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The competition heats up: SpaceX has dropped its lawsuit against the Air Force in exchange for the opportunity to bid on more military launch contracts.
“Under the agreement, the Air Force will work collaboratively with SpaceX to complete the certification process in an efficient and expedient manner,” the statement from the two parties said. “The Air Force also has expanded the number of competitive opportunities for launch services under the EELV program while honoring existing contractual obligations.” The statement did not make clear how many competitive launch opportunities would be available or when. The Air Force has committed to seven launch awards by late 2017, but has said that number could grow to at least eight.
Each additional launch contract the Air Force puts out for competition gives SpaceX or ULA another opportunity to win about $100 million or more in business.
This is a big win for SpaceX. It is also not a surprise. As much as some Air Force officials have wanted to maintain the ULA monopoloy, their position has been weak, for both political and economic reasons. SpaceX’s costs are just too much lower, and the company continues to demonstrate its reliability and competence in launch after launch. Thus, it was practically impossible for Air Force officials to justify maintaining the block buy non-competitive contract award to ULA.