6 ms·

ULA bows out of Pentagon launch competition, paving way for SpaceX

74 points by PLenz 11y ago

pjscott 11y ago
ULA's reasoning was pretty straightforward. The main reason they dropped out of the competition is because the bidding was to be decided largely on price, and they can't compete with SpaceX on price -- their selling point these days is that they're the boring, less-risky option that nobody ever got fired for buying. This is totally a valid selling point, until SpaceX gets a longer track record, but GPS satellites are the kind of payload that wouldn't be too disastrous to lose, so in this case going for the cheaper launch option makes a lot of sense.
- peteretep 11y ago
  > This is totally a valid selling point Respectfully, a selling point is only valid if your customer base care.
  - sslayer 11y ago
    Once you start losing a couple of 250 -750 million dollar payloads, your customer base will care. This isn't KSP.
    - ceejayoz 11y ago
      If they're not time critical, chances are they don't care that much. They've got insurance on the launch and payload. It'd have to happen enough for the premiums to start going up.
      - rory096 11y ago
        The US government doesn't buy launch insurance.
        ceejayoz 11y ago
        http://www.insurancejournal.com/news/west/2012/05/22/248566.htm http://www.insurancejournal.com/news/west/2012/05/22/248566.... says NASA self-insures, and the CRS missions appear to carry commercial insurance http://www.insurancejournal.com/news/national/2014/10/29/345363.htm http://www.insurancejournal.com/news/national/2014/10/29/345...
        rory096 11y ago
        >NASA self-insures This just means they don't insure and instead absorb losses. AFAIK they don't even set aside a pool of money like corporate self-insurance tends to do. >CRS missions appear to carry commercial insurance This is to (partially) cover the losses to the commercial space companies, since NASA withholds money in the event of a failure. None of it covers the payload. (Actually at least in Orbital's case they get paid a portion of the CRS contract, since there's technically two milestones – ignition/liftoff and mission success. They lose out on the latter.[1]) [1] http://spacenews.com/42658orbital-sciences-entitled-to-partial-nasa-payment-for-antares-failure/ http://spacenews.com/42658orbital-sciences-entitled-to-parti...
        hydrogen18 11y ago
        Thanks for bringing this up. This is a oft forgotten point as to why private space flight is so difficult in the US. Private ventures can't compete when the rules are set up so they've been kneecap'd from the start. Ironically, I can't drive my car without insurance but I can fly a plane without it.
- SHIT_TALKER 11y ago
  ULA's reasoning was pretty straightforward. The main reason they dropped out of the competition is because the bidding was to be decided largely on price, The reason they had to drop out is because they're a space launch company without any goddamned engines. The chatter about the bid process is just the typical jawing members of the defense cartel engage in when they deign to speak of competitors. Sometimes they're even successful in reopening the bid process. [1] [1]: https://en.wikipedia.org/wiki/KC-X https://en.wikipedia.org/wiki/KC-X
  - fleitz 11y ago
    As they say in the space industry... All rocket, no engines.
    - tgb 11y ago
      I don't understand. Can you explain this and the parent's comment on engines?
      - danmaz74 11y ago
        The ULA launchers use the Russian produced RD-180 engine
        avmich 11y ago
        Only Atlas-V. Delta-IV uses American hydrogen engines (RS-68); however Delta-IV is rather more expensive than Atlas-V. Even though Atlas-IV is rather more expensive than Falcon-9 - which uses simpler, less performant but cheaper technology.
      - JumpCrisscross 11y ago
        ULA's vehicles were designed around the RD-180 rocket engine [1][2]. This is an engine built and designed in Russia. After Russia annexed Crimea, Congress banned the Pentagon from using Russian rocket engines. Russia responded by counter-banning the Pentagon from using its engines [3]. This made things complicated for ULA. [1] https://en.wikipedia.org/wiki/RD-180 https://en.wikipedia.org/wiki/RD-180 [2] http://www.ulalaunch.com/faqs-rd-180.aspx http://www.ulalaunch.com/faqs-rd-180.aspx [3] http://www.bloomberg.com/news/articles/2014-05-13/russia-bans-rocket-engine-sales-to-u-s-military http://www.bloomberg.com/news/articles/2014-05-13/russia-ban...
