Elon Musk could get his wish and head into direct competition with defense goliaths such as The Boeing Company (NYSE:BA) and Lockheed Martin Corporation (NYSE:LMT) and compete for US satellite launches.
SpaceX in the process of certifying
As previously reported in ValueWalk, Musk’s Space Exploration Technology Corporation, known as SpaceX, was currently in the process of certifying the company so it could compete for such projects, considered among the more lucrative government contracts. The US Air Force is spending nearly $60 million and has dedicated up to 100 people to certify Musk’s Space Exploration Technologies Corporation so it can launch military and spy satellites.
On Wednesday, the US Air Force announced open bidding on a satellite launch in 2016, the Wall Street Journal is reporting. However, the Pentagon hadn’t planned to challenge incumbent United Launch Alliance LLC (ULA) with rival bids until next year, the report says. A second launch project is expected to be open for bidding in September of this year. ULA has been providing launching services for the Pentagon’s sensitive satellites since 2006.
SpaceX to obtain regulatory approval to launch smaller Pentagon payloads
Musk’s SpaceX has been frustrated by its inability to penetrate the lucrative military market but is expected to obtain regulatory approval this year or in early 2015 to launch smaller Pentagon payloads, the Journal reported. The firm is is developing a rocket for larger launches that would allow it to pursue all available U.S. government contracts. As reported in ValueWalk, SpaceX had been pressing for quicker accreditation, but Pentagon officials have indicated Musk and his team can submit bids before formal certification.
“We’ve got folks busting their butt to get SpaceX certified despite what everything in the media seems to say,” Lieutenant General Charles Davis said in an interview with Bloomberg. According to the report, Davis claims the Air Force is eager to find opportunities for SpaceX so it can feast on the $67.6 billion space launch program budget. Davis refutes claims that the approval process has been slow because the establishment is protecting a monopoly for or United Launch Alliance LLC, a joint venture of Lockheed Martin Corporation and The Boeing Company. “We’ve had to react to SpaceX and members of Congress,” Davis said, attempting to clear the air over any perceived cozy relationship with existing vendors. “Now there’s allegations of cronyism; there’s allegations of ‘you just want to give money to you don’t want to have a new entrant certified.’”
The timing of the issue comes at an interesting moment as tensions with Russia are rising. ULA is particularly vulnerable as they may not be able to procure rocket engines due to a Russian ban. The Pentagon exploring the development of a new, totally U.S.-made rocket engine, the report noted..