How $316 million is used for a single launch, SpaceX explains

Many people were shocked by the huge price tag; the U.S Air force is paying SpaceX. SpaceX was given $316 million to facilitate the launching of a National Reconnaissance Office satellite. On November 9, Shotwell Gwynne, SpaceX president and Chief Operating Officer said that the contract cover includes the launch services, infrastructure, items needed, and other expenses that might occur during launch. She added that the launch was not so expensive. SpaceX was awarded a $316 million contract for a single mission compared to a $337 million contract awarded to United Launch Alliance to launch two missions. This has raised many questions since the previous bids for SpaceX’s national security launch were lower than ULA’s. Another recent contract won by SpaceX from NASA known as Falcon Heavy launch was awarded $117 million. 

However, Shotwell stood on her ground and said that the company’s launch prices are not hiking. What SpaceX is charging the government is the extended payload fairing costs, upgrading the West Coast Launchpad, and an integration facility for NRO missions. Shotwell added that most of the money was meant for infrastructure, saying that the 7th August contract does not include all the infrastructure expenses, and the remaining costs will be added in Phase 2 bids. 

Bruno Tory, the ULA CEO, said that Phase 2 awards would be price competitive. He indicated that the Phase 2 launch prices will be fixed and will not comprise the development costs. Bruno said this in the WSBW panel. However, Shotwell said that in its bids, SpaceX included development costs. This is because the company did not receive development and infrastructure funds that other competitors got. In 2018, the Air Force gave billions of dollars to ULA and other launch companies they were competing with for Phase 2 contracts. The money was used for the infrastructure and development of vehicles. SpaceX never won the Launch Service Agreement (LSA) development contract, which led them to sue the Air Force. Last month, a judge from California dismissed the lawsuit.

Shotwell added that the development costs must be included to get a complete and precise look at the Space Force investment. LSA awarded ULA a $967 million contract. The LSA awards were aimed to help have a competitive Phase 2 for the U.S launch providers. Gwynne Shotwell said that the contract does meet the cost for the launch services and at the same time covers the expenses for the infrastructure and other items needed for the national security launches.