The Space Force, having chosen SpaceX and ULA as its sole launch providers, officially ended on December 31, 2020, its rocket development contracts with Blue Origin and Northrop Grumman.
The Air Force awarded Launch Service Agreements to Blue Origin, Northrop Grumman and United Launch Alliance. These were six-year public-private partnerships where both the government and the contractors agreed to invest in rocket development and infrastructure required to compete in the National Security Space Launch program.
The plan from day one was to discontinue the LSAs with companies that did not win a National Security Space Launch procurement contract. Blue Origin and Northrop Grumman lost to ULA and SpaceX, which were selected in August 2020. The Space and Missile Systems Center confirmed in a statement to SpaceNews that the LSAs with Blue Origin and Northrop Grumman ended in Dec. 31, 2020.
From October 2018 through December 2020, Blue Origin was paid $255.5 million. The original six-year agreement was worth $500 million. Northrop Grumman got $531.7 million over that same period, nearly two-thirds of the total value of the LSA which was $792 million.
This whole deal stinks to high heaven. First, it never made any sense for the military to restrict bidding on future launches to just two companies. Such a restrictions smells of a cartel deal designed to play favorites, something the government should not do. It also ends up costing the government more, as it limits competition.
Second, the money handed out sure looks like nice pay-offs to all these big companies, designed to pay company salaries rather than real design work. SpaceX chose not to take it, because it did not want to be beholden to the military’s bureaucracy in how it developed Starship/Super Heavy. That choice has proven wise, as the deal slowed development of both Blue Origin’s New Glenn and ULA’s Vulcan rockets by at least a year, while SpaceX Starship development has moved forward far quicker.
Moreover, its seems very inappropriate for ULA to still be getting this government cash while SpaceX does not. In truth, neither should get a dime unless they actually sign a contract to launch something for the Space Force. Otherwise it is just a form of kickback and a misuse of the taxpayer’s money.
Not that my complaining here will change anything. The big aerospace industry has been addicted to these kind of government payoffs for decades, and apparently will continue to be so addicted for the foreseeable future.
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