The most reliable US rocket company, United Launch Alliance, could not compete with upstart provider SpaceX during a competition in late 2015 for an Air Force payload, a senior engineer with the company said Wednesday. SpaceX was able to offer launch capabilities for as little as one-third the price of what United Launch Alliance could, said Brett Tobey, vice president of engineering for the Colorado-based rocket company.

It does not appear Tobey knew his remarks at a University of Colorado-Boulder seminar were being recorded. But Space News obtained a copy of the audio and posted the revealing, nearly hour-long recording on its website. By Wednesday night Reuters reported that Tobey had resigned from his position at United Launch Alliance, effective immediately.

"The views, positions, and inaccurate statements Mr. Tobey presented at his recent speaking engagement were not aligned with the direction of the company, my views, nor the views I expect from ULA leaders," the company's chief executive, Tory Bruno, said in a statement. Tobey's comments are likely to undermine the efforts of Bruno, who has received kudos within the US spaceflight community for trying to make ULA more competitive and innovative.

The 10-year-old company has a sterling record of more than 100 launches with a perfect success rate. However, its workhorse rocket, the Atlas V, has faced criticism because it is powered by Russian RD-180 engines; some in Congress are no longer comfortable with the US military relying on Russian technology to get its sensitive national security payloads into space.

The company has also come under price pressure from SpaceX, which offers lower rates for its Falcon 9 rocket. Late last year, after the military had certified the Falcon 9 as reliable and safe enough for national security launches, the Air Force asked for bids to launch a GPS 3 satellite in 2018. When ULA did not bid on the contract, effectively ceding it to SpaceX, Bruno said his company was “unable to submit a compliant proposal” because of contract requirements and the limitations Congress had imposed on the RD-180 engine.

Cost shootout

However, during his remarks Wednesday, Tobey offered a sharply different view of that contract. "ULA opted to not bid that," he said. "The government was not happy with us not bidding that contract because they felt that they had bent over backwards to lean the fill to our advantage. But... we saw it as a cost shootout between us and SpaceX. So now we're going to have to figure out how to bid these things at a much lower cost. And the government can't just say ULA has a great track record, they've done 105 launches in a row with 100 percent mission success, and we can give it to them on a silver platter even though their costs are two or three times as high."

As far as those costs, Tobey said SpaceX was able to offer launch services as low as $60 million per flight, whereas the lowest ULA could offer was $125 million. However, he added, that did not include an $800 million "capability contract" that the military pays ULA annually to guarantee readiness and the ability to essentially launch on demand. If you factor in these funds, which SpaceX does not receive, the lowest cost launches that ULA can offer are about $200 million.

During his talk Tobey said he was recruited to address the issue of cost competitiveness within the ranks of about 1,500 engineers at ULA, which is a joint venture between two of America's largest aerospace contractors, Boeing and Lockheed Martin. "What I was hired to do last summer is to lead this transformation of ULA's work force from where it was into the future," he said. He predicted there would be a lot of "chaos" going forward as ULA adjusts to these changes necessitated by lower-cost bidding. That may be an understatement after the public release of his remarks.

Congressional brouhaha

Tobey also addressed the simmering debate in Congress over whether ULA should be allowed to continue to use the RD-180 engine. The battle has played out in the Senate between Sen. John McCain (R-Ariz.), who is chairman of the Senate Committee on Armed Services, and Richard Shelby (R-Ala.), who is chairman of the Senate Appropriations subcommittee with jurisdiction over NASA's budget. McCain is an ally of SpaceX, and he says for the sake of national defense the country cannot rely on Russian-made engines. Shelby is from Alabama, where ULA has a large rocket manufacturing facility.

In December, after McCain had instituted a ban on the use of RD-180 engines after 2019, Shelby effectively lifted that restriction in the final writing of the omnibus budget bill. McCain was, and remains, irate over this maneuver. Tobey said this was done at the behest of SpaceX founder Elon Musk.

"There's a couple people, this guy in particular, John McCain, who basically doesn't like us," Tobey said of ULA. "He's like this with Elon Musk. So Elon Musk says why don't you go after United Launch Alliance to see if you can get that engine outlawed." At this point Tobey said a friend of ULA, Shelby, intervened. "He basically at the last minute, in December of last year, when they were doing the omnibus bill to keep the government running, he parachuted in in the middle of the night and added some language into the authorization bill to ignore McCain's language and allow United Launch Alliance to use any engine."

It is not clear what ramifications Tobey's comments might have both in Congress and at the headquarters of SpaceX, which has long maintained it can offer similar services to ULA at a far lower cost.

Back in April, 2014, when SpaceX was trying to break into the national security payload launch market, Musk accused the US government of entering into improper and uncompetitive launch agreements with private contractors and said SpaceX’s rockets could do the same job for much less. “We’re just protesting and saying these launches should be competed," said Musk at a press conference. "And if we compete and lose, that’s fine, but why were they not even competed?" That suit was resolved last year after the Air Force certified the Falcon 9 rocket.