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SpaceX Moves Closer to Launching Spy Satellites

by Brendan McGarry on February 27, 2014

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Space Exploration Technologies Corp., the start-up rocket-maker headed by billionaire Elon Musk, moved a step closer to launching military and spy satellites this week.

The U.S. Air Force said the Hawthorne, Calif.-based company known as SpaceX has completed the first of three missions needed to qualify for carrying military and intelligence satellites, which are generally bigger and more expensive than their commercial counterparts.

While the Sept. 29 liftoff of the upgraded Falcon 9 rocket from Vandenberg Air Force Base, Calif., launched civilian satellites Cassiope, CUSat, Dande and Popacs into orbit, the mission nevertheless counted toward military certification, the service said in a news release.

“This flight represents one of many certification requirements jointly agreed to between the Air Force and SpaceX,” Lt. Gen. Ellen Pawlikowski, the head of Space and Missile Systems Center at Air Force Space Command, said in the statement.

Under a June 2013 Cooperative Research and Development Agreement (CRADA) between SpaceX and the Air Force, the company must perform at least three successful flights of a common launch vehicle configuration to be considered for launching critical and high-cost National Security Space (NSS) payloads, according to the release.

SpaceX has since completed on Dec. 3 and Jan. 6 two more launches of that version of the rocket, known as version 1.1, but the command is still determining whether they will meet the certification requirements. The two-stage, medium-lift rocket was designed in part to someday carry astronauts, in addition to spacecraft and cargo.

In addition to commercial business, the company has a $1.6 billion contract with NASA for at least a dozen cargo resupply flights to the International Space Station. It also plans to compete in the military market against United Launch Alliance LLC.

The latter is a joint venture of Lockheed Martin Corp. and Boeing Co., the government’s sole provider of medium– and heavy-lift rocket launches as part of a program called Evolved Expendable Launch Vehicle, or EELV.

The Air Force alone last year budgeted some $1.9 billion for five EELV launches, or $376 million per mission. While government officials say a strategy to buy the launches in bulk has resulted in savings, they also want to open the program to competition from such companies as SpaceX and Orbital Sciences Corp. to curb costs.

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{ 56 comments… read them below or add one }

Stan February 27, 2014 at 10:50 am

Good for them and for us. What a spectacular smart capitalism success story.

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Dale Christopher February 27, 2014 at 11:41 am

Do you mean smart capital success story?

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Stan February 28, 2014 at 7:14 pm

I am not sure what the difference is. What I mean is that he looked at the ULA business model and realized he could do much better (much MUCH better). He implemented something like the production line for the entire vehicle within a single space (including engines, I believe). He is moving toward making the rockets reusable. Boeing and LM could have done this at any point over the past 40 years and they were perfectly content to just do the same old thing. Now SpaceX is on the verge of running off with their lunch money (and China's, and Russia's, in time). Smart capitalism or capital, this is el primo mythic American-style entrepreneurship.

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Anonymous February 27, 2014 at 12:48 pm

To be fair – SpaceX was started by a rich person. Capitalism is a whole lot easier if you already have money.

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Rufus Frazier February 27, 2014 at 3:54 pm

Musk wasn't rich until he sold his startup company and with that money started Paypal. His comment on his move into rockets was that it was a great way to make a small fortune – out of a large one. The government got involved and began subsidizing his efforts and that's where the capitalism ends and the politics begins.

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Stan February 28, 2014 at 7:03 pm

He had about a billion dollars from PayPal sale and a few hundred millions from another project. That is a mind-numbing amount of dough to me, chump change in aerospace.

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blight_ March 2, 2014 at 11:53 am

Indeed his whole fortune wouldn't even get JSF past a series of cost overruns.

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whocares February 27, 2014 at 1:16 pm

Well SpaceX got its start with Air Force money with the Falcon 1. Without that funding no SpaceX today. Elon also dipped his beak in Dept of Energy loans to the tune of over $450 million to keep Tesla afloat during the early stages of the great 2008 recession. No loan, no Tesla today.
What SpaceX and Tesla are are unusual success stories for government backed companies. Both companies seem to be providing excellent products for a hungry market.

