Pentagon awards United Launch Alliance, SpaceX launch contracts

By Joey Roulette

WASHINGTON (Reuters) - The U.S. Air Force said on Friday it awarded United Launch Alliance (ULA) and Elon Musk's SpaceX $653 million in combined military launch contracts under the Pentagon's next-generation, multibillion-dollar launch capability program.

The contracts are for launch service orders beginning in 2022 and allocate $337 million to ULA, a joint venture between Boeing Co and Lockheed Martin Corp, and $316 million to SpaceX for the first missions of roughly 34 total that the two rocket firms will support through 2027.

ULA will receive a contract for approximately 60% of those launch service orders using its next-generation Vulcan rocket while Musk's SpaceX, using its Falcon 9 and Falcon Heavy rockets, will receive approximately 40%, the Air Force's acquisition chief Will Roper told reporters on Friday.

The awards are part of the Pentagon's 2014 mandate from Congress to curb its dependency on rockets using Russia’s RD-180 engine and transition to U.S.-made rockets for launching Washington's most sensitive national security payloads to space.

The program, called National Security Space Launch Phase 2, is aimed at "building a competitive industry base that we hope doesn't just help military and national security missions, but that helps our nation continue to compete and dominate in space," Roper added.

"Today’s awards mark a new epoch of space launch that will finally transition the Department off Russian RD-180 engines," Roper said in a statement.

The two companies lay claim to billions of dollars in lucrative military contracts for a span of five years that competitors Blue Origin, the space company of Amazon.com Inc owner Jeff Bezos, and Northrop Grumman also competed for.

Blue Origin Chief Executive Bob Smith said in a statement he was "disappointed" in the Pentagon's decision, adding that the company will continue to develop its heavy-lift New Glenn rocket "to fulfill our current commercial contracts, pursue a large and growing commercial market, and enter into new civil space launch contracts."

(Reporting by Joey Roulette; writing by David Shepardson; Editing by Sandra Maler, Grant McCool and Sonya Hepinstall)