Animats 11y ago
This would be OK if Space-X had fixed their problems with the Falcon 9. Space-X has been very quiet - they haven't issued a news release for almost four months now. There's still no date for the next launch. Spaceflight Now said "early November" in an article back in September[1], but that date has come and gone. There's "TBD" launch date in December, but that's probably not realistic. The Falcon 9 explosion, Space-X claims, was due to a strut being far under-strength. When they tested their inventory of struts made by a contractor, some failed at 20% of the rated load. Space-X hasn't provided further details. They claim to be "tightening up their supply chain". That probably means requiring 100% traceability of every structural part back to the raw material and much more testing at incoming inspection. This is standard in aviation (which is why structural failure airplane crashes of production aircraft are very rare) but something Space-X wasn't doing. One wonders what other problems they've found as they put part after part through strength tests. Probably more than they've admitted, or they'd be launching by now. [1] http://spaceflightnow.com/2015/09/01/falcon-9-rocket-to-be-grounded-longer-than-expected/ http://spaceflightnow.com/2015/09/01/falcon-9-rocket-to-be-g...
- snaily 11y ago
  One should also take into account that the return to flight is going to be with what is called "Falcon 9 Full Thrust" - essentially, Falcon 9 v1.2 - a lengthened and upgraded rocket. Some of the extra delays have undoubtedly been due to teething problems with this new stack.
- InclinedPlane 11y ago
  You're just not paying attention. They've wrapped up their investigation of the problem, they've conclusively identified it and figured out how to prevent it from happening again (both through more thorough part testing and through beefing up the specs on the particular component so it has even more margin in a "belt and suspenders" approach). They've bundled their mitigation techniques into the roll-out of the next iteration of the F9 (sometimes called the v1.2 but officially called the "FT" or "Full Thrust" version) which will be the version which gets launched from now on. They've done a static fire test on the first stage that has a planned launch in early December and they've done all the other prep-work for a launch then. It's very likely that if the weather cooperates they'll have a return to flight within about 3 weeks.
desdiv 11y ago
Dumb question, but what's preventing SpaceX from raising their bid significantly now that they know they're guaranteed to win? Not just in this case, but plenty of government contracts are sole-sourced. How does the price get decided when there's no competition?
- w1ntermute 11y ago
  Not sure about this one, but a lot of government contracts are cost-plus: https://en.wikipedia.org/wiki/Cost-plus_contract https://en.wikipedia.org/wiki/Cost-plus_contract
  - mattlutze 11y ago
    The federal government, defense in particular, has been moving to awarding large omnibus-style "contract vehicles" to a set of companies (like a first gate check), then out of those contract vehicles awarding Firm Fixed-Price contracts. It helps stop the government from telling the contractor to do something new half-way through the contract, and for the contractor to then bump billing without new competition (the race condition leading to a 400% expected cost in a jet engine for example...). Instead, the contract terms are battled over in the beginning to line out exactly what the contractor will deliver, and up to how much they can bill for it (the government, and public, always appreciate it if you can find a way to not spend all the money). If the government decides, part way through the contract period, that it wishes the contractor to do something extra, a new supplemental contract is drawn up and new extra funding requested and maybe approved. This supplement generally has to be published I think, so other contractors and watch-dogs can call foul if the extra work is significant enough that it should be re-competed. The risk is that if the terms aren't fantastic and the goal of the contract complex, that you can end up in a quagmire of supplemental contract nightmares. Some further reading on the benefits and risks of the method: 0 - memo with recommendations of FFP as a more prominent consideration in new contracts to reduce potential costs to the government. 