May 22, 2019 / 8:48 PM / in a month

Musk's SpaceX sues U.S. Air Force over rocket-building contracts: filings

ORLANDO, Fla. (Reuters) - Billionaire Elon Musk’s SpaceX accused the U.S. Air Force of breaking contracting rules when it awarded money to three rocket makers but passed on Musk’s rival bid, and said the tender should be reopened, according to a court filing unsealed on Wednesday.

FILE PHOTO: SpaceX headquarters is shown in Hawthorne, California, U.S. September 19, 2018. REUTERS/Mike Blake/File Photo

In the complaint, Space Exploration Technologies Corp said contracts were awarded for three “unbuilt, unflown” rocket systems that would not be ready to fly under the government’s timeline, “defeating the very objectives” outlined by the Air Force’s program.

SpaceX asked the court to force the Air Force to reopen the $2.3 billion Launch Service Agreements competition and reconsider the Hawthorne, California-based company’s proposal.

The agreement is part of a Department of Defense initiative to assure constant military access to space and curb reliance on Russian-made RD-180 engines.

In the watershed race for dominance in the space industry, new entrants including SpaceX and billionaire Jeff Bezos’ Blue Origin, compete for lucrative contracts for military launch services. The arena has been long dominated by incumbents like Boeing Co-Lockheed Martin Corp’s United Launch Alliance (ULA).

ULA was granted $967 million under the program for developing its heavy-lift Vulcan rocket, Blue Origin won $500 million for its New Glenn rocket, and Northrop Grumman Corp was awarded $791.6 million for its OmegA rocket development.

In separate court filings this week, all three companies argued they should be parties to the lawsuit because of their direct financial interest in its outcome.

A SpaceX spokesperson said the company sued to “ensure a level playing field for competition.”

Representatives for the Air Force and ULA did not immediately respond to requests for comment. Blue Origin declined to comment.

SpaceX’s complaint was filed with the U.S. Court of Federal Claims last Friday under seal, along with a request for the court to keep the proceedings secret under a protective order, citing proprietary information. A redacted complaint was filed Wednesday.

SpaceX alleged the Air Force broke contracting rules on five different counts and asked the court to halt deliveries of the award to the three companies and force a re-evaluation of the proposals.

The Air Force rejected a formal objection from SpaceX in April regarding the terms of the awards.

SpaceX has sued the government over contracts before, most prominently in 2014 to protest a multibillion-dollar, non-compete contract for 36 rocket launches to United Launch Alliance. It dropped the lawsuit after the Air Force agreed to open up the competition.

Reporting by Joey Roulette in Orlando, Florida; Editing by Eric M. Johnson and Richard Chang

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