Air Force, SpaceX mum about sky-high rocket costs

By John M. Donnelly, CQ-Roll Call on

Published in Business News

Five years ago, Elon Musk, the multibillionaire CEO of the SpaceX rocket company, smashed his way into the business of launching U.S. military and intelligence satellites, a lucrative market that had been cornered for nearly a decade by United Launch Alliance.

Musk, one of the world's richest men, publicly promised in 2014 to launch Air Force rockets for at least three times less money on average than ULA, a joint venture of Lockheed Martin Corp. and Boeing Co., was then charging. But now SpaceX is poised to charge more - much more - at least for the first in a series of forthcoming spy satellite launches. The higher costs, if they continue, could cost taxpayers billions of dollars.

Musk testified in 2014 that, unlike ULA, "we seek no subsidies to maintain our business." He even sued the Air Force back then for the chance to compete.

The fact that Russian engines powered ULA's rockets pushed Congress in 2016 to require by law that ULA develop new ones and that at least one other company besides ULA be able to compete.

For the past several years, Musk has brought to the ossified world of government contracting some amazing technical innovations such as reusable rockets. He not only offered lower prices than ULA used to charge, he also drove down ULA's own costs.

But the company's bid of $316 million for one launch in fiscal 2022 is roughly double its usual price. And it is nearly double ULA's per-launch bid for this round of launches of $169 million.


There may be logical reasons for some or all of that price difference, but neither the Air Force nor the company will explain them - even, so far, to Congress.

In 2015, the Air Force said it would keep from the public the cost of the development contract for its new B-21 Raider bomber program on the grounds that the number was classified.

That position irked the late Sen. John McCain, R-Ariz., who furiously asked an Air Force general in 2016, "Why would you not want to tell the American people how you are going to spend their dollars?"

'Proprietary' data, public moneyOn today's rocket program, the spy satellite mission is classified but the contract is not. Yet the Air Force effectively said, in response to a query, that even the basic outlines of scores of millions of dollars in spending is not public information.


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