For the last decade, a joint Boeing-Lockheed Martin venture called the United Launch Alliance has been the only company allowed to bid on launching military satellites into space. Elon Musk’s SpaceX spoiled that party last year when it won its first US Air Force contract, but the ULA didn’t bid on that contract.
Now, for the first time, SpaceX has gone head-to-head with the establishment, and it won. SpaceX has received a $96.5 million contract to launch a new GPS satellite into orbit, which beat out a rival bid from the ULA, thanks to SpaceX’s much lower pricetag.
As your high-school economics teacher probably told you, monopolies are bad for anyone who likes to save money. The ULA has had a total monopoly on sensitive military launch contracts for the last decade, as launching military satellites requires a higher level of certification than commercial space launches. Without any competition, no one could really say if ULA’s contracts were overly expensive or not.
Now that SpaceX is in the picture, prices do seem to be falling dramatically. For the same launch, SpaceX charges about $60 million, while the ULA charges $109 million, nearly double. The ULA argues that contract prices should account for reliability, a dig at SpaceX’s recent problem with explosions — but even then, the SpaceX’s rockets don’t explode half the time.
