STEVE INSKEEP, HOST:
Each year, the United States military launches more than half a dozen satellites into space. Nearly every one is launched on rockets built buy a single company. It's effectively a monopoly. Now, a rival firm is suing, saying this monopoly is unfair and costly.
NPR's Geoff Brumfiel reports.
GEOFF BRUMFIEL, BYLINE: OK. First up, let's have a little ballistic taste test. Here's Rocket A.
(SOUNDBITE OF ROCKET A LAUNCHING)
BRUMFIEL: And here's Rocket B.
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BRUMFIEL: Sound similar? Well, they are. Both have a pointy end that faces up. Both will carry your satellite into orbit. But Rocket A costs between 100 and $300 million more, depending on who you ask. So why has the Air Force just signed a contract to buy a dozens of that Rocket A from a single supplier?
Michael Gass is president of United Launch Alliance, the company that makes the pricey rocket. He says it's not uncommon for the government to pay a single company for a big ticket item.
MICHAEL GASS: Submarines, airplanes, tankers - you name the large programs and it typically gets down to one sole source supplier.
BRUMFIEL: In the case of rockets, a lot of it comes down to rules. Military satellites could be delicate, expensive things, and so there are lots of rules about the rockets that launch them. In fact there are so many rules that's actually why there's a monopoly. It used to be that two companies competed to launch the military and spy satellites. But Gass, of ULA, says that getting two companies to operate at the exacting standard of the Air Force was actually costing the government more.
GASS: There was not enough business to sustain two competitors that had two different sets of factories, that had two different sets of engineering teams, had two sets of launch crews.
BRUMFIEL: So, in 2006, the Air Force made the companies, Boeing and Lockheed-Martin, merge their business into United Launch Alliance. The government gave ULA a monopoly in order to get what it wanted - lots of launches that met its specifications.
SCOTT PACE: It's been very expensive.
BRUMFIEL: Scott Pace directs the Space Policy Institute at George Washington University. At a cost of more than $60 billion, the program to launch these rockets is the fourth-largest in the Pentagon budget. Congress has questioned the high price but Pace says the government has gotten what it paid for.
PACE: They have an outstanding track record, which is really what the government wanted to accomplish.
BRUMFIEL: ULA hasn't messed up once. All 50 of the military satellites it's launched so far have worked perfectly. And the monopoly is technically legal.
PACE: There's actually a fairly long court review of it. The decision was that this was in the best interest of the government.
BRUMFIEL: Now, a new court challenge by California firm SpaceX again raises questions about the monopoly. At a recent press conference, SpaceX founder Elon Musk said that his company deserves some of the business. But the Air Force's latest mega-contract with ULA shuts SpaceX out for years to come.
ELON MUSK: This contract is costing the U.S. taxpayers billions of dollars for no reason.
BRUMFIEL: He says ULA's rockets cost way too much.
MUSK: They're insanely expensive.
BRUMFIEL: SpaceX says its newer, cheaper rockets can meet all the stringent requirements. The company hopes to be fully certified by the Air Force later this year. A federal court will soon review the merits of SpaceX's claim. But for now, the monopoly continues. ULA will launch another military satellite later this week.
Geoff Brumfiel, NPR News.
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INSKEEP: It's NPR News.
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