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blight_ February 27, 2014 at 7:45 pm

Shh…Solyndra! /sarcasm

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Dfens February 28, 2014 at 11:44 am

At no point did SpaceX get a full military style contract to build that rocket. A military contract would have guaranteed SpaceX $1.10 for every dollar they spent in development and production costs. That's the kind of contract NASA and the DoD routinely use to get their rockets built. SpaceX, on the other hand, funded most of their development on their own dime, and did get some government money to help out, but it was purely a fixed amount, and certainly it did not cover the majority of their expenses. It was nothing like the blank check Lockheed and Boeing got to design and build the F-22, nor was it like the unlimited guaranteed funding that's going to develop the F-35. These people call themselves capitalists, but have no idea how capitalism works, nor how it can fail. And I'd call a contract guaranteeing a for-profit company $1.10 of my money they for every $1.00 they spend a definite FAIL.

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Stan February 28, 2014 at 7:06 pm

What he ^ said. Musk arguably relied on AF seed money as well as NASA research and facilities but this Falcon was arguably a private project as opposed to a government program like the ELVs.

Chuang Shyue Chou February 27, 2014 at 9:50 pm

Exciting times! Commercialisation of space may see an opening up, lower costs and more.

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blight_ February 27, 2014 at 11:07 am

Hope Elon gives LM/Boeing a run for their money.

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Ben February 27, 2014 at 11:40 am

If any one man on the planet can bring them down, it's Elon Musk.

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ronaldo February 27, 2014 at 1:20 pm

Do you really mean that? And eliminate competition ?

Elon has made both Boeing and Lockheed better. Let them duke it out without prejudice from this site.

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Ben February 27, 2014 at 2:55 pm

I don't mean run them out of business, I mean knock them off their throne. Competition is the answer, but right now there really isn't any.

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ronaldo February 27, 2014 at 3:51 pm

Be careful when we talk "competition". Remember the EELV debacle ? Competition was supposed to lower costs, but any sane mind would see that when the market is so small ( a la DOD) that there is not room for many suppliers to be profitable. So the two competitors formed a single company.

Believe in capitalism do we ? Be careful. DOD programs must allow competition, preserve the competitive industrial base. keep Congress heppy…..get the picture ? I have great sympathy for those guys.

hibeam February 27, 2014 at 11:30 am

Are they using Muslim Mathematicians?

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Dale Christopher February 27, 2014 at 11:38 am

You mean Arabic numerals?

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blight_ February 27, 2014 at 7:46 pm

Who took them in turn from the Indians. It's always nice to be near many neighbors with good ideas and trade goods. It's what kept the caliphate going…until the Europeans bypassed them.

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yogiberra111 February 28, 2014 at 2:57 am

Exactly. The Arabs invented the concept of "zero", without which there could be no modern mathematics and no technological society. Hibeam is ignorant and apparently proud of it.

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hibeam February 28, 2014 at 8:40 am

I am only repeating Obama's ideas on this forum. Pretend Obama said it (again) and applaud wildly.

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Kurt Montandon February 28, 2014 at 12:29 pm

"I am only repeating Obama's ideas on this forum."

What are you talking about? I'm guessing … nothing reality based.

Stan February 28, 2014 at 10:40 pm

Nope, zero is also an Indian concept.

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hibeam February 27, 2014 at 7:42 pm

NASA has more beryllium flange inspectors than SpaceX has employees.

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Tinto February 28, 2014 at 4:06 am

My brother was an engineer at the Cape for on several programs, he said that the only thing important to NASA Project Managers and Dept Heads, was how much $ and how long. Hear tell, about half of the cost of a Shuttle Launch was buried in the General Budget. Most likely SpaceX can do the job much cheaper.

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Ben February 28, 2014 at 11:08 am

They already have, and much much cheaper.

A Falcon 9 launch costs around $55mil to put 29,000lbs into LEO. A Falcon Heavy is projected to cost about $100mil and carry 117,000lbs to LEO.

