SpaceX rocket fight heads to US Congress

The United Launch Alliance Atlas V rocket lifts off last month. The company is pushing back to criticism by rival company SpaceX. Photo / AP

The last time these two companies faced off before Congress, their top executives, sitting side by side, exchanged tense, if restrained, barbs.

In the year since, the fight over lucrative contracts to launch national security satellites between billionaire Elon Musk's SpaceX and the United Launch Alliance, a joint venture between Lockheed Martin and Boeing, has grown even more contentious.

And if statements made by the companies in the days leading up to another hearing are any indication, the heightened acrimony could spill out on Tuesday before the House Armed Services Committee.

In a recent interview, Gwynne Shotwell, SpaceX's president, accused ULA of being a slow-moving monopolist that is dependent on government handouts and resistent to change.

"It's not in the ULA genetics to be an innovative company," she said. "But innovation is key to survive in this marketplace."

ULA shot back, saying it is on the verge of announcing a next-generation launch system that will ultimately replace its Atlas V and Delta IV rockets.

It also is developing a rocket engine with Blue Origin, a space company owned by Amazon founder Jeffrey P. Bezos, and has a separate engine development project with Aerojet Rocketdyne. (Bezos also owns The Washington Post.)

The latest spat is occurring as SpaceX comes close to being certified by the Pentagon, which would allow it to compete with ULA for the military launches.

It is really hard to compete against ULA when they get a billion dollars a year to cover their fixed costs.

Gwynne Shotwell, SpaceX president

SpaceX is taking aim at a ULA contract for "space launch capabilities," which it calls a billion-dollar subsidy. The contract helps cover ULA's overhead costs, a benefit that other launch providers don't have, SpaceX argues.

"It is really hard to compete against ULA when they get a billion dollars a year to cover their fixed costs," Shotwell said.

She said SpaceX has been lobbying Congress to eliminate the ULA contract. "Frankly, I think they should end it now," she said.

ULA officials said the capabilities contract has been around for years and was designed to ensure that the Pentagon could reliably launch critical payloads, such as the satellites that troops use to communicate on the battlefield.

The contract created a partnership between the Pentagon and ULA, which for years has been the sole launch provider, so that the Defense Department had deep insight into how the company was developing its space systems for military missions, which have requirements far more stringent than those for civilian launches.

"It's not a subsidy," said Chris Andrews, ULA's director of strategic planning and business development. "It's paying for and meeting very well-defined national security space requirements."

Even without the capabilities contract, Shotwell said SpaceX's prices are far lower than ULA's. At most, SpaceX would charge about $180 million for a military launch, which she said is much less expensive than ULA's average launch charge.

Musk founded the company "to change the whole game in space transportation," she said. "He wants to make space transportation very much like an airplane operation. He wants it to be accessible to the public."

ULA officials have said the company also is pushing to make space travel more accessible and is moving to aggressively cut prices and compete with SpaceX.