SpaceX Wins Contract to Launch Satellite for Air Force

April 28, 2016
The U.S. received one other bid, but it didn’t say who submitted it.

Space Exploration Technologies Corp. won an $82.7 million contract to launch a satellite for the U.S. Air Force, giving Elon Musk’s closely held company military revenue to go with what it earns serving NASA and private companies.

This contract will include launch vehicle production, mission integration, and launch operations for a global positioning system satellite. The Hawthorne, Calif.-based company is expected to conclude the work by July 31, 2018, the Department of Defense said Wednesday in a statement. The U.S. received one other bid, but it didn’t say who submitted it.

United Launch Alliance, a joint venture between Boeing Co. and Lockheed Martin Corp., had been the sole supplier of sensitive satellite launches, a market estimated by the U.S. Government Accountability Office to be worth about $70 billion through 2030. The Pentagon sought to have two providers for critical launches to drive down costs and provide a crucial backup in case one vehicle is grounded. The alliance had said that terms of the contest kept it from submitting a qualifying bid.

“This GPS III Launch Services contract award achieves a balance between mission success, meeting operational needs, lowering launch costs, and reintroducing competition for National Security Space missions,” said Lieutenant General Samuel Greaves, Air Force Program Executive Officer for Space and SMC commander.

The Boeing-Lockheed company charges $160 million or more for launches of its Atlas V rocket, powered by Russian-made engines, according to Teal Group estimates. SpaceX aims to keep costs down by reusing its first-stage rockets. Earlier this month, it landed one on a drone ship for the first time -- an important step toward re-launching.

Musk, the chief executive officer of SpaceX and Tesla Motors Inc., has said he wants to reduce costs to make space travel more affordable and the colonization of Mars possible. The space company today tweeted that it will send a spacecraft to the planet as soon as 2018.

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Licensed content from Bloomberg, copyright 2016.

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