Elon Musk Cries Foul After US Govt Chooses Rival Rockets Over SpaceX

May 22, 2019 21:45 UTC

By CCN: Elon Musk must be feeling the pressure of his SpaceX and Tesla empires crumbling. SpaceX filed a lawsuit against the federal government, alleging the Air Force Space and Missile Systems Center shouldn’t have awarded billions in contracts to other firms – including Jeff Bezos’ Blue Origin.

Air Force Spots SpaceX’s Weaknesses

The Air Force evaluated proposals from SpaceX, Northrop Grumman, Blue Origin, and United Launch Alliance, the latter of which is a joint venture between Lockheed Martin and Boeing. Each of the three competitors had rockets that the Air Force preferred and thus handed out nearly $2.3 billion to those contractors over SpaceX.

The Air Force identified three weaknesses in SpaceX’s Starship rocket, which Musk’s company says resulted in an unfair comparison and evaluation of its product. These weaknesses, according to the lawsuit, involved “unstated criterion” in which the Starship rocket would be built “against current processing requirements for Government reference missions.”

This isn’t the first time Elon Musk sued the Air Force.

SpaceX Submitted a Lousy Bid

So what’s really going on?

There are likely two reasons why the Air Force dinged Elon Musk and SpaceX and one reason why Musk is suing.

The Air Force’s official reasons for rejecting SpaceX likely stem from an honest application of government rules and regulations to SpaceX’s proposal.

Government contracting rules are notoriously riddled with bureaucracy in which every “i” must be dotted and every “t” must be crossed. On page 27 of an DOD’s IG report, Musk himself told Acting Secretary of Defense Patrick Shanahan:

“SpaceX was not successful in the recent Air Force competition for a launch service contract…SpaceX had written a poor proposal that missed the mark.”

That admission alone is going to be a major obstacle for the Elon Musk lawsuit.

Truth Bomb: The Air Force Sees SpaceX as a Major Risk

The second reason the Air Force may have rejected SpaceX is the very fact that the Elon Musk empire has been struggling for some time. The Air Force knows that Northrup, Lockheed, and Boeing all have successful track records with space flight. Giving money to them is a no-brainer.

Blue Origin is Jeff Bezos’ company, and the Amazon CEO has a successful track record in just about everything he touches.

SpaceX has had many high profile successes…and disasters. Elon Musk releasing a video compilation of SpaceX rocket explosions may have been a stab at self-deprecating humor, but government bureaucrats have no sense of humor.

Elon Musk Is Just Butthurt

The reasons Elon Musk and SpaceX are suing the federal government are twofold: sour grapes and SpaceX needs the money.

The Elon Musk huckster empire is starting to crumble. The endless problems with Tesla and SpaceX blowups are starting to catch up with the tech entrepreneur. It seems likely the federal government took a look at all the government money Elon Musk has already received and decided to cap it.

As it is, Tesla has already secured more than $5.3 billion in taxpayer money, whereas Musk has contributed much less. Tesla grabbed a $3 billion state subsidy for a factory in California, and another $500 million in selling California and other jurisdictional regulatory credits. Nevada gave it a $1.3 billion tax incentive. The Department of Energy handed it a $45 million discounted loan. It picked up $284 million in federal income tax credits.

The LA Times reported that SpaceX received almost $5 billion in federal subsidies.

This article was edited by Gerelyn Terzo.

Last modified: May 22, 2019 21:34 UTC

@captsmedley

Lawrence Meyers has published over 2,500 articles on finance and policy at outlets including Breitbart.com, Investorplace, WyattResