SpaceX challenges Air Force launch services decision in Federal Claims Court

By Courtney Albon  / May 22, 2019

SpaceX has filed a lawsuit against the Air Force in the U.S. Court of Federal Claims, protesting the service's October 2018 Launch Services Agreement competition.

The claim was filed May 17, and has been sealed at the company's request. SpaceX told Inside Defense in a statement today that the company is challenging the Air Force's source-selection decision "to ensure a level playing field for competition."

A SpaceX spokeswoman said the company had submitted an "agency objection" to the award, which the service denied two weeks ago.

"Even though we requested a dispute resolution process, the Air Force declined to engage on any discussion about our detailed, substantive objection to its Launch Services Agreement award decision," the spokeswoman said.

The service awarded LSA other transaction agreements to Blue Origin, Northrop Grumman and United Launch Alliance to continue development of new launch vehicles through a public-private partnership. SpaceX, which along with ULA is one of two companies currently cleared to launch national security space missions, did not receive an award.

The Air Force has since released a request for proposals for the next phase of competition, which will award two companies contracts to provide launch services for a five-year manifest. SpaceX has said it plans to compete for those launches, and the spokeswoman said this week that the company does not wish to delay that competition.

"SpaceX's complaint filed with the Court of Federal Claims is solely to ensure that we are afforded a legitimate and fair opportunity by an independent party to review the Air Force's LSA award decision, which was flawed and inconsistent with the stated source selection criteria and objectives of the program," the spokeswoman said.

In a new, 79-page, redacted filing released today, SpaceX claims the Air Force deviated from the original source-selection criteria, failing to note its preference for government processes and facilities and using a risk-evaluation metric different from what was presented in the solicitation.

The company claims that the Air Force's "flawed decision" will "cause substantial harm to SpaceX in the final phase of this procurement as SpaceX's competitors will have the benefit of government investment dollars and government cooperation in the development and certification of the competing offerors' approaches."

SpaceX is seeking an injunction to prevent additional Air Force investment in the winning companies' LSAs.

Throughout the document, SpaceX touts its unique position as a certified National Security Space Launch provider with a strong commercial business and a mature LSA offering. The company confirmed in the claim that it proposed its existing Falcon 9 and Falcon Heavy systems for missions launched before 2025 and its Starship rocket -- previously dubbed the Big Falcon Rocket -- for the later launches.

According to the company, the Air Force determined that despite SpaceX including two existing, proven rockets in its proposal, its developmental rocket presented enough risk to render its entire proposal the "highest-risk offering."

However, the claim suggests that the selection of three companies that share several major components -- Northrop and Blue Origin are both building major subsystem components of ULA's Vulcan rocket -- presents a significant risk to the Defense Department that wasn't accounted for in the source-selection process.

"The LSA award decision to invest in three launch solutions concepts that depend on common critical systems is at odds with the LSA solicitation's stated objective, per national policy, 'to ensure that there are two reliable sources for all national security launches,'" the claim states.

SpaceX calls the designs from ULA, Northrop and Blue Origin "conceptual paper rockets" and takes particular aim at ULA, saying the Air Force understated the latter company's cost by "hundreds of millions of dollars."

ULA, Blue Origin and Northrop have all filed separate motions to intervene in the lawsuit.