SpaceX, the Air Force and Mediation

Late last week, SpaceX’s lawsuit against the U.S. Air Force regarding the Evolved Expendable Launch Vehicle Program took a bit of a surprising turn when Federal Judge Susan Braden ordered both parties to enter into mediation.

While the Judge has not ruled on a previous motion to dismiss filed by the Air Force, she did dismiss a similar complaint by ULA as Defendant-Intervenor on the basis that ULA lacked standing to file the complaint. Regarding mediation, ULA is not to be included unless either party says the launch provider’s presence would be helpful.. Finally, all parties were also ordered to refrain from speaking to the press.

The schedule for proposed mediation is tight, with the Air Force ordered to disclose the details of the launches it plans to conduct under the block buy to SpaceX by Augest 8th.

Specifically: “On or before August 8, 2014, under seal, the Government will provide Plaintiff’s counsel with documents identifying the missions that the United States Air Force (“Air Force”) has ordered or intends to order under the “block buy” contract,
together with sufficient technical information to allow Plaintiff to determine
whether and when it can perform those missions.”

Then the SpaceX Response: “On or before September 10, 2014, under seal, Plaintiff will provide the Government with a letter to identify issues proposed to be mediated, proposed procedures, proposed participants, including a proposed mediator, proposed timetable for mediation, and objective to be accomplished.”

Finally: “On or before October 14, 2014, the Government will evaluate Plaintiff’s proposal and notify the court, in writing and on the record, if, and the date by which, it will request the Air Force, the United States Department of Defense, and the United States Department of Justice’s permission to engage in mediation.”

Only after that point would the actual mediation begin. For a case which has already had more than its share of twists and turns, the direction to attempt mediation is an interesting development which offers both SpaceX and the Air Force a path which could be acceptable to both.

In the first place, it provides the opportunity for SpaceX to clarify exactly what payloads it can potentially deliver for the Air Force and NRO under the EELV program. A key point in the original complaint filed by SpaceX concerns the fact that the Air Force has apparently been reluctant to release payload information, while simultaneously claiming that the Falcon 9 cannot loft certain payloads which SpaceX believes it can.

Of course from the Air Force point of view as evidenced by the motion to dismiss, SpaceX should not have any standing whatsoever because it did not protest the original award. The SpaceX counterpoint is two fold, the Air Force did not announce or conduct the bid in a conventional manner, even while it effectively misled SpaceX by offering up the carrot of up to 14” additional launch opportunities which were subsequently reduced to seven, and possibly even fewer. It was only when what appeared to be an acceptable compromise was taken off the table that SpaceX filed suit.

At this point, the suit is inextricably tied to the issue of the Atlas V booster and the Russian built RD-180 which powers it.

Much of the hand wringing over the possible loss of access to the RD-180 engine for the Atlas-V, and the subsequent costs of re-assigning launches to the more expensive Delta IV has overlooked the offsetting savings to be gained by awarding some number of launches to the Falcon 9. A definitive tally of the launches SpaceX could provide offer a starting point in establishing a realistic modification to the block buy which by all rights should not require a SpaceX lawsuit to instigate a re-examination in the first place. As if the annexation of Crimea and subsequent threats to withold the RD-180 were not cause enough, the further deterioration in U.S. / Russian relations in the wake of the Malaysia Air Flight 17 shoot down should have demanded a reexamination and shift towards the Delta IV even if there were no SpaceX.

Fortunately for everyone but ULA however, there is a SpaceX, and thus a very credible and financially preferable alternative to the Atlas V. While there has been no further indication that Russia will actually halt export of the RD-180, the optics, strategy and morality for defending ongoing dependence are simply dreadful. Almost inexplicably, the United States Air Force and national security establishment are directly supporting a Russian military and its industrial base which are fomenting war on the European continent, and in seeking to dismiss the SpaceX suit, doubled down on that course.

Court imposed mediation offers a possible way to begin backing out of a deal which should never have been made in the first place.

One of the most interesting aspects, and one which gives the Air Force an honorable exit is the role of timing over the next several months. Presumably the push towards mediation reflects a judicial mindset which holds that due to the wide array of geopolitical factors involved, a strict legalistic interpretation, one which may even favor the Air Force position, may not be in the best practical interests of the United States. In other words, national priorities may trump both process and profit. At the same time, national priorities also call for reliably launching national security payloads to the correct orbits on a timely basis. With ten successful flights of the Falcon 9 under its belt, including five for the Falcon 9 V1.1, SpaceX has the opportunity to move through flights six and seven in a matter of a few short weeks, and in the process fly its way out of the Aerospace Corporation’s 3/7 reliability rule as it applies to the current series.

Meeting launch timelines has traditionally been an obstacle for SpaceX, but with the next two launches scheduled to the haul the AsiaSat 8 and AsiaSat 6 satellites to GTO, on August 5th and August 25th respectively, the Air Force has the opportunity to further judge SpaceX performance on two launches which were not part of the original New Entrant criteria, but can provide valuable insight nonetheless.

Quite simply, if SpaceX successfully completes both missions in something approaching the expected timeframe, then the company will have proved through no less than seven flights the reliability of the Falcon 9 V1.1 booster. It will have also shattered the back to back launch record for any ULA product.. Even the most begrudging recognition of SpaceX’s iterative improvement process and massive flight manifest leads to the conclusion that long before it flies the first EELV class payload, the Falcon 9 will have proved itself more than capable for any mission assigned to it. The only reasonable question remaining should be the matter of the booster’s performance regarding specific payloads. It should not go unnoticed that we are already within a timeframe where if the Air Force had taken a radically different path, the Falcon 9 could already be launching certain payloads such as today’s scheduled GPS satellite aboard an Atlas V.

That it did not is both prudent and understandable, but at this point, and ten successful Falcon 9 launches later, the multitude of issues attached to the RD-180 and a disingenuous suggest that the best course for the Air Force is to enter mediation with an eye towards extricating itself from a deal which the GAO and many others pointed out was questionable to begin with. Perhaps it may cost more, perhaps it will cost less. It may engender a slightly higher level of risk for certain payloads, but then again it may not. In the end, it simply requires breaking an addiction which should have resulted in a trip to rehab years ago.

Posted in: Editorials, SpaceX

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4 Comments on "SpaceX, the Air Force and Mediation"

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  1. Well said. It should also be noted that of all Altas V configurations, only the 401 has more than 7 launches and only the 401 and 501 have five or more. Falcon 9 is cheaper AND more capable than either of those.

    • Wayne says:

      I never thought of it that way but you are absolutely correct!

      Thar is exactly how the Air Force would see it… a different configuration is a different Bird all together!

      Great point as well as a great article!

  2. Brian Swiderski says:

    There appears to have been a block of text accidentally deleted from the concluding paragraph:

    “the multitude of issues attached to the RD-180 and a disingenuous suggest that the best course for the Air Force”

    Clearly there was intended to be some additional words between “disingenuous” and “suggest.”

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