On May 15, SpaceX launched its heaviest payload ever to geosynchronous transfer orbit, a vantage point far above the Earth. Because the Inmarsat satellite weighed more than six tons, it was originally scheduled to launch on SpaceX's Falcon Heavy rocket. Back when the launch contract was signed in 2014, neither SpaceX nor Inmarsat anticipated the regular Falcon 9 rocket would have the capability to lift so much, so high.

However, since the Falcon 9 began regular flights in 2012, SpaceX has acted more like a startup company than a traditional aerospace company, making two or three major upgrades to the booster and dozens of smaller modifications designed to improve its performance. By doing so, SpaceX has essentially doubled the rocket's lift capacity. Partly as a result of this, the US military now allows SpaceX to bid for national security payload launches.

SpaceX has paid for these upgrades by leveraging private investment alongside revenues from government and commercial launch contracts to improve its products. This innovative approach to the aerospace business, including the pursuit of reusability, has upended the global launch market, and it has sent competitors such as the US-based United Launch Alliance (ULA) scrambling to compete on price.

Government award

A day after SpaceX's Inmarsat launch last month, the US Department of Defense quietly awarded ULA an amount not to exceed $27.4 million to convert its launch vehicle from "heritage avionics to common avionics." According to the contract award, the work was to be completed by July 1, 2019 at the company's facilities in Decatur, Alabama. The avionics on board a rocket include communications, navigation, and management of multiple systems to control flight.

The government award to ULA reinforces the notion that, traditionally in aerospace, the government pays for rocket upgrades. But it is also curious because of its timing—for work to be completed two years from now. Based upon information in an article written by two ULA engineers and published in Advances in the Astronautical Sciences Guidance, Navigation and Control, the avionics system has already been upgraded. Moreover, the February 5, 2016 launch of a GPS satellite for the Air Force marked the first launch of the common avionics system.

"The launch of GPS IIF-12 in February 2016 represents the culmination of several years of development work to update avionics hardware and flight software as well as simulation and test environment tools," the research article states. "Common avionics addresses the challenge of parts obsolescence any program with the longevity of (this one) must face. ULA has taken advantage of this opportunity to design and produce a more affordable solution for vehicle control that will also expand the capability of our launcher fleet."

No comment

In response to questions about whether ULA is, in fact, being paid for work it has already done, a spokeswoman for the company, Jessica Rye, referred Ars to the US Air Force. Because the Air Force's Space and Missile Systems Center was undergoing a change in commander in mid-May, Ars waited 10 days for an Air Force spokeswoman, Alicia Garges, to provide an explanation. For now, we have decided to publish this story without a reply.

Regardless of the explanation, this unheralded contract award seems significant, if only for the reason that it illustrates how the "commercial space" industry is trying to compete with older, established aerospace firms (ULA is co-owned by Boeing and Lockheed Martin). Critics of SpaceX and other new space companies often say they are not really "commercial," nor particularly different from traditional aerospace firms, because the new companies often receive large contracts for government work such as launches.

However, the type of contract matters. Typically, new space companies will invest more of their own funds and provide a service such as launching a satellite for a "fixed price." As the new ULA award shows, the "cost-plus" method of contracting remains alive and well, even in cases where it might favor one company and disadvantage a competitor in government business.