Sunday, April 27, 2014

Elon Musk Cries Havoc & Lets Loose the Dogs of Litigation!

          by Brian Orlotti

Elon Musk.
Space Exploration Technologies (SpaceX) founder and CEO Elon Musk has set the space industry on fire with the announcement that he will sue the US Air Force over the single-sourced, non-competed Evolved Expendable Launch Vehicle (EELV) program contract recently awarded to United Launch Alliance (ULA).

Although at first glance Musk  appears to be taking a risk by challenging the US military-industrial complex and its political allies, the move is actually the core of a long-term, and very practical strategy.

As outlined in the April 25th, 2014 Spaceref Business article "SpaceX to Sue Over EELV Sole-Sourced Contract," the Friday news conference called by Musk to make the announcement even began on a positive note by highlighting SpaceX's recent successful soft-landing of the Falcon 9 V1.1 rocket's reusable first stage off the Florida coast.

But Musk then fired the opening salvo by announcing the lawsuit, which will be posted online at on April 28th, 2014 and then formally filed with the US Court of Federal Claims. According to Musk, the lawsuit was SpaceX's only recourse in light of the EELV contract being unfairly closed to competition.

When asked by a reporter if the lawsuit was prompted merely by SpaceX's not being selected, Musk said SpaceX would be satisfied if the Air Force simply opened its contracting process to competition, be it from SpaceX or other firms. He emphasized that SpaceX's grievance was only with certain individuals within US Air Force procurement, that SpaceX is on "very good terms with the vast majority of the Air Force," and that he had informed them of the lawsuit before going public.

Musk also made of point of highlighting how the EELV certification process had been stacked against SpaceX, describing it as “a paperwork exercise.” He said that the certification hadn't resulted in any changes to the Falcon 9 and implied that the process was simply a stalling tactic used to give ULA an edge.

Musk also linked the EELV decision to the Crimean crisis, questioning the wisdom of the US Air Force's decision to purchase rockets with Russian-built engines at a time of increasing tension between the US and Russia.  Musk even stated that the EELV contract may violate current US sanctions against Russia since Russian Deputy Prime Minister Dmitry Rogozin seems to be personally benefiting from the hundreds of millions of US taxpayer dollars being sent to Russia for the engines.

The ubiquitous Dmitry Rogozin. Photo c/o RIA Novosti.
The strategy behind Musk's protest of the US Air Force's decision is multi-pronged.

First, by protesting the Air Force's decision, the EELV contract will be placed on hold as the court decides the case, giving SpaceX more time to maneuver politically (much as Blue Origin, a privately funded aerospace company set up by founder Jeff Bezos, did when it protested the lease of Kennedy Space Center Launch Complex 39A to SpaceX last year).

Second, the lawsuit will buy SpaceX more time to develop its reusable rocket technology, giving it a huge cost advantage vis-a-vis ULA.

Third, even if the court should rule in favour of ULA, the social capital SpaceX would gain as the underdog "fighting the good fight" against bigger opponents would be useful in later endeavours, such as Musk's plans to colonize Mars.

Brian Orlotti.
Whatever the outcome of this struggle, SpaceX will strengthen its image as an agent of change.

Brian Orlotti is a Toronto-based IT professional and the treasurer of the Canadian Space Commerce Association (CSCA).

1 comment:

  1. "The fall of Empire…a rising bureaucracy, a receding initiative, a freezing of caste, a damming of curiosity" - Isaac Asimov, Foundation


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