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SpaceX Will Be Allowed to Compete for Military Contracts

SpaceX won an injunction against the Air Force just two days after it filed suit.
SpaceX's Falcon 9 rocket is roughly four times cheaper than ULA's Atlas V and Delta IV rockets. Image: SpaceX

SpaceX won an injunction against the United States Air Force yesterday, just two days after filing the suit. The decision temporarily prohibits the military from buying rockets made with Russian parts, giving SpaceX time to jump into the military launch sector.

Last week, SpaceX founder Elon Musk filed the injunction against the USAF and the United Military Launch Alliance (a Boeing-Lockheed Martin conglomerate) last week, saying that the $70 billion contract the USAF signed with ULA earlier this year violates both US sanctions against Russia (ULA's rockets use Russian-made engines) and American procurement rules, which require that federal contracts be open for competition among several companies.

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In a press conference announcing the move, Musk said that SpaceX’s Falcon 9 rockets are cheaper, use American as opposed to Russian parts, and are just as reliable as ULA’s Atlas V and Delta IV rockets.

Given the fact that President Obama just signed an executive order creating economic sanctions against Russia, Musk suggested that “on the surface of it, there’s a good probability that there’s some sanctions violations. We think this deserves to have a spotlight on it.”

US Court of Federal Claims judge Susan Braden agreed, at least temporarily. She invoked the executive order Obama signed on March 16 and forbade the US Air Force from buying any rockets from ULA until the court has a chance to hear the case.

Here's the wording of the injunction:

“[The injunction] prohibits the United States Air Force and United Launch Services, LLC (“ULS”), a majority owned subsidiary of United Launch Alliance, LLC (“ULA”), and affiliates thereof, including general partners, directors, officers, employees, agents, representatives, predecessors, assigns, joint ventures, subsidiaries, and divisions, from making any purchases from or payment of money to NPO Energomash or any entity, whether governmental, corporate or individual, that is subject to the control of Deputy Prime Minister Rogozin, unless and until the court receives the opinion of the United States Department of the Treasury, and the United States Department of Commerce and United States Department of State, that any such purchases or payments will not directly or indirectly contravene Executive Order 13,661.”

It’s a big (if temporary) win for Musk. The Air Force contract with ULA is worth roughly $70 billion through 2030 and is the fourth largest expenditure in the Department of Defense budget. Musk says that SpaceX originally tried to compete for the contract and did all the necessary prerequisites, including doing test launches identical to what a military launch would be, but was turned down without hearing a reason.

“SpaceX is not seeking to be awarded contracts for these launches. We are simply seeking the right to compete,” Musk wrote in a letter explaining the lawsuit. “If we compete and we lose, that’s ok too. But to not be given the opportunity to compete at all, especially in light of the Air Force’s stated interest in competition and current dependence on Russia for national security launches, just doesn’t make any sense.”

SpaceX Injunction