Musk's SpaceX Faces Competition for $3.5 Billion NASA Cargo Flights

Five of the Most Important (and Awesome) SpaceX Launches
  • Boeing, Sierra Nevada, Orbital ATK join quest for cargo award
  • NASA to announce new contract winner as early as Thursday

Less than a decade after its first rocket launch, Elon Musk’s SpaceX finds itself in an unfamiliar position.

The upstart venture is the incumbent vying to win the bulk of a $3.5 billion U.S. contract renewal while facing rivals that include Boeing Co., whose spaceflight roots date to the 1950s. At stake: a seven-year agreement to haul supplies and experiments to the International Space Station.

SpaceX's Falcon 9 rocket
SpaceX's Falcon 9 rocket
Photographer: Chris Thompson/SpaceX via Bloomberg

SpaceX is pushing the only made-in-the-USA entry in a four-way derby with Boeing, Orbital ATK Inc. and Sierra Nevada Corp., each of which relies to some extent on rockets with Russian engines. The National Aeronautics and Space Administration will award the work as soon as Thursday as it juggles support for commercial missions while Congress clamors to end U.S. dependence on the imported motors.

“This bodes well for SpaceX because they’re the only company I can see that’s completely independent of Russia,” said Marco Caceres, director for space studies at consultant Teal Group.

Launch Competitor

NASA split the initial $3.6 billion cargo-flight contract between SpaceX and Orbital in 2008, two years after Musk’s Space Exploration Technologies Corp. sent its first rocket aloft. The win helped establish SpaceX as a competitor to United Launch Alliance, the Boeing-Lockheed Martin Corp. rocket venture whose work includes military missions.

“If NASA wants to maintain or expand the work done on the space station, they need supplies, people and a way to support all the research work up there,” said Mark Sirangelo, who leads Sierra Nevada’s Space Systems business.

SpaceX and Orbital each have a setback on their commercial-cargo records. An October 2014 explosion just after liftoff destroyed an Orbital Antares rocket laden with space station cargo. In June, a SpaceX Falcon 9 blew up en route to the orbiting lab.

‘Urgent Need’

The station’s reliance on Russian and Japanese spacecraft while the U.S. craft have been grounded highlights the “immediate and urgent need for appropriate oversight and corrective action,” Republican Senators Cory Gardner of Colorado and David Vitter of Louisiana said in a Sept. 1 letter urging the Government Accountability Office to review NASA’s contracted launch services and capsules.

Increased political scrutiny may provide an incentive to NASA to add more contractors to provide “back-up options” and avoid protests by losing bidders, said Nick Taborek, an analyst with Bloomberg Intelligence.

Unless NASA can gain additional funding from Congress, bringing in new entrants would probably mean less money for the current cargo haulers. “There’s certainly a good chance the pool of bidders will be expanding, which means less revenue for Orbital and SpaceX,” Taborek said by phone.

Expanding the pool of contractors is critical, Sierra Nevada’s Sirangelo said, because Japan is preparing to wind down its cargo missions to the station after European ended its flights. NASA would “have to do more flights, or add more participants or choose a vehicle like ours that would take more cargo up,” he said.

Cargo Capsules

Boeing’s entrant is a reusable cargo version of the Starliner capsule being developed for manned NASA orbital missions later this decade. It would be carried by a United Launch Alliance Atlas V rocket. “NASA can take advantage of all the work and taxpayer dollars spent for the Commercial Crew program and re-use it for cargo,” Boeing spokeswoman Kelly Kaplan said by e-mail.

Sierra Nevada proposes a freighter variant of its Dream Chaser, a reusable orbiter that looks like a miniature cousin of the space shuttle and is designed to land on airport runways. It would have folding wings to ride inside the launch fairing atop an Atlas V or a rocket from Europe’s Arianespace SA. 

SpaceX and Orbital declined to discuss their cargo proposals. NASA had no comment this week about details of the next commercial-resupply contract.

Caceres, the space consultant, isn’t convinced that adding more contractors will solve NASA’s reliability qualms because the Atlas V is powered by Russian-made RD-180 engines -- a focal point of congressional debate over import limits.

Russian Engines

“I don’t know that three companies is better than two, if two out of the three are reliant on the same vehicle,” Caceres said. Like Boeing and Sierra Nevada, Orbital also depends on Russian engines. It used them in the Antares rocket that blew up, plans to deploy a different Russian model on a new Antares, and will put its Cygnus capsule on an Atlas V next month to resume space-station flights.

The initial supply contract proved a boon for SpaceX, which was founded in 2002 by Musk -- a PayPal Inc. co-founder -- a year before he created his signature automaker, Tesla Motors Inc. SpaceX has completed six missions under the NASA award to Orbital’s two, and also plans to restart commercial flights in December.

Gauging the full effect of NASA’s privatization of cargo trips may take years, because follow-on offerings like space tourism aren’t quite ready yet, said Micah Walter-Range, director of research and analysis with the Space Foundation.

“It has been good to keep a lot of that money in the country rather than sending it off to Russia,” Walter-Range said. Without NASA’s resupply program, “that is what we would be doing.”

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