U.S. Air Force Seeks Dismissal of SpaceX Suit

by

WASHINGTON — The U.S. Air Force has asked a federal court to dismiss a key portion of the lawsuit by Space Exploration Technologies Corp. claiming that the service improperly awarded an $11 billion rocket deal to United Launch Alliance last year, according to a June 30 federal court filing.

SpaceX originally filed suit April 28 in the U.S. Court of Federal Claims to prevent the Air Force from buying rockets from ULA of Denver on a sole-source basis. Then on June 25, SpaceX attorneys filed an amended complaint, one that had been under seal until June 27.

SpaceX’s amended complaint claims the Air Force did not scrutinize ULA pricing data on the Russian-made RD-180 engine that powers ULA’s Atlas 5 rocket. Additionally, SpaceX now claims the Air Force may have shut the company out of potential business when it placed an order earlier than usual for a rocket slated to launch a GPS 3 in 2017.

In its June 30 filing, the Air Force countered, saying SpaceX lost its right to protest the ULA block buy by not challenging the solicitation when it was issued in 2012.

“The reason that it did not protest is obvious,” the Air Force said. “At the time the solicitation was issued, SpaceX had not completed the necessary certifying flights for its Falcon 9 rocket; it was very far from having a launch vehicle that could meet the agency’s requirements.”

The Air Force said SpaceX had access to a request for proposals at least 40 days before a block-buy proposal was due.

SpaceX’s first challenge, the Air Force said, “was this protest, which SpaceX filed in April 2014 — two years after it first received a copy of the solicitation.”

In the motion to dismiss the portion of the lawsuit dealing with a 36-core contract with ULA, the Air Force argues SpaceX cannot challenge the deal because the Hawthorne, California-based company did not meet the legal standard as an actual prospective bidder and had not filed a protest within 60 days of learning about the contract solicitation in 2012.

“SpaceX took no steps to get involved in the procurement at the time that the agency was planning its course,” the motion reads. “It is too late for SpaceX to try to bring a challenge to that procurement now.”

The Air Force also argues that even if SpaceX had replied, the company “would not have been a qualified bidder” because it had not completed the requisite number of certification flights.

The Air Force filed a second motion to dismiss July 2, but at press time July 3 it was still under seal.

The Air Force’s latest legal maneuvers follow SpaceX’s implication that the Air Force appears to be delaying the certification of its Falcon 9 v1.1 rocket in retaliation for filing the lawsuit.

In its June 25 amended complaint, SpaceX cited a series of public comments from Air Force officials in March and April, all of whom said they expected the Falcon 9 v1.1 to earn certification to compete for national security launches before the end of the year.

In May, however, Air Force Lt. Gen. Charles R. Davis — the Office of the Assistant Secretary of the Air Force for Acquisition’s military deputy — said the service expects to certify SpaceX by March 2015.

The difference has caused SpaceX and its founder, Elon Musk, to question the delay.

“Once SpaceX filed this action … the Air Force changed its projections regarding the timing of SpaceX’s certification,” the amended complaint said.

The Air Force has said it is spending more than $60 million and has 100 employees working on the process.

SpaceX’s amended complaint also questions the Air Force’s purchase of launch services for GPS 3-2 — the second of eight next-generation GPS satellites currently in production at Lockheed Martin. When the Air Force included the planned 2017 launch of GPS 3-2 in the block-buy contract it gave ULA in December, SpaceX alleges, the Air Force broke with its normal practice of buying a rocket two years before launch. The timing of the order creates an inconsistency in acquisition processes and shuts SpaceX out of the competition, the amended complaint says.

“Had the Air Force properly waited to order this launch vehicle until two years prior to its mission launch date, SpaceX would have been able to compete for and likely win that launch vehicle,” the complaint states.

SpaceX’s refiled complaint also includes information from a June 20 letter from Sen. John McCain (R-Ariz.) asking the Pentagon’s acquisition czar about claims that RD-Amross earns profits of more than 200 percent on each Russian-made RD-180 engine it sells to ULA. The RD-180 is built by NPO Energomash of Russia and sold to ULA by RD-Amross, a joint venture between Energomash and United Technologies Corp. of Hartford, Connecticut.