Ending a process that began nearly two years ago, the U.S. Air Force (now Space Force) has selected SpaceX and ULA to be the recipients of a multibillion-dollar series of launch contracts that extend into the late 2020s.
Known as the National Security Space Launch Phase 2 Launch Services Acquisition (LSA), the US Air Force launched the initiative publicly in Q4 2018. In May 2019, the LSA process was opened to bidders and the Army finally received serious proposals from SpaceX, the United Launch Alliance (ULA), Northrop Grumman, and Blue Origin.
While the last three companies proposed their next-generation rockets – still in development – to complete at least a dozen military launches from 2022 to 2027, SpaceX offered Falcon 9 and Falcon Heavy. As of April 2020, Falcon 9 officially used ULA’s Atlas V rocket to become the most productive operational rocket in the United States. Although ULA has technically included Atlas V as a backup option in its NSSL Phase 2 bid, the company’s primarily launched car Vulcan Centaur is scheduled to fly for the first time no earlier than July 2021.
As a result, the failure of SpaceX would have made at least one of the two NSSL LSA Phase 2 slots – split 60:40 – almost a farce from US military competition. The real question then was who would win the other distinction, and whether the U.S. military would shake up the sector with a final decision more technically than politically. As previously discussed at Teslarati, the fact that four separate companies submitted serious bids for Phase 2 gave the U.S. Army a significant opportunity.
“For dubious reasons, the US Air Force (USAF) has structured the acquisition of the NSSL Phase 2 in such a way that – despite there being four potential competitors – only two will receive contracts at its conclusion. The roughly ~ 34 launch contracts to grab would be split 60:40 between the two winners, leaving two competitors to be completely downgraded.
Teslarati.com – August 14, 2019
Despite repeated petitions from Blue Origins and attempts by lawmakers to intervene in Congress, the U.S. military remained vehemently opposed to awarding Phase 2 launch contracts to more than two providers in full competition. With the exception of a successful protest by snobbish bidders Northrop Grumman and / or Blue Origin, it appears that the army eventually won the battle, by selecting two bidders.
Instead of awarding even a handful of the 34 launch contracts to Northrop Grumman, the U.S. Space Force is only guaranteeing that the company’s Omega rocket will die in the wild without a direct report of additional military contracts. There is a chance that NSSL Phase 1 LSA funding will continue, likely that NG will provide the money needed to complete the development of Omega, but that is far from guaranteed.
Fully funded from the pocket of Jeff Bezos, the ambitious rocket of Blue Origin, reusable by New Glenn, is more isolated from a lack of US military contracts and the company could also continue to receive hundreds of millions of dollars as part of an LSA Phase 1 distinction. For Blue Origin, already set on entering New Glenn’s commercial launch market, military funding could ensure that the company does the extra work necessary to certify the rocket and its production facilities for military launches.
By the way, that means the U.S. Air Force, Space Force, or National Reconnaissance Office (NRO) could all possibly award Blue Origin if Northrop Grumman contracts outside of the 34 Phase 2 missions without requiring to begin a development and certification process that can last from a year or longer.
Despite the missed opportunities, the NSSL LSA Phase 2 contract is a big win for SpaceX and the company’s Falcon 9 and Falcon Heavy rockets guarantee some 13-14 military launch contracts over a five-year period. For ULA, the victory is like a massive relief, given that the next-generation (exceptional) Vulcan Centaur rocket has no chance of sustaining itself with commercial launch contracts. Much like Atlas V in the last decades of rocket life and Delta IV over most of its two-decade career, ULA’s Vulcan rocket will continue the trend of relying almost exclusively on U.S. military contracts.
This time, however, the U.S. Army’s preferential treatment of the ULA is apparently self-evident. At almost every turn, SpaceX’s Falcon 9 and Falcon Heavy rockets can provide the same launch services as ULA for anywhere from 20-50% less. For the few missions (directly to geostationary) where ULAs Atlas V, Delta IV, and Vulcan rockets could actually have a step up over SpaceX, the FS could easily have ULA taken the smaller 40% share or even split that 40% share with Blue Origins as Northrop Grumman, giving SpaceX the lion’s share and likely saving hundreds of millions of dollars – if not $ 1B + – over the next seven years.
Instead, business (more or less) will continue as usual for at least a decade, as the U.S. military functionally subsidizes the existence of ULA by prioritizing an expensive rocket to achieve the same outcome. The first LSA Phase 2 launches are currently scheduled to launch no earlier than (NET) 2022.
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