Elon Musk’s SpaceX may have finally won a large national security contract — although it’s worth mentioning that it might’ve done so by default. United Launch Alliance (ULA) told the Washington Post this week that it was withdrawing its bid on a new multi-year contract to launch new satellites for the Air Force starting in 2018.
The reason? New laws surrounding the use of Russian-manufactured engines in ULA’s rockets. Following the tensions in Ukraine, Congress passed legislation to phase out use of the RD-180 engine, with a complete ban starting in 2019. ULA says that it cannot find a new manufacturer able to deliver replacement engines in time, and would need to withdraw its bid as a result. That leaves SpaceX as the only other major contender, and the likely winner of the new contract.
It’s a surprising setback for ULA, given its backers. Pentagon contracts are big business for the defense industry, as it’s generally easy money for most contractors. ULA itself is a partnership between two major Pentagon suppliers — Lockheed Martin and Boeing — who together received an astounding $51.8 billion in payments from the US Government in 2014.
That fact isn’t lost on those at SpaceX. Last year, Musk and his company sued the Air Force over accusations it was giving preferential treatment to companies like Lockheed Martin and Boeing. That suit was settled earlier this year after the Air Force opened up some of its contracts to broader competition and certified SpaceX for satellite launches in May.
All is not lost for ULA, though. Ars Technica reports that the company is working with American company Blue Origin on a new rocket engine. It is likely though that rockets based on Blue Origin engines will not be ready for testing until 2019, and won’t be ready for commercial use for several years thereafter.
Either way, ULA will need to move fast, or SpaceX might gain a larger foothold in the defense market. The Air Force plans to put up at least eight other launches for bids by the end of 2017, it says.