Launch contract dispute pits space against air force, ULA.

• Author: Magnuson. Stew
• Position: Cover story

A long-simmering dispute between rocket-builder SpaceX and the Air Force over launch contracts came to the fore when the company's founder, CEO and chief designer Elon Musk announced a lawsuit directed at the service at the National Press Club in April.

At issue was a sole source, no-compete contract awarded to United Launch Alliance to provide government customers 36 rocket cores over five years.

"Essentially what we feel is that this is not right. That the national security launches should be put up for competition and they should not be awarded on a sole source, uncompeted basis," Musk said. SpaceX is asking that the contract be canceled and not awarded until its Falcon 9 rocket is certified by the Air Force and has a chance to grab some of the business.

In the press conference, Musk accused the Air Force of moving the "goal posts" back when it comes to certifying its rockets and wasting taxpayer dollars by choosing more expensive launch services over his.

"This contract is costing U.S. taxpayers billions of dollars more for no reason," Musk said.

The last decade has seen many changes in the US. launch industry.

It began in the 1990s as the Air Force created the evolved expendable launch vehicle (EELV) program, and awarded contracts to two of the major defense firms, McDonnell Douglas -- later acquired by Boeing -- and Lockheed Martin.

The long-term goal was to reduce the high cost of sending payloads into orbit, and, more importantly, to create more dependable rockets after a string of high-profile failures.

The service wanted two competitors in hopes that they would bid against each other and reduce costs. The result was Lockheed Martin's Atlas V family of rockets and Boeing's Delta IV.

These new rockets had their inaugural launches in 2002.

The same year, Musk, who had recently sold his first company PayPal to eBay for $1.5 billion at age 30, announced in June at a lightly attended panel discussion on space entrepreneurship in Palo Alto, California, that he was going to jump into the space business. His start up Space Exploration Technologies (SpaceX) intended to compete with Boeing and Lockheed Martin on launch vehicles and spacecraft, he told a reporter for industry publication Space News.

Less than four years later, Musk launched his first Falcon 1 rocket. It crashed into the ocean after less than a minute. On the fourth try, the rocket succeeded in placing a payload into orbit in 2008.

The company moved on to its Falcon 9 rocket in 2010 and began to sign up government and commercial customers, which included Air Force and NASA payloads. Today, SpaceX has more than 40 launches on its manifest, 3,000 employees at its Hawthorne, California, plant, and is developing a "heavy" version of the Falcon 9. It has had nine successful launches and no accidents over the past four...