Within the next 10 days, the US Air Force may issue an opportunity for rocket companies to bid on contracts for about 25 launches between 2022 and 2026. Although a “request for proposals” may not sound all that provocative, this particular government solicitation is filled with intrigue—and will have major implications for all of the big US rocket companies.

At present, United Launch Alliance (ULA) and SpaceX launch rockets for the Air Force, lofting powerful spy cameras, communication satellites and other sensitive payloads into various orbits for the government. In recent years, the military has sought to modernize its contractor base for the coming decade, encouraging new launch competitors and new ideas. This forthcoming solicitation for launch contracts in the mid-2020s, however, may effectively end that effort.

It was only five months ago, in October, that the Air Force announced $2.25 billion in “Launch Services Agreements” to be split among ULA (Vulcan rocket), Northrop Grumman (Omega), and Blue Origin (New Glenn). The funds were provided so that each of those companies could develop large, modern rockets and build the launch facilities needed to support military payloads. Over the first year of those awards, each company will receive the first $181 million of their individual awards. (SpaceX, somewhat controversially, did not receive an award. This is partly because the Air Force believes the company's Falcon 9 and Falcon Heavy rockets can meet its needs.)

For reasons not entirely clear, these development awards came about a year later than originally expected. That matters, because just two months later, in December, the Air Force issued a draft of its request for proposals to provide launches between 2022 and 2026. This document, which was updated in February, specifies the information the government wants from each company, including the capability of its rockets and other data needed to determine whether each launch vehicle can meet the Air Force’s needs. A final request for proposals may be issued on March 29, with the Air Force making a final decision later this year.

Down to two

Notably, as part of this competition, the Air Force will choose only two companies to meet its launch needs from 2022 to 2026, with one provider winning 60 percent of the contracts and the other taking 40 percent. There is no provision to on-ramp other companies during the time frame.

This sets up a rather frantic competition between the incumbents, ULA and SpaceX, and newcomers Blue Origin (with its New Glenn booster) and Northrop Grumman (with its Omega rocket). Moreover, the timing appears to prejudice the competition in favor of the incumbents, which already have existing launch systems the government can assess.

ULA has a long, successful record of flying national security missions for the Air Force. Although it is developing the Vulcan rocket, in 2022 it will have fallback options for the Air Force. So if Vulcan isn't ready, it could still meet the Air Force needs on its Atlas V rocket and Delta IV Heavy booster, both of which should still be flying (the solicitation language expressly allows this). SpaceX also has a proven track record with its Falcon 9 rocket, and the Falcon Heavy should have at least half a dozen missions under its belt by 2022.

By comparison, Blue Origin and Northrop Grumman are still developing components of their new rockets. They may or may not have flown test flights three years from now. The Air Force, therefore, will be making decisions this year between two companies with an established launch heritage and two prospective companies with incomplete hardware. “Everything the Air Force has done so far favors the incumbents,” an industry source familiar with this process told Ars.

There's another wrinkle in this decision as well. As noted earlier, ULA, Blue Origin, and Northrop Grumman have received part of their Launch Service Agreement awards. However, for companies that don't make the cut for launch contracts between 2022 and 2026, the remainder of the development funding will be halted.

The Air Force says that all companies will be eligible to bid for the next phase of launch contracts after 2026. Yet to finalize development of their rockets, companies will either have to self-fund or likely drop out of future competitions. “From that standpoint, this really isn’t a five-year decision,” the source said. “It’s more like a 10- or a 15-year decision.”

Pushback

In recent days, some of the non-incumbent rocket companies have begun to push back on these terms. A former congresswoman who now advises Blue Origin, Barbara Comstock, authored an op-ed published in Defense One that raised some of these issues.

The Air Force decision to pick just two companies for launches from 2022 to 2026 would extend the "current market duopoly" for national security space launches and eliminate incentives for ULA and SpaceX to compete on price, she argued. "This would sap military space efforts of competition that would lower prices, galvanize technological advances, and help maintain American dominance in space," Comstock wrote.

In its Wednesday space newsletter, Politico noted this op-ed and quoted an unnamed source on Blue Origin's tactics. "No one is surprised they're doing this," the source said. "The New Glenn is so far behind, they know they don't stand a chance in phase two so they're trying to change the rules." New Glenn is presently scheduled for its first launch in 2021.

So what will happen next? Air Force leadership is expected to meet on March 28, at which point they could issue the request for proposals the next day. There is also discussion of a 12-month delay, which would compete 2022 launches among ULA and SpaceX but then open the period from 2023 to 2026 to other competitors. This would allow Blue Origin and Northrop Grumman more time to develop their rockets and prove some of their capabilities to the Air Force.

Air Force officials may also decide to continue the Launch Service Agreements beyond this year for companies that don't win contracts from 2022 to 2026, something that the president's budget request for fiscal year 2020 provides funding for.