1 - presser on Office of Management and Budgets' directives to retool contract staffs toward FFP. 2 - Discussion in WSJ of why it's not always the best idea. 3 - best practices in the contract writing process. 0: https://www.whitehouse.gov/sites/default/files/omb/assets/procurement_gov_contracting/increasing_competition_10272009.pdf https://www.whitehouse.gov/sites/default/files/omb/assets/pr... 1: http://archive.federaltimes.com/article/20091102/ACQUISITION03/911020303/OMB-pushes-more-fixed-price-contracts http://archive.federaltimes.com/article/20091102/ACQUISITION... 2: http://www.wsj.com/articles/SB10001424052748704121504574593662623381376 http://www.wsj.com/articles/SB100014240527487041215045745936... 3: https://www.whitehouse.gov/omb/procurement_guide_pbsc https://www.whitehouse.gov/omb/procurement_guide_pbsc
InclinedPlane 11y ago
It's pretty straightforward, entering competition would be a lose/lose/lose prospect for ULA at this point. First off, they can't meet SpaceX's prices, no matter what, so they're unlikely to win out on a straight-up bid on a single launch (they love those block buys). Secondly, they don't have any more RD-180s to build more Atlas V's, which means they can't realistically promise any future Atlas launches. If they did they'd have to crawl back and say "sorry, can't do it." Alternately, they could try to put forward a Delta IV launch as an option, but that's even more expensive. Thirdly, putting in a singular bid at this point and trying to cut their profit margin to the bone as much as possible would hit them doubly hard. On the one hand it would mean they'd make no money. On the other hand it would reveal publicly their true costs, and make it blatantly obvious how much they're over-charging on launches with the block buys plus launch assurance subsidy (which run at over $300 million per core, or so). They're better off laying low and just hoping they can work their connections for more back-door block buys in the future.
oska 11y ago
Not saying it shouldn't be submitted here, but discussion of SpaceX news is one thing that reddit does better than HN, thanks to the generally excellent moderation of the /r/spacex subreddit. Here's the corresponding link to this story on that sub: https://www.reddit.com/r/spacex/comments/3t31gt/ula_says_it_will_not_bid_for_us_gps_satellite/ https://www.reddit.com/r/spacex/comments/3t31gt/ula_says_it_...
- smackfu 11y ago
  As you would expect for a dedicated forum, it is very pro-SpaceX and anti-ULA.
  - dkbrk 11y ago
    I really don't think that's an accurate characterisation. Space launch isn't a zero-sum game, and SpaceX and ULA aren't sports teams. You don't have to cheer for one at the expense of the other. After all we're all just humans stuck on a rather small planet, painting ULA in any sense as the "bad guys" is extremely silly given a little perspective. If SpaceX pushed ULA entirely out of the commercial launch market it would produce yet another monopoly, and while Elon's motivations are primarily for the betterment of humanity healthy competition is much preferable. I, for one, am quite excited about ULA's planned Vulcan rocket [0] which incorporates reusability of the engine section, and hope it will be a success. I'm sure you will find that the most active members of /r/spacex feel much the same way. [0]: https://en.wikipedia.org/wiki/Vulcan_%28rocket%29 https://en.wikipedia.org/wiki/Vulcan_%28rocket%29
    - smackfu 11y ago
      >SpaceX and ULA aren't sports teams The reality is that a lot of people treat them exactly that way. They are on team SpaceX, and they root for them and against ULA, who is seen as the establishment who gets ahead using politics and lobbying rather than tech.
digerata 11y ago
One ULA reason for dropping out: "the Air Force used a procurement process that would give a lot of weight to the prices companies bid" That's hysterical! The gall of the Air Force to do such a thing!

