The terms of this solicitation make it seem like almost a set-aside for SpaceX. That’s not a bad thing from a taxpayer’s perspective. SpaceX is certainly higher risk than ULA, but they’re also considerably less expensive. With the GPS constellation currently healthy (30 available satellites vs. a requirement for only 24) and with — by the time the GPS IIIA-4 satellite launches — an assembly line kicking out a new satellite every few months, the Air Force can afford to take a chance with a new provider to save on launch costs. In fact, it’s the perfect time to do so.

But for the expensive NRO birds — which are said to cost as much as an aircraft carrier — it makes no sense to go with a low-cost provider at the expense of reliability. Those solicitations should be Best Value, not LPTA, and ULA is right to press for that. The result for the Air Force will be a high / low split, with ULA taking the expensive missions where reliability is king and SpaceX taking the less expensive missions where it is not.

Long term, SpaceX will move up the value chain and gain ever-increasing capability and ULA will reduce their costs. If the Air Force plays their cards right they’ll end up with two providers that are both low-cost and high-capability.

That’ll be a good thing.