SpaceX, U.S. Air Force To Enter Mediation over ULA Block Buy

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WASHINGTON – SpaceX and the U.S. Air Force will enter mediation later this month to resolve a lawsuit SpaceX filed contesting an $11 billion sole-source contract the Air Force gave United Launch Alliance to produce enough rocket cores to launch dozens of military satellites, according to court documents filed Jan. 13.

The new documents also raise questions about when the Air Force will make its first competitive launch contract award in nearly 15 years.

SpaceX filed a lawsuit April 28 asking the U.S. Court of Federal Claims to void a large portion of the deal, under which the Air Force ordered 36 rocket cores from ULA on a sole-source basis. Both the U.S. Department of Justice, representing the Air Force, and ULA have asked the court to dismiss the case.

In a Jan. 13 order, Judge Susan Braden denied ULA’s motion to dismiss and said SpaceX and the Air Force would begin mediation this month.

The order also said the Air Force has told the court it would not make a final decision on certain launch contract awards until later in 2015.

The names of the missions and the target date for the contract awards were redacted in the court documents. One pending contract, the award of which industry sources recently said was imminent, is to launch a satellite for the U.S. National Reconnaissance Office.

Hawthorne, California-based SpaceX and ULA of Denver bid for the contract in August, but SpaceX must win Air Force certification to launch national security missions before it can be eligible to win. That certification, until recently expected by the end of 2014, now is anticipated by mid-2015.

The delay has led to speculation that ULA would win the contract by default.

“The Air Force has advised the court that it will not make a final decision about the [REDACTED] missions until [REDACTED], 2015,” the order said.

In addition, the Air Force will also make another mission available for competition “in the near future,” the court documents said. The name of that mission was also redacted.

Remediation has long been a possibility for the case.

In July, Braden directed the Air Force to provide SpaceX with information by Aug. 18 on the missions in question to allow the company to determine which ones it could launch. She also ordered the service to explain to SpaceX how it plans to execute the block-buy contract with ULA during the next six months. Finally, Braden asked SpaceX to provide, by Sept. 10, a list of proposed issues for mediation, potential mediators and a timetable.

Braden has not yet ruled on two Justice Department motions to dismiss the case, the order said.