The US Air Force could turn the tables on one of SpaceX's biggest competitors and give Elon Musk a monopoly on a very lucrative market
At a Senate Armed Services Committee hearing on Wednesday, Air Force Secretary Deborah Lee James said that Air Force staff were currently investigating the repercussions of prematurely ending its contract with the launch services provider United Launch Alliance.
Under the contract - called the EELV (Evolved Expendable Launch Vehicle) Launch Capability (ELC) contract - the US Air Force agrees to pay ULA $800 million per year from 2006 to 2019 to ferry national security satellites to space.
There's just one problem: SpaceX, the private spaceflight company owned and founded by billionaire entrepreneur Elon Musk.
In 2006, when the Air Force first awarded the contract to ULA, no one could have foreseen how fast and furious Musk's private spaceflight company would rise to success.
And after SpaceX had demonstrated itself as a reliable launch services provider by the start of 2014, Musk decided that he wanted in on some of ULA's action.
However, the US Air Force had not certified SpaceX rockets for national security launches, giving ULA a monopoly on the market to ferry sensitive and costly military satellites into orbit.
Now, the tables could turn in favor of SpaceX because of a potentially fatal decision that ULA made last year.
In May 2015, the US Air Force upped the competition for ULA by certifying SpaceX for those coveted national security launches. Right now, ULA and SpaceX are the only two spaceflight companies certified to perform these missions.
When the time finally came last November for the two companies to compete for the first time to launch a US Air Force GPS navigation satellite, ULA pulled out and didn't submit a proposal.
That move raised a lot of eyebrows from the US Air Force, who was paying ULA nearly $1 million a year in tax payer's dollars to perform such launches. And now, it could cost ULA its contract.
"I was very surprised and disappointed when ULA did not bid on a recent GPS competitive launch opportunity," James told Defense News. "And given the fact that there are taxpayer dollars involved with this ELC arrangement ... I've asked my legal team to review what could be done about this."
If the US Air Force decides to cancel its contract with ULA, then ULA will have a very hard time surviving as a company, let alone competing with SpaceX for upcoming national security launches.
And it could give SpaceX, which is already scheduled to launch more than half of the world's commercial satellite missions this year, a sizeable monopoly on the US military spaceflight market.