“ULA is the only government certified launch provider that meets all of the unique EELV requirements that are critical to supporting our troops and keeping our country safe. That is the case today, when the acquisition process started in 2012 and at the time of the contract award in December 2013.
In announcing this suit, your question that you have just posed to the air force was, why not wait a few months before awarding ULA the contract? Well, the air force awarded ULA the contract a few months ago, back in December, so why are you waiting to file this suit now?
We only learnt about the big sole-source award in March. It may have been signed in December but it only came to light, interestingly, one day after the senate hearing on EELV launch costs, which seems remarkably coincidental to me. I don't think that's an accident. We've really just had about a month of awareness and we've been somewhat reeling from that news and trying to see, is this real? Is this actually what's going to be the case? When we basically made no progress with discussions with the air force, we thought we have basically no choice but to file the protest. - transcript
I suppose ULA would counter that losing a single billion(s) of dollars payload would ruin any calculation of savings on Spacex part.
On April 17, 2014, the Department of Defense’s (DoD’s) 2014 Selective Acquisition Report (SAR) on the Air Force’s Evolved Expendable Launch Vehicle (EELV) stated that the Block Buy provided more than $4 billion in savings from the President’s FY15 Budget.
The “Block Buy” contract is a commitment of 35 launch vehicle cores to achieve the economy of scale savings. The contract procures the hardware for 35 new cores and the capability to launch those and previous cores procured in prior year contracts (as early as 2002).
Defense Department officials have recently stated that cancelling the contract and terminating the block buy – which involves hundreds of suppliers and is enormously complex – would cost billions.
ULA says it would cost $4 billion more if the block buy didn't happen. Ask yourself why that is.
If ULA was confident that without the block buy they would still win all 35 cores, then the costs would be exactly the same. That $4 billion difference must mean ULA expects that without the block buy they'll lose a lot of those 35 cores.
So the question is how many cores would be lost for ULA to have to charge $4 billion more for the remaining cores, and how much would the government save by paying less to SpaceX for those missions.
Quote from: Garrettand an interesting, related article from Doug:
ULA Speeds Up Engine Deliveries as House Mulls Ban on Russian Motor Use
http://www.parabolicarc.com/2014/04/28/52226/
I wonder, as brought up by the article, how all this will play out for Orbital as well?... Or would they pay ULA to fund Aerojet to built a US built RD-180 and still support both EELV's?
Quote from: Elon MuskWe only learnt about the big sole-source award in March. It may have been signed in December but it only came to light, interestingly, one day after the senate hearing on EELV launch costs, which seems remarkably coincidental to me. I don't think that's an accident. We've really just had about a month of awareness and we've been somewhat reeling from that news and trying to see, is this real? Is this actually what's going to be the case? When we basically made no progress with discussions with the air force, we thought we have basically no choice but to file the protest. - transcriptThis reply from Musk is so strange than I actually went back and transcribed the question, something I typically don't do. I mean, we all heard about it back in January.
especially with a rebuilt RD-180 leads to a new configuration requiring new certification,
If ULA believed the U.S. government felt the risk of SpaceX wasn't worth the cost...
...then ULA would be confident they wouldn't lose any of the 35 cores to SpaceX even without the block buy, and they wouldn't have to charge $4 billion more without the block buy.
Not strange at all. SpaceX expected to compete for 14 launches. Back in 2011,the "point of contention is whether the Air Force will proceed with a proposed “block” purchase from ULA, or will it allow new entrants to bid on medium- and heavy-lift launches", not a mix of both. Further, the 37.B over 5 years for 60 flights that would have been 41.5B was also surprising.
The key is five years and 36 cores....especially with a rebuilt RD-180 leads to a new configuration requiring new certification, and the competition term was 2015 to 2017, not 2014+ 5 years = 2019.
especially with a rebuilt RD-180 leads to a new configuration requiring new certification,
What rebuilt RD-180? And even so, re-certification is not necessarily required.
Quote...then ULA would be confident they wouldn't lose any of the 35 cores to SpaceX even without the block buy, and they wouldn't have to charge $4 billion more without the block buy.We don't know what the real price breaks are for the block buy, and whether the Air Force could get the same pricing with, say, a ULA block buy of 20 as they would with 36. But in the realm of government contracting, where you don't take risks on future customer orders, ULA has no incentive to try to lower customer prices if there is a risk they have to absorb lower profits because of future customer order changes.
In contrast, SpaceX no doubt is buying in economic order quantities based on forecasted order demand, and not based on actual orders. There is risk for such a strategy, but if you are in a business where you feel assured of continued future demand, then it's not a high risk.
Not strange at all. SpaceX expected to compete for 14 launches. Back in 2011,the "point of contention is whether the Air Force will proceed with a proposed “block” purchase from ULA, or will it allow new entrants to bid on medium- and heavy-lift launches", not a mix of both. Further, the 37.B over 5 years for 60 flights that would have been 41.5B was also surprising.
The key is five years and 36 cores....especially with a rebuilt RD-180 leads to a new configuration requiring new certification, and the competition term was 2015 to 2017, not 2014+ 5 years = 2019.
SpaceX isn't contesting the reduction of the 14 launches. They're contesting the 36 core block buy. That's why the journalist asked Elon why SpaceX had taken so long to respond.
Perhaps you're thinking that it was in March that the air force announced the reduction of the 14 competed launches to 7. That announcement didn't happen "one day after the senate hearing on EELV launch costs", it happened on March 4, the day before the senate hearing. Maybe Elon didn't hear about it until 2 days later, but that's just more evidence that SpaceX doesn't keep up with the news. In any case, it's not relevant to the 36 core block buy.
One thing I don't quite understand is when to when are the nominal launch dates. Because a fast DoD launch campaign is 36 months, and 60months is par. Since Falcon 9 can't compete until It gets certified (July?). And assuming that mythical 60% of missions, they could compete, at best, on 6 or seven of those missions. And that's assuming that the 14 that were left out to compete we're not those that they could do in 42months since Dec-2013. Thus, the block buy might be the correct decision.
Now, as an economist, if they left just one mission in the block buy that might have been reasonably expected to be compete by SpaceX (say a mission in FY2017 or later). Then this block buy might perfectly be open to scrutiny. Since I don't have access to the details, I can't make further comments.
Perhaps you're thinking that it was in March that the air force announced the reduction of the 14 competed launches to 7. That announcement didn't happen "one day after the senate hearing on EELV launch costs", it happened on March 4, the day before the senate hearing. Maybe Elon didn't hear about it until 2 days later, but that's just more evidence that SpaceX doesn't keep up with the news. In any case, it's not relevant to the 36 core block buy.
Government agencies must send official notices.
I'm just feeling for the guys doing all the heavy lifting who are going to get caught in the middle of all this crap through no fault of their own.
We only learnt about the big sole-source award in March. It may have been signed in December but it only came to light, interestingly, one day after the senate hearing on EELV launch costs, which seems remarkably coincidental to me. I don't think that's an accident. We've really just had about a month of awareness and we've been somewhat reeling from that news and trying to see, is this real? Is this actually what's going to be the case? When we basically made no progress with discussions with the air force, we thought we have basically no choice but to file the protest. - transcript
This reply from Musk is so strange than I actually went back and transcribed the question, something I typically don't do. I mean, we all heard about it back in January.
Now here's a crazy scenario that one should think about: what if ULA doesn't bid on the launches that F9 can lift? Basically, they say to USAF and SpaceX, put up or shut up.