads into orbit as often as once per week.
Weekly launches where they make $80 million per launch would be $4 billion and perhaps $2 billion in operating margin.
SOURCES- Spacex, Fortune, Space News, Reuters