IS MUSK’S SPACEX BEING PUSHED ASIDE?

An individual who wishes to be completely anonymous - hence, I don't even get to thank this individual by mentioning initials, so this will have to do as a thank you - shared this story, and it may be one of those "quiet stories" whose true significance unveils itself only much later. The USSA's new procurement regulations and guidelines appear to be pushing out Elon Musk's SpaceX in favor of "other competitors," and we'll get back to that in a moment. Here's the story:

Lawmakers: Air Force launch procurement strategy undermines SpaceX

US Senator Diane Feinstein (D-CA) and Rep. Ken Calvert (R-CA) have written a letter challenging the new regulations:

They contend that the Air Force, in an effort to broaden the launch playing field, is putting SpaceX at a competitive disadvantage.

In a Feb. 4 letter addressed to Air Force Secretary Heather Wilson, Feinstein and Calvert — both with strong ties to the space industry — argue that the path the Air Force has chosen to select future launch providers creates an unfair playing field. Although SpaceX is not mentioned in the letter by name, it is clear from the lawmakers’ language that they believe the company is getting a raw deal because, unlike its major competitors, it did not receive Air Force funding to modify its commercial rockets so they meet national security mission requirements.

Feinstein and Calvert in the letter ask Wilson to “review how the Air Force intends to maintain assured access to space while preserving maximum competitive opportunities for all certified launch providers.” A copy of the letter was obtained by SpaceNews.

At issue are Launch Service Agreement contracts the Air Force awarded in October to Blue Origin, Northrop Grumman Innovation Systems and United Launch Alliance. The three companies collectively received $2.3 billion to support the development of space launch vehicles that meet national security requirements. The Air Force started the LSA program in 2016 to ensure future access to space and to end its reliance on ULA’s Atlas 5 and its Russian main engine.

SpaceX was widely considered a front-runner for an award but came away empty-handed. The Air Force did not disclose why SpaceX did not receive LSA funds.

Now, as the individual who noticed and sent this story along speculated, what appears to be happening is that the procurement procedures have been altered to favor Blue Origin, i.e., Jeff Bexos and the Amazon interest, Northrup Grumman, i.e., the military interests (directly), and United Launch Alliance, a joint venture of Boeing and Lockheed Martian...er... Lockheed Martin. I also blogged recently about Musk being contacted by CERN to help bore its new tunnels for its Even Bigger Collider, which may, according to my anonymous speculator's lights, be Musk's way of trying to bore back "in" to the "inside."

And I have to admit, I find those speculations to be worth pondering. But I have my own "high octane speculation" corollaries to add to what may be happening. In a nutshell, what may be happening is the attempt to deliberately restructure the emerging space-based economy, and in typical mercantilist fashion, to shape and tailor that economy so that "approved players" remain more or less in control. And crucial to this process, though not mentioned in the article itself, are the recent FASB regulations, which effectively take the entire Federal budget "black". That's a pretty handy thing to have around when you're doing business with the Bexos/Amazon/CIA complex in a skewed procurement process. And that means, for the USA, more inefficiency in space, as large conglomerates can suck even more money from the tetes of an entirely black federal budget in the name of space, for ever smaller returns.

In short, what we're seeing here is that in spite of all the hype about the emerging space-based competitive market, the USSA, for its part, intends to see that the same players have "most favored procurement status." All others need not apply.

There's something else that will result from this, and that is, Europe will respond with its own version, cementing the role of the large French and German defense industries in their space program, leaving independent contractors like Mr. Musk out in the cold once again, unless he plays his cards well there.

But don't lose heart, Mr. Musk, there are lots of other players out there: India, China, Japan, Russia, Brazil, Israel, Luxembourg...

See you on the flip side...

9 thoughts on “IS MUSK’S SPACEX BEING PUSHED ASIDE?”

  1. “most favored procurement status.” = can keep secrets.
    I don’t know a lot about Musk but I think he is still working for the man. (ditto Assange).
    British East Universe Company launches 2021. All rockets to be painted red.

  2. Two good articles to read for background:

    “Military to audit decision to certify the Falcon Heavy rocket: plan to begin the subject evaluation in February 2019”
    https://arstechnica.com/science/2019/02/military-to-investigate-decision-to-certify-the-falcon-heavy-rocket/
    “The military chooses which rockets it wants built for the next decade: United Launch Alliance, Northrop Grumman, and Blue Origin won. SpaceX did not.”
    https://arstechnica.com/science/2018/10/air-force-makes-consequential-awards-to-rocket-developers/
    (both articles have many well-informed comments)

    What we have is the classic “incumbent vs challenger” face-off. In this case, Old Space vs New Space. There are various levels of skullduggery, depending on how far down the rabbit hole one wishes to venture…

    1. (If SpaceX had chosen to stay with the reusable Falcon 9 Block 5, they would have absolutely dominated the launcher market – except for governmental mandated launches – for the next decade or so. No doubt whatsoever. Musk’s choice of developing the BFR/SuperHeavy has put the company in cashflow hell. If BFR succeeds, SpaceX is even further ahead. If cashflow problems catch up with SpaceX, watch for some “benefactor” to step-up from out of nowhere and buy-up control of the successful Falcon 9…)

  3. Is it possible that when the government saw Musk Mars spaceship design. They had one thought Musk had watched too many Space Ghost episodes. Or he was too cheap on the payoffs department.

    1. Even though I’m no fan of Musk, it could be that he’s unmanageable. To add to all of @Scott ‘s points, perhaps this guy is a flight risk, who’s judgment can’t be trusted. I should imagine once one steps out of Low Earth Orit, the “Players Club” is still a small good old boy group with limited seats at the table.

  4. It is critical to realize that SpaceX has only done the simplest low earth orbit missions. SpaceX as a company is in dire straights financially. They laid off 10% of their workforce while investing in and touting the ‘Mars spaceship’ which is obviously ridiculous.

    SpaceX has had three fundraising attempts recently and all have failed.

    Musk personally mortgaged five of his homes (about $60M) in December to make up for his ‘borrowing’ from SpaceX to fund the Boring Co. without telling the board or shareholders.

    Elon Musk, the SpaceX CEO and holder of a security clearance, smoked pot on live TV and has openly and deeply insulted the SEC after committing blatant securities fraud. Musk is also under enormous pressure from a wide variety of serious lawsuits resulting from his fraud and bullying.

    Can anyone really disagree with the idea the Elon Musk’s companies should be removed from consideration for any kind of government contract?

    1. Agree. Musk has been a fud since the beginning. I remember when he got into hot water claiming to be the “founder” of Tesla, this was a blatant lie and after lawyers got involved, he changed his title/narrative to: “Co-Founder”…. which IMO is also a stretch.

  5. Robert Barricklow

    Here I’m reminded of Eisenhower’s warning of the military industrial congressional complex. Feinstein[related to Frankenstein in spirit] is the congressional side of that complex economic commission formula.[Ironic humor – the U.S. military procurement depart was named in honor of Eisenhower].
    It is paramount to make sure the private sector remains in charge of ownership I n space; while tax payers get charged.
    Meanwhile, back at an undisclosed ranch there are no rockets red glare; only advanced anti-gravity and other technologies being advanced and engineered for the final corporate profit frontiers.
    Alas, it’s just too hard for one mafia to get control of the the whole space pie frontier.

  6. Space is a possible means to an end, in the plan to reset the planet. Alternative is to dig underground.

    Those doing the planning, do not want to be around, when it happens. They seek an escape option.

    Technological development, that is compartmentalized, ensures unwitting participation in own doom. Knowledge is power!

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