At a Senate hearing Wednesday, Musk, the CEO of electric car maker Tesla Motors, pushed for opening up satellite launch services to free market competition — potentially saving the Pentagon $1 billion a year by allowing his company, SpaceX, to enter the market.
“I think that as a country, we’ve decided that competition is a good thing, and that monopolies are not,” Musk said.
Since the Department of Defense started a program in 1995 to acquire affordable launch vehicles for government satellites, it’s been dominated by to Lockheed Martin and Boeing’s joint venture, United Launch Alliance. The company’s costs have skyrocketed in recent years, to $380 million per launch — but CEO Michael Gass said its solid track record of 68 successful launches should keep it on top of the game.
“The question shouldn’t be how widely competition is used, but how wisely competition is used,” Gass said. “I think it’s important that the government knows what it’s buying.”
In a report released Wednesday, the Government Accountability Office called for introducing competition into launch acquisitions, but acknowledged that ULA’s almost 20 years of controlling the market will give it an edge in DOD contracting decisions,. The department plans to take a best-value approach in choosing from among potential competitors, meaning it will consider price, mission risk and past performance.
Starting in 2017, the Defense Department plans to launch up to 14 satellite launch missions. Musk said he was “highly confident” that SpaceX would be able to compete in the market — but for new entrants to be able to participate in the program, they need DOD certification.
Giving SpaceX that certification, Musk said, is simply a matter of free market economics, fostering lower prices and higher quality technology. Members of the Senate defense appropriations subcommittee were quick to take his side.
“We could save a lot of money in a hurry,” said Chairman Sen. Dick Durbin, D-Ill. “That’s the American way, the free market.”
Gass said that early competition between Lockheed Martin and Boeing resulted in “redundant and underutilized infrastructure,” and urged the committee to recognize the high stakes in leaving national security up to private competition.
“I believe leveraging the demand from the commercial sector is smart, but relying on commercial demand to enable national security carries huge risks, both to the rocket supplier and to its government customers,” Gass said.
Musk took aim at the Atlas V, one of ULA’s two main rocket models, for its reliance on Russian engines. In the wake of the Russian invasion of Ukraine and the ensuing diplomatic debacle, he said ULA’s supply chain shouldn’t be mixed with foreign relations.
“It doesn’t make sense to reward Russia right now with a multimillion dollar paycheck,” Musk said.
SpaceX was first awarded a contract by NASA in 2006, but national security satellite launches are organized through the Air Force.
“If our rockets are good enough for NASA, then why aren’t they good enough for the Air Force?” Musk said. “It doesn’t make sense.”