74 points by PLenz 11y ago

ULA's reasoning was pretty straightforward. The main reason they dropped out of the competition is because the bidding was to be decided largely on price, and they can't compete with SpaceX on price -- their selling point these days is that they're the boring, less-risky option that nobody ever got fired for buying. This is totally a valid selling point, until SpaceX gets a longer track record, but GPS satellites are the kind of payload that wouldn't be too disastrous to lose, so in this case going for the cheaper launch option makes a lot of sense.

peteretep 11y ago
> This is totally a valid selling point Respectfully, a selling point is only valid if your customer base care.
- sslayer 11y ago
  Once you start losing a couple of 250 -750 million dollar payloads, your customer base will care. This isn't KSP.
  - ceejayoz 11y ago
    If they're not time critical, chances are they don't care that much. They've got insurance on the launch and payload. It'd have to happen enough for the premiums to start going up.
    - rory096 11y ago
      The US government doesn't buy launch insurance.
      - ceejayoz 11y ago
        http://www.insurancejournal.com/news/west/2012/05/22/248566.htm http://www.insurancejournal.com/news/west/2012/05/22/248566.... says NASA self-insures, and the CRS missions appear to carry commercial insurance http://www.insurancejournal.com/news/national/2014/10/29/345363.htm http://www.insurancejournal.com/news/national/2014/10/29/345...
        rory096 11y ago
        >NASA self-insures This just means they don't insure and instead absorb losses. AFAIK they don't even set aside a pool of money like corporate self-insurance tends to do. >CRS missions appear to carry commercial insurance This is to (partially) cover the losses to the commercial space companies, since NASA withholds money in the event of a failure. None of it covers the payload. (Actually at least in Orbital's case they get paid a portion of the CRS contract, since there's technically two milestones – ignition/liftoff and mission success. They lose out on the latter.[1]) [1] http://spacenews.com/42658orbital-sciences-entitled-to-partial-nasa-payment-for-antares-failure/ http://spacenews.com/42658orbital-sciences-entitled-to-parti...
      - hydrogen18 11y ago
        Thanks for bringing this up. This is a oft forgotten point as to why private space flight is so difficult in the US. Private ventures can't compete when the rules are set up so they've been kneecap'd from the start. Ironically, I can't drive my car without insurance but I can fly a plane without it.
SHIT_TALKER 11y ago
ULA's reasoning was pretty straightforward. The main reason they dropped out of the competition is because the bidding was to be decided largely on price, The reason they had to drop out is because they're a space launch company without any goddamned engines. The chatter about the bid process is just the typical jawing members of the defense cartel engage in when they deign to speak of competitors. Sometimes they're even successful in reopening the bid process. [1] [1]: https://en.wikipedia.org/wiki/KC-X https://en.wikipedia.org/wiki/KC-X
- fleitz 11y ago
  As they say in the space industry... All rocket, no engines.
  - tgb 11y ago
    I don't understand. Can you explain this and the parent's comment on engines?
    - danmaz74 11y ago
      The ULA launchers use the Russian produced RD-180 engine
      - avmich 11y ago
        Only Atlas-V. Delta-IV uses American hydrogen engines (RS-68); however Delta-IV is rather more expensive than Atlas-V. Even though Atlas-IV is rather more expensive than Falcon-9 - which uses simpler, less performant but cheaper technology.
    - JumpCrisscross 11y ago
      ULA's vehicles were designed around the RD-180 rocket engine [1][2]. This is an engine built and designed in Russia. After Russia annexed Crimea, Congress banned the Pentagon from using Russian rocket engines. Russia responded by counter-banning the Pentagon from using its engines [3]. This made things complicated for ULA. [1] https://en.wikipedia.org/wiki/RD-180 https://en.wikipedia.org/wiki/RD-180 [2] http://www.ulalaunch.com/faqs-rd-180.aspx http://www.ulalaunch.com/faqs-rd-180.aspx [3] http://www.bloomberg.com/news/articles/2014-05-13/russia-bans-rocket-engine-sales-to-u-s-military http://www.bloomberg.com/news/articles/2014-05-13/russia-ban...

Animats 11y ago

This would be OK if Space-X had fixed their problems with the Falcon 9. Space-X has been very quiet - they haven't issued a news release for almost four months now. There's still no date for the next launch. Spaceflight Now said "early November" in an article back in September[1], but that date has come and gone. There's "TBD" launch date in December, but that's probably not realistic. The Falcon 9 explosion, Space-X claims, was due to a strut being far under-strength. When they tested their inventory of struts made by a contractor, some failed at 20% of the rated load. Space-X hasn't provided further details. They claim to be "tightening up their supply chain". That probably means requiring 100% traceability of every structural part back to the raw material and much more testing at incoming inspection. This is standard in aviation (which is why structural failure airplane crashes of production aircraft are very rare) but something Space-X wasn't doing. One wonders what other problems they've found as they put part after part through strength tests. Probably more than they've admitted, or they'd be launching by now. [1] http://spaceflightnow.com/2015/09/01/falcon-9-rocket-to-be-grounded-longer-than-expected/ http://spaceflightnow.com/2015/09/01/falcon-9-rocket-to-be-g...

snaily 11y ago
One should also take into account that the return to flight is going to be with what is called "Falcon 9 Full Thrust" - essentially, Falcon 9 v1.2 - a lengthened and upgraded rocket. Some of the extra delays have undoubtedly been due to teething problems with this new stack.
InclinedPlane 11y ago
You're just not paying attention. They've wrapped up their investigation of the problem, they've conclusively identified it and figured out how to prevent it from happening again (both through more thorough part testing and through beefing up the specs on the particular component so it has even more margin in a "belt and suspenders" approach). They've bundled their mitigation techniques into the roll-out of the next iteration of the F9 (sometimes called the v1.2 but officially called the "FT" or "Full Thrust" version) which will be the version which gets launched from now on. They've done a static fire test on the first stage that has a planned launch in early December and they've done all the other prep-work for a launch then. It's very likely that if the weather cooperates they'll have a return to flight within about 3 weeks.

desdiv 11y ago

Dumb question, but what's preventing SpaceX from raising their bid significantly now that they know they're guaranteed to win? Not just in this case, but plenty of government contracts are sole-sourced. How does the price get decided when there's no competition?

