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SpaceX Won't Win the Government's Launch Contracts Without a Fight

President Gwynne Shotwell went toe-to-toe with SpaceX's biggest competitor on Capitol Hill today.
​Image: NASA

​When it comes to the future of American rockets, the US has a choice: SpaceX is cheap and all-American, but United Launch Alliance has a proven track record.

At least, that what the two companies' arguments boiled down to when they squared off in front of a congressional subcommittee this afternoon.

SpaceX President Gwynne Shotwell went toe-to-toe with ULA's CEO Tory Bruno in front of the Armed Services Committee to​day as the two companies vie for future Evolved Expendable Launch Vehicle contracts with the Air Force, which facilitate Department of Defense and National Security missions. Committee members lobbed questions at the two executives, but their responses routinely cycled back to the fact that one is cheap and American, and the other is really damn reliable.

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Shotwell told the committee an average SpaceX launch costs $60 million. When asked by the committee how her company manages such a cost-efficient launch, Shotwell said, "I don't know how to build a $400 million rocket. Rather than [ask] how am I less expensive than ULA, I don't understand how ULA is as expensive as they are."

Bruno later corrected Shotwell, saying ULA's average launch costs $164 million, and noting that ULA has a 100 percent success rate for its 94-launch history. If just one launch had gone awry, he said, "the cost would be in the billions."

Since 2006, ULA (a consortium of defense manufacturers Boeing and Lockheed Martin) has had an exclusive contract with the US government to outfit its EELV launches. They have a $70 billion contract that expires in 2030.

The problem is that ULA relied on RD-180 en​gines made in Russia to power its Atlas V rockets. When tensions rose during the crisis in Ukraine last spring, Rus​sia decided it didn't really want to supply the US with all its rocket equipment any more. An order of 36 engines will be filled, but after that it's game over. ULA can still outfit security launches with its more expensive Delta IV rockets, but the disruption opened the door to some good old American competition. Suddenly there was room for SpaceX to step in.

And while Elon Musk's company hasn't flown as many missions as ULA, it's decidedly more affordable and boasts an American-made product. It's worth noting that SpaceX's Falcon 9 also has a 100 percent success rate.

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"We build this rocket in the United States," Shotwell told the committee after responding to a question about SpaceX's Netherlands-sourced aluminum. "Granted, there might be some raw materials purchased elsewhere, but this is an American rocket built by American hands and technicians."

But Bruno was quick to point out that ULA is in the process of developing an American-made engine and working to drive down costs. It's also looking to expand its commercial offerings, working on a fixed-priced, bare-bones launch that could suit a variety of commercial needs and be customized for additional cost.

"It will literally be like going to a website to build your own rocket," he said, adding ULA was not afraid of a fight for the contract. "I believe competition is good for the taxpayer. It's healthy for the industry and I am looking forward to going to that field, taking my team there because I believe we will win."

But the fact remains that there will likely be a supply gap as ULA's last order of Russian engines is depleted and before it can finish its own engine. That gap may just provide enough room for SpaceX—which is quickly clos​ing in on certification—to break into the government's security launch contracts. Both Bruno and Shotwell were asked by committee member Rep. Mike Rogers (R-AL) whether or not they believe their company could win the contract, and both said "absolutely."

"Alright," Rogers replied. "Y'all both really want to compete with each other."

Things are about to get interesting.

Correction: An earlier version of this article noted that a ​recent SpaceX launch had a fiery ending without specifically stating that the crash occurred during an experimental rocket recovery attempt that didn't affect the launch itself.