GAO Denies SpaceX Contract Protest

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WASHINGTON — The U.S. government rebuffed a protest by rocket maker Space Exploration Technologies Corp. of a contract award to rival Orbital Sciences Corp. to launch a scientific satellite for NASA.

Hawthorne, Calif.-based Space Exploration Technologies (SpaceX) in October challenged the U.S. Air Force’s sole-source contract with Dulles, Va.-based Orbital to launch a NASA lunar orbiter in 2012, arguing that the work should have been competitively awarded. In denying the protest Feb. 1, the U.S. Government Accountability Office (GAO) rejected each of the main assertions made by SpaceX.

The Air Force, acting on behalf of NASA, tapped Orbital in September to launch the Lunar Atmosphere and Dust Environment Explorer (LADEE) satellite on the new Minotaur 5 rocket, which is based in part on excess U.S. Peacekeeper missile motors. The mission profile calls for LADEE to be placed in a highly elliptical Earth orbit, after which the craft will use its on-board thrusters to reach lunar orbit. SpaceX claimed the contract violates the Commercial Space Act of 1998, which among other things requires the U.S. government to buy commercial launch services from U.S. providers whenever possible. The company argued that Orbital could not be considered a commercial provider because the Minotaur rocket uses government-provided hardware.

SpaceX said NASA improperly concluded that no cost-effective commercial services were available for the LADEE launch, and that the agency never asked SpaceX whether it could do the job. The LADEE satellite could be launched as a solo passenger aboard SpaceX’s Falcon 1e rocket or co-manifested with another satellite on the company’s larger Falcon 9 rocket, SpaceX said.

The GAO found that though NASA did not formally solicit information from U.S. commercial launch providers, it did consider all commercial options. In looking at technical specifications on SpaceX’s Web site, NASA concluded the Falcon 1e was not powerful enough to place the satellite into the proper orbit. SpaceX said the Falcon 1e rocket would be suitable if the LADEE spacecraft was outfitted with an additional Star-30 kick motor, but NASA viewed this approach as unacceptable because it would require additional funding that the agency does not have.

The GAO also sided with NASA in its determination that the Minotaur 5 provided an acceptable level of technical and schedule risk because of the flight heritage of its Peacekeeper motors, whereas the Falcon 9 would require significant government oversight to mitigate performance and schedule risks. SpaceX argued that since neither rocket has made its debut, significant government oversight would be required in any case.

The GAO also agreed with NASA that the Falcon 9 rocket would be too expensive. The government is paying Orbital $27 million for the Minotaur 5 rocket, and the total cost of the launch rises to about $46 million when all mission support costs are included, according to the GAO’s final report. SpaceX lists a price of $47 million for a Falcon 9 launch of this type, a figure that does not include significant additional government costs for mission-specific engineering and telemetry work, the GAO said.

SpaceX argued that NASA’s cost estimates are inaccurate because they do not include the cost of the Minotaur 5’s Peacekeeper motors, but the GAO said the law does not address how to account for the use of government-provided missile hardware, and that there is no requirement to do so.

As for co-manifesting LADEE with another spacecraft on a Falcon 9, NASA did not consider this an option because of the technical and schedule risk that would be introduced, the GAO report said.

The GAO dismissed SpaceX’s assertion that Congress should have been notified before the contract was awarded to Orbital. The Commercial Space Act requires that the secretary of defense certify to Congress at least 30 days prior to converting missile motors for space launch that their use will provide a savings to the government and meet all mission requirements.

The GAO ruled that, as in previous instances where missile motors have been converted for space launch, congressional notification does not have to precede contract award. Rather, it must take place before the missile motors are integrated with the launch vehicle, which typically does not take place until shortly before a launch.

“We received word of the GAO decision and we are currently reviewing its rationale to determine next best steps for this litigation,” SpaceX spokeswoman Emily Shanklin said in a Feb. 24 e-mail. “Overall, the point here is to attempt to ensure a level playing field for all launch opportunities, whether government or commercial. And before the U.S. government opts for missions relying upon converted excess ICBM assets, whose maintenance and storage costs only continue to rise, it is imperative that the government review and carefully analyze the availability and cost of domestic commercial launchers at the time of acquisition.

SpaceX will continue to aggressively pursue the enforcement of this concept.”