Now compare that to a Delta II rocket that costs $96mil to put a mere 13,000lbs into LEO. Or a Delta IV that costs somewhere between $375-435mil to put 50,000lbs into LEO.

In the end it comes down to Space X dropped costs to somewhere around 1/10 the previous NASA costs, and they're just getting started.

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zivbnd February 28, 2014 at 7:05 pm

And if they ever get to the point where they are re-using the first stages there costs will drop even more. Grasshopper just keeps going higher and coming back down in one piece and I believe the next Falcon 9 flight will actually carry landing legs to test the weight and stability, though they won't actually be used, I don't believe.
But they will apparently try to soft land the first stage into the ocean to minimize damage. The last sentence was according to secondhand sources, so take it with a grain of salt.

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Dfens March 3, 2014 at 2:32 pm

$100 million to put over 100,000 lbs into low earth orbit! That's about half the cost of an F-22 to get twice the mass of an F-22 into orbit. And they are starting from scratch now. Think of what they might do once they have some experience designing rockets. Hell, if they were Lockheed or Boeing they'd fire everyone involved and get a whole new crew to design the next one because this one didn't cost nearly enough.

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mpower6428 February 28, 2014 at 5:14 am

Just one more cent squeezed in the name of free market "SUBSIDIES"….. I'd rather "we" did it.

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hibeam February 28, 2014 at 8:49 am

We should force Elon to have skin color Quotas. Without enough qualified people available he could have about 1/4 of his work force sitting around being the correct color and not much else. Been there seen that.

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hibeam February 28, 2014 at 8:53 am

I see a lot of smoke. It could crash into an aquifer. We should put a moratorium on launches while Obama worries about aquifers.

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blight_ February 28, 2014 at 9:21 am

Rocket fumes could kill desert turtles. Ban all technology except Obamaphones.

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blight_ March 2, 2014 at 11:54 am

Clearly I am not trolling as effectively as my illustrious comrade hibeam…

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Dfens February 28, 2014 at 11:35 am

Don't you think it is odd how a company using mainly their own funds to develop a rocket can both design and build the rocket for much less than it would cost to have a company like, oh say, Lockheed or Boeing to do the same job using the tax dollars the US government takes from you and me at the point of a gun? No, you say? Yeah, me neither. I've worked on both kinds of programs. In fact, I've worked on both types of programs for companies like Boeing and Lockheed and I can tell you first hand there is one hell of a big difference between the way those companies treat a program where their money is at stake versus a program where your tax dollars are funding the way. It is a day vs. night kind of difference.

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William_C1 February 28, 2014 at 4:03 pm

And you don't think the bottomless government bureaucracy has any impact on this? SpaceX isn't building to the requirements of any particular agency or organization. Do they have to deal with various different unions? Chances are the leadership there is also a bit more thoughtful than Lockheed CEOs. But if you're under the impression that somewhere at Lockheed Martin there is an office of engineers and workers thinking "how can we **** this up?" that's ridiculous. The companies I've worked in (not including Lockheed and I've never been an upper level manager) have never purposely tried to **** things up. You have a lot of sheer incompetence and stupidity going around and there are countless times I question the choices of the management, but you don't see intention to fail on the ground level. Where the stuff is actually being put together.

For all I know the CEOs may be the same sort of scumbags who are running so many banks and other big corporations these days, but unless the government is going to be a more forceful about keeping them in check (no billion dollar bonuses) what can you do?

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Dfens March 3, 2014 at 10:51 am

I have not said there are engineers who are trying to screw things up, but there are managers who do this. Typically those managers are at a very high level. My opinion is, because I don't know anyone at a high enough level to tell me they are in on it, that the management that is in on the scheme for maximizing profit from government contracts is probably limited to corporate executives. A lot of times they will promote stupid people into lower level management jobs, because usually stupidity works in their favor, so stupid and loyal are the primary attributes for much of the management. That doesn't mean everyone is stupid and loyal, but it's a definite trend.

