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Published: Thursday, May 1, 2014, 7:27 p.m.

SpaceX blocks Boeing rocket purchases

WASHINGTON — Billionaire Elon Musk's Space Exploration Technologies won a court order temporarily blocking a Boeing-Lockheed Martin venture from buying Russian-made rocket engines for the U.S. Air Force because they potentially violate federal sanctions.
U.S. Court of Federal Claims Judge Susan Braden in Washington halted the engine sales until she receives the opinion of the U.S. departments of Treasury, Commerce and State "that any such purchases or payments will not directly or indirectly contravene" President Barack Obama's March 16 order imposing sanctions against Russian Deputy Prime Minister Dmitry Rogozin, who heads the country's defense and space industries.
Competition for military satellite launches, which have an estimated value of $70 billion through 2030 and are the fourth- largest program in the defense budget, could save taxpayers more than $1 billion a year, according to Musk. SpaceX sued April 28 accusing the Air Force of illegally shutting it out of the business by giving a monopoly to the Boeing-Lockheed venture, known as United Launch Alliance LLC.
An Air Force representative didn't immediately respond to an e-mail to its media center before regular business hours today seeking comment on the decision.
"ULA is deeply concerned with this ruling and we will work closely with the Department of Justice to resolve the injunction expeditiously," Kevin MacGary, ULA general counsel, said in a statement today.
SpaceX's objection to Russian involvement "ignores the potential implications to our national security and our nation's ability to put Americans on board the International Space Station," MacGary said.
The National Aeronautics and Space Administration uses Russian Soyuz rockets to get astronauts to the space station after having ended its shuttle program in 2011.
That dependence was not lost on Rogozin, who responded to an expansion of U.S. sanctions on April 29 with this tweet:
"I suggest the U.S. delivers its astronauts to the ISS with a trampoline"
It's not clear what, if any, impact Braden's ruling will have on ULA operations. The alliance will continue "assuring the safe delivery of the missions we are honored to support," MacGary said.
ULA has a two-year inventory of the Russian engines in the U.S., according to Jessica Rye, a spokeswoman for alliance.
The engines are made by the Russian government-owned NPO Ergomash.
ULA unit United Launch Services, which holds the contracts being challenged, characterized SpaceX as a passive bystander since 2012 as the Air Force announced its need for launch service, decided on ULA as the sole provider and worked out contract details.
"While SpaceX sat on its hands, ULS incurred extraordinary bid and proposal costs, accepted substantial risk in ordering long-term lead items" and has been performing on contract for 10 months, according to a court filing. ULS yesterday asked for and received permission from Braden to participate in the lawsuit.
Braden's temporary order doesn't cover purchase orders placed or money paid prior to yesterday.
Musk, who is also chairman and chief executive officer of carmaker Tesla Motors Inc. and has an estimated net worth of $9.8 billion according to the Bloomberg Billionaires Index., told U.S. lawmakers in March that the use of the Russian engines in ULA's Atlas V rockets poses supply risks after that country's invasion of Crimea. The U.S. has ratcheted up its sanctions against Russia in retaliation for the annexation.
In addition, reliance on ULA "defers meaningful competition for years to come," according to SpaceX's complaint. Closely held SpaceX, based in Hawthorne, California, already provides launch services for some U.S. agencies, including NASA.
The Air Force contract being challenged provides services for launching national security space satellites into orbit through 2017, according to court filings.
SpaceX asked Braden to order cancellation of ULA launches slated more than two years into the future.
The company said it "seeks no advantage, but merely the opportunity to compete," and asked the judge in the complaint to order the Air Force "to conduct full and open competition" for launch projects.

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