Firms are scrambling for lucrative civilian and military contracts in the post-space shuttle era. Space new frontier for tech lobbying

President Barack Obama’s élan for Elon Musk, the serial entrepreneur bent on launching private rockets into space cheaply, includes multiple personal visits, high praise and apparent reciprocation: Musk this year attended a $35,800-a-head Obama fundraiser and has filled other Democratic coffers with cash.

But in the new post-space shuttle space race, it takes more than glad-handing with the president to get the lucrative civilian and military contracts involving both human and cargo transport.


Musk, who founded PayPal and Tesla Motors, is no pauper. His outfit, Space Exploration Technologies — SpaceX — and other relative newcomers such as Blue Origin, Sierra Nevada Corp. and Orbital Sciences Corp., are all fighting to wrestle a greater share of riches from Boeing and Lockheed Martin, which are to space launches as the USS Enterprise is to “Star Trek” and still lord over all other firms when it comes to government contracts.

To a point, they’ve made a successful case. SpaceX, based in Hawthorne, Calif., and Orbital Sciences, based in Dulles, Va., are under NASA contract, worth up to $3.5 billion, to lift 40 tons of cargo to the International Space Station over 20 flights.

Even so, Musk says the young crowd is having trouble also convincing the Pentagon they can provide high-quality launch vehicles at lower costs than the industry’s standard-bearers, and he's pointing the finger at the Obama administration.

“People think Obama is my best friend. If he has been my best friend, he sure hasn’t been very good at helping me out,” Musk said in an interview. “Obama has been doing a good job within the scope of what he can do … but not pushing further. And Congress has done quite a bad job."

SpaceX's Falcon rockets are under consideration for use to transport people, as are the Atlas V rockets from Boeing and Lockheed Martin’s United Launch Alliance. And SpaceX's Falcon Heavy rocket will compete for parts of the lucrative communications and spy satellite launch business, which can earn contractors into the billions of dollars.

Since 2003, SpaceX’s lobbying expenditures have steadily increased each year, nearly reaching the $600,000 mark in 2010, federal records show. Through June 30, the company has this year spent $320,000 lobbying federal entities from the Senate and Office of Management and Budget to NASA and the Air Force, putting it on pace to again exceed the previous year’s total.

Musk has personally made more than $200,000 in campaign contributions to federal candidates and committees since the 2008 election cycle, Federal Election Commission records indicate.

During the 2010 election cycle, the SpaceX PAC donated $67,900 to federal candidates, with nearly $4 going to Democrats for every $1 going to Republicans. In contrast, Boeing’s PAC made more than $2.2 million in candidate contributions during the 2010 cycle.

But Musk says that's not enough.

“We don’t have nearly the political base as other companies do — at this time,” he said. “They talk about ‘super PACs.’ We’re a micro PAC. We may be one percent of their political power. So hopefully, we’ll start with bringing it up to 2 percent. We have more will. And we will reach out to the public directly.”

Boeing and Lockheed Martin are aggressively defending their long-standing business, with Boeing having spent at least $7 million every year since 2000 on federal lobbying efforts and Lockheed Martin spending at least $6 million. Their joint venture, United Launch Alliance, has spent an additional $120,000 annually since 2008. Both companies employ multiple former members of Congress on their federal lobbying rosters, which include dozens of lobbyists.

Compare that to Orbital Sciences’ annual lobbying expenditures, which have fluctuated over the years from less than $100,000 as recently as 2007 to a high of nearly $400,000 in 2008.

“The ULA is really concerned about us as a competitor,” Musk said. “If our rockets are good enough for NASA to go to a $100 billion space station, why isn’t it good enough for the Air Force?”

Boeing says it's a matter of quality. If Boeing’s products didn’t have an excellent record of quality and performance, NASA and the Air Force might go elsewhere, and that hasn’t been the case, said Pat Schondel, the company's vice president of NASA programs.

“We’ve built every vehicle that humans have ever flown on in the U.S. We have incredible experience here, ” Schondel added. “Bring it on, in terms of the competition. We feel pretty confident about our competitive edge.”

Mark Lewis, the Air Force’s chief scientist from 2004 to 2008, said the military is less inclined than NASA to tap new companies for sensitive missions because reliability is a chief concern. A marginal amount of savings from the rocket itself is instantly wiped out, he notes, if the satellite it's carrying ends up in the ocean instead of in orbit — like the two climate science satellites that failed to reach orbit on Orbital Sciences Taurus XL rockets in 2009 and again this March.

“It’s very easy to make a PowerPoint presentation of pretty rockets. It’s much harder to build the darn things and make them work reliably,” said Lewis, now the aerospace engineering department chairman at the University of Maryland.

Musk claims the Air Force has unfairly kept smaller firms such as his at bay, paying more money for launch products no better than those of his company.

“Our focus now is that the Air Force doesn’t shut us out. We can provide a savings. But we need a level playing field,” said Musk, adding that SpaceX is likely to accelerate its political influence efforts, both in terms of lobbying and campaign contributions through is nascent political action committee.

The White House directed questions about space launch contractors to NASA, where spokesman Bob Jacobs said of private space launch companies, “We want to have a balanced portfolio with our contractor base. We’re very excited about the possibilities with these companies.”

The Pentagon directed questions about SpaceX to the Air Force, which did not reply to inquiries.

Lewis said that companies such as SpaceX are making rapid progress and, upon demonstrated successes, won’t be ignored for long.

“We’re almost in what you could call the perfect storm in priorities as it pertains to space. We’ve been left with a tremendous void, and we don’t even know what the next big thing is going to be,” Lewis said. “To a large measure, that’s a good thing. We’ll see competition, and we’ll see a level of passion in these companies that we haven’t seen in a while.”

This article first appeared on POLITICO Pro at 3:52 p.m. on July 29, 2011.

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