Outside of government contracts there are other forces that tend to reward less than effective management. The reduction in capital gains taxes on short term profits has allowed many ineffective managers to make money while basically destroying a company. They take the money they should be reinvesting into the company and pay it out as dividends and then when the internal capability drops to the point of no longer be cost effective they outsource it to China or India. That goes on in aerospace too. It's pretty obvious what should be done about it. Let's put the capital gains taxes back to what they once were, right? It worked before.

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blight_ March 3, 2014 at 11:56 am

Indeed. AAPL is investing in datacenters with solar panels while the shareholders want more dividends.

Won't be long for Tim Cook now.

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Sean Dione February 28, 2014 at 12:20 pm

I agree with Dfens. Back in the early 80s, I worked for Northrop in Hawthorne, on the F-20, or to some the F-5G. Basically an F-5 with one F-18 engine and upgraded avionics. Northrop was using their own money to develop it hoping to sell it to foreign customers. Unfortunately, foreign countries only wanted what the Air Force/Navy was flying, and since the F-20 was equal (not better) than the F-16, it eventually died. I was amazed how efficient the company worked when no tax dollars was used, compared to the F-18 (Northrop originally designed the F-17, which became the F-18, and they build 40% of all F-18s as the primary sub-contractor to then McDonnel Douglas – now Boeing). I see a pattern here.

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Dfens February 28, 2014 at 12:48 pm

You guys did a great job on the F-20. It was another example of political agendas crushing good engineering. Too bad for all our sakes.

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William_C1 February 28, 2014 at 3:53 pm

The failure of the F-20 really wasn't a fault of political agendas. Instead bad timing and luck on the part of Northrop. I'm sure General Dynamics was of course lobbying to get greater export clearance for the F-16 however as the F-20 was competition.

IIRC there were a lot of disputes between Northrop and McDonnell Douglas over export F/A-18s. Northrop had their lightened (all gear for carrier operations removed) F-18L running against the genuine F/A-18 and both companies were at each others throats.

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Dfens March 3, 2014 at 10:57 am

Wrong. 60 Minutes did a really nice piece on what happened. My cursory search didn't find it on YouTube, but it was some of their better quality work. When did that come out? Maybe '82. It's been a while.

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Dfens March 3, 2014 at 7:10 pm

More like '86. Here's an article from a magazine that describes some of the issues (if this works): http://books.google.ca/books?id=HuMDAAAAMBAJ&…

hibeam February 28, 2014 at 4:37 pm

That was the CIC on the phone. He doesn't care if the guidance code is ready. Launch anyway.

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Dfens February 28, 2014 at 11:48 am

As long as government contracts guarantee the bid "winner" $1.10 for every $1.00 they spend, spending is going to be out of control. It's free money there for the taking, all you have to do to get it is spend as much as you can possibly spend. If Boeing and Lockheed weren't screwing you to get that money, someone else would be. That's capitalism. It can work for you or against you. Your choice.

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blight_ February 28, 2014 at 12:25 pm

Think of how much spending we could do as people if government gave us a dollar-ten for every dollar we spent.

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Stan February 28, 2014 at 10:39 pm

That's not capitalism, that's corporatism. Capitalism competes and innovates. Here all that happens is government contracting work to corporations which have a fiduciary responsibility to their stockholders to max the profit by any and all means necessary. The result is government and the tax payers getting screwed. To be sure nothing stops the government from being competent… except politicians and moneyed interests lobbying their asses off to impede government oversight, and that's on top of the incompetent shitbirds employed by the government.

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Dfens February 28, 2014 at 1:00 pm

Out of an unlimited bucket of cash, too.

Of course, what I remember not so fondly is my dream job, really, working on a NASA rocket program. I got to watch as the defense contractor I worked for did one stupid thing after another only to send costs skyrocketing. It left me with a sick feeling to see my company, and me as part of that company, destroying the space program I cared so much about, and just for money. Here we had the destiny of mankind that was ours to make, and instead we decided to make a buck. It haunts me to this day.

