Elon and SpaceX, thx for embodying true competition
Elon Musk’s SpaceX had to sue before it got access to the Pentagon — but now, as it promises to deliver cargo into space at less than half the cost of the military’s favored contractor, it has pulled back the curtain on tens of billions in potentially unnecessary military spending.
America’s Military Complex and politicians greasing the wheels of monopolies.
The entrenched contractor, a joint operation of Boeing and Lockheed Martin called the United Launch Alliance, has conducted 106 space launches all but flawlessly, but the cost for each is more than $350 million, according to the Government Accountability Office. SpaceX promises launches for less than $100 million.
Yet despite the potentially more cost-effective alternative, taxpayers will be paying the price for ULA’s contracts for years to come, POLITICO has found. Estimates show that, through 2030, the cost of the Pentagon’s launch program will hit $70 billion — one of the most expensive programs within the Defense Department. And even if ULA is never awarded another government contract, it will continue to collect billions of dollars — including an $800 million annual retainer — as it completes launches that were awarded before Musk’s company was allowed to compete. That includes a block buy of 36 launches awarded in 2013.
Meanwhile, ULA is under investigation by the Pentagon for possible corrupt bidding practices and is preparing to lay off 25 percent of its workforce. Its long-term viability is in doubt.
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“As evidence that we were paying too much to ULA,” he said, “as soon as there was even the threat of competition, their costs came down quite a bit. And they were obviously motivated at that point in time. Motivation matters. Financial incentives matter.”
Thx McCain
Sen. John McCain, a vocal critic of ULA, had a tense exchange with Kendall about the matter at a hearing in January.
“Do you know of any other federal arrangement with any other defense corporation where you pay them $800 million a year simply to remain in business?” McCain asked.
Source: news.ycombinator.com