w1ntermute 11y ago
Not sure about this one, but a lot of government contracts are cost-plus: https://en.wikipedia.org/wiki/Cost-plus_contract https://en.wikipedia.org/wiki/Cost-plus_contract
- mattlutze 11y ago
  The federal government, defense in particular, has been moving to awarding large omnibus-style "contract vehicles" to a set of companies (like a first gate check), then out of those contract vehicles awarding Firm Fixed-Price contracts. It helps stop the government from telling the contractor to do something new half-way through the contract, and for the contractor to then bump billing without new competition (the race condition leading to a 400% expected cost in a jet engine for example...). Instead, the contract terms are battled over in the beginning to line out exactly what the contractor will deliver, and up to how much they can bill for it (the government, and public, always appreciate it if you can find a way to not spend all the money). If the government decides, part way through the contract period, that it wishes the contractor to do something extra, a new supplemental contract is drawn up and new extra funding requested and maybe approved. This supplement generally has to be published I think, so other contractors and watch-dogs can call foul if the extra work is significant enough that it should be re-competed. The risk is that if the terms aren't fantastic and the goal of the contract complex, that you can end up in a quagmire of supplemental contract nightmares. Some further reading on the benefits and risks of the method: 0 - memo with recommendations of FFP as a more prominent consideration in new contracts to reduce potential costs to the government. 1 - presser on Office of Management and Budgets' directives to retool contract staffs toward FFP. 2 - Discussion in WSJ of why it's not always the best idea. 3 - best practices in the contract writing process. 0: https://www.whitehouse.gov/sites/default/files/omb/assets/procurement_gov_contracting/increasing_competition_10272009.pdf https://www.whitehouse.gov/sites/default/files/omb/assets/pr... 1: http://archive.federaltimes.com/article/20091102/ACQUISITION03/911020303/OMB-pushes-more-fixed-price-contracts http://archive.federaltimes.com/article/20091102/ACQUISITION... 2: http://www.wsj.com/articles/SB10001424052748704121504574593662623381376 http://www.wsj.com/articles/SB100014240527487041215045745936... 3: https://www.whitehouse.gov/omb/procurement_guide_pbsc https://www.whitehouse.gov/omb/procurement_guide_pbsc

InclinedPlane 11y ago

It's pretty straightforward, entering competition would be a lose/lose/lose prospect for ULA at this point. First off, they can't meet SpaceX's prices, no matter what, so they're unlikely to win out on a straight-up bid on a single launch (they love those block buys). Secondly, they don't have any more RD-180s to build more Atlas V's, which means they can't realistically promise any future Atlas launches. If they did they'd have to crawl back and say "sorry, can't do it." Alternately, they could try to put forward a Delta IV launch as an option, but that's even more expensive. Thirdly, putting in a singular bid at this point and trying to cut their profit margin to the bone as much as possible would hit them doubly hard. On the one hand it would mean they'd make no money. On the other hand it would reveal publicly their true costs, and make it blatantly obvious how much they're over-charging on launches with the block buys plus launch assurance subsidy (which run at over $300 million per core, or so). They're better off laying low and just hoping they can work their connections for more back-door block buys in the future.

oska 11y ago

Not saying it shouldn't be submitted here, but discussion of SpaceX news is one thing that reddit does better than HN, thanks to the generally excellent moderation of the /r/spacex subreddit. Here's the corresponding link to this story on that sub: https://www.reddit.com/r/spacex/comments/3t31gt/ula_says_it_will_not_bid_for_us_gps_satellite/ https://www.reddit.com/r/spacex/comments/3t31gt/ula_says_it_...

smackfu 11y ago
As you would expect for a dedicated forum, it is very pro-SpaceX and anti-ULA.
- dkbrk 11y ago
  I really don't think that's an accurate characterisation. Space launch isn't a zero-sum game, and SpaceX and ULA aren't sports teams. You don't have to cheer for one at the expense of the other. After all we're all just humans stuck on a rather small planet, painting ULA in any sense as the "bad guys" is extremely silly given a little perspective. If SpaceX pushed ULA entirely out of the commercial launch market it would produce yet another monopoly, and while Elon's motivations are primarily for the betterment of humanity healthy competition is much preferable. I, for one, am quite excited about ULA's planned Vulcan rocket [0] which incorporates reusability of the engine section, and hope it will be a success. I'm sure you will find that the most active members of /r/spacex feel much the same way. [0]: https://en.wikipedia.org/wiki/Vulcan_%28rocket%29 https://en.wikipedia.org/wiki/Vulcan_%28rocket%29
  - smackfu 11y ago
    >SpaceX and ULA aren't sports teams The reality is that a lot of people treat them exactly that way. They are on team SpaceX, and they root for them and against ULA, who is seen as the establishment who gets ahead using politics and lobbying rather than tech.

digerata 11y ago

One ULA reason for dropping out: "the Air Force used a procurement process that would give a lot of weight to the prices companies bid" That's hysterical! The gall of the Air Force to do such a thing!