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Dfens February 28, 2014 at 1:03 pm
Dfens February 28, 2014 at 1:06 pm

Then there was this: http://abcnews.go.com/blogs/politics/2010/07/whit

Of course, there is no provision for NASA in the US Constitution, so I suppose what it's charter is, is up to the illegal government that decides on its own how to use it.

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blight_ March 6, 2014 at 7:39 am

"One, he wanted me to help re-inspire children to want to get into science and math; he wanted me to expand our international relationships; and third, and perhaps foremost, he wanted me to find a way to reach out to the Muslim world and engage much more with dominantly Muslim nations to help them feel good about their historic contribution to science, math and engineering."

…wow, no wonder why we never got anywhere after winding down Apollo. We just gave the hell up on going where no man has gone before.

Making people feel good is always cheaper than putting people on the Moon.

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Dfens March 2, 2014 at 7:50 pm

Besides, who said that "government programs" are bad? Hell, the Apollo program was a government program. The SR-71 was a government program. It wouldn't be a big deal if the Falcon was a government program. The difference is not whether or not the government funds the program. It is how the government funds the program that make all the difference.

Every time someone designs a rocket, airplane, ship, or gun under a standard government "cost plus award fee" contract where you and I fund and provide the contractor a profit on development, the costs go sky high and the quality of the product is crap. When a company like SpaceX develops a rocket mainly on their own funds with some offsetting, fixed amount grants from the government, the costs go way down and the quality of the product goes way up.

It is time to ask yourself , which cost model do you want to follow?

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William_C1 March 2, 2014 at 10:30 pm

Cost-plus award fee is supposed to work by tying the profit to certain benchmarks and goals that must be achieved in order to achieve that reward. The "cost" part is supposed to just cover the actual cost of doing the work, without the company making any profit from that part of the contract. Of course this means the company needs to be monitored to ensure they don't cheat the system. Considering all of the agencies and committees that are supposed to do that job, I would *hope* that we were pretty good at it by now. Maybe we aren't.

The type of contract you've claimed the government is using would be a cost-plus percentage of cost contract. That's your "$1.10 for every $1 spent" scenario, and logically that is a very poor system. Such contracts are not *supposed* to be used.

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Dfens March 3, 2014 at 10:18 am

Good job, William. You studied, and you're exactly right. The system isn't supposed to be a straight $1.10 for every $1.00 spent type of system. The problem is, that's exactly what it is. The contractors get, on average, 97% of the award fee regardless of how many years late it is or how many multiples of the original budget they've spent. The fact is the "award fee" system, while well intended (and actually one of the key proponents for this system is a relative of mine) did not work.

There are other aspects of the "award fee" system that do not work as well. The "cost plus" portion of the contract is supposed to be applied in a certain way. "Cost plus means the contractor can spend up to 50% more than they had budgeted in a given year, but when they over spend their budget they get no award fee on that over budget amount. In reality the government agency that's supposed to be doing the "watch dog" function typically fixes the contract such that the contractor never over spends, and thus gets "award fee" on everything they spend in a year.

Again, good job on your investigation of how the system works, or at least is supposed to work. I wish everyone would do the same. After all, it is your money they are spending.

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Dfens March 3, 2014 at 10:35 am

There is no such thing as "corporatism" that is a word some idiot pulled out of their ass. Anyone can get a contract with the government that guarantees them $1.10 for every $1.00 they spend, and that contract provides a profit incentive for them to spend as much money as they can get away with spending. That's capitalism. Capitalism isn't magic. It doesn't always provide an incentive for the kind of behavior you want. Hell, dealing drugs is capitalism. It results in a lot of people dragging society down instead of building it up. Lawyers do pretty much the same thing, but they are supposed to be a net benefit because they are supposed to keep people from resorting to violence to solve their problems.

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William_C1 March 6, 2014 at 12:15 am

Well it sounds to me like the system just needs to be made to work like it is supposed to on paper. Considering the size of our government and amount of people that are supposed to keep track of this, it really should be working right.

Nobody likes to admit it but even back in WWII there was quite a fair share of fraud and abuse. Compared to now we seem to lack the ability to really punish that behavior, and that is made more difficult by the lack of competition these days.

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