Can private-sector space business be profitable, or is it just an exciting way for billionaires to live out their fantasies?

Update, 7/15: It took four days, but the Air Force now agrees that SpaceX has completed the three flights needed to officially demonstrate it can compete for national security contracts; further technical reviews and audits will continue before full certification is granted.

“I applaud SpaceX on achieving the three flights,” Lieutenant General Sam Greaves said in a statement. “With this significant part of the agreed-to path in certifying the Falcon 9 v1.1 launch system complete, we look forward to working with SpaceX to complete the remaining certification activities and providing SpaceX with the opportunity to compete for EELV missions.”

Original story:

SpaceX successfully put six communication satellites for Orbcomm, a leading space communications company, into orbit on July 14. The tenth successful launch of SpaceX’s Falcon 9 rocket is more evidence that the company is ready to compete with proven firms to gain lucrative government contracts, but its battle with US military buyers has them unwilling to admit that the company is capable of putting complex electronics in space.

SpaceX wants to compete for nearly $70 billion in Air Force launches expected through 2030, but in December the Air Force surprised observers by awarding a sole-source, 36-launch contract worth $11 billion to United Launch Alliance. SpaceX sued the Air Force for awarding the contract to ULA, a joint venture of Lockheed Martin and Boeing, without competition, saying the decision to award so many contracts so far in advance violated the government’s promise to introduce cost-saving competition into the process. The government says the case should be dismissed because SpaceX knew about the long-term contract in advance and failed to protest in a timely way.

SpaceX is still working through the process that will certify it to compete with ULA (currently the only certified company) with its much-cheaper launch system. The process, which will cost $60 million and requires 100 Air Force personnel and contractors, is expected to be finished by this year. SpaceX has already completed three trial launches (the final one coming just days after ULA was awarded the contract), and on July 11, the company told reporters that the Air Force had certified those launches, another step in the overall process.

But not according to the Air Force, which has so far refused to repeated requests to comment on the launch certification, citing the pending litigation.

The military has not been pleased with SpaceX’s suit or CEO Elon Musk’s harsh public statements, which has also attracted the oversight attention of US senator John McCain. “Generally, the person you’re going to do business with you don’t sue,” is the frequently-cited quote from William Shelton, the general in charge of the Air Force’s Space Command. However, with a lawsuit filed by a ULA subsidiary seeking $400 million in additional payments from the Air Force still pending, it may be more common than Shelton thinks.

SpaceX has tried to keep the certification process separate from its suit against the Air Force’s block-buy contract, saying publicly that it is still working closely with the military to prepare its rockets for competition, even as it lambasts ULA’s deal in the courts. The Air Force’s reluctance to publicly acknowledge SpaceX’s progress suggests that it doesn’t see the same separation between the two issues, which might not augur well for the fledgling space firm’s efforts to win the $3 billion worth of national security business it hopes to garner.