Author Topic: SpaceX and ULA Get Launch Contracts. ULA Wins Almost 50% More Money  (Read 661 times)

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Online Elderberry

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Yahoo Finance by Rich Smith 3/11/2019

[W]ith each passing day, I'm more and more convinced that Boeing and Lockheed's ULA joint venture is doomed to fail. Ever since the U.S. Air Force certified SpaceX's Falcon 9 medium lift rocket to carry payloads four years ago, Falcon 9 has won every bid for such missions in which it competed against Atlas V rockets bid by ULA.
-- Me, eight months ago


But that was then, and this is now.

Today, SpaceX continues to charge the U.S. government significantly less (than United Launch Alliance does) for launch services. However, a pair of recent contracts totaling $739 million in value demonstrates that the U.S. government is in fact willing to pay ULA more than SpaceX for the same work -- at least sometimes. But perhaps even more important to the future prospects of ULA and its co-owners Boeing and Lockheed Martin (NYSE: LMT), ULA's rockets are getting cheaper and moving closer to price parity with SpaceX's.

The Pentagon just ordered up three more ULA Atlas launches and three Falcons from SpaceX. Image source: Getty Images.
$739 million in space contracts

Allow me to explain.

Last month, the U.S. Air Force announced the award of six launch contracts to be divided between SpaceX and ULA. SpaceX will launch the missions designated NROL-87, NROL-85, and AFSPC-44 for a total cost of $297 million ($99 million per launch). ULA will be responsible for Silent Barker, aka NROL-107, SBIRS GEO-5, and SBIRS GEO-6. ULA will be paid $441.8 million for its three launches -- $147.3 million apiece.

And that is clearly the headline here. With $739 million up for grabs, SpaceX and ULA are being given basically the same work to do -- but ULA will be paid 49% more to do it. Now, the Air Force would probably argue that this is fair and certainly within its discretion. After all, at the time bids were solicited for these contracts last year, Space and Missile Systems Center commander Lt. Gen. John Thompson explained that awards would be based on "a trade-off between past performance, performance and schedule sub-factors, and price."

More: https://finance.yahoo.com/news/spacex-ula-launch-contracts-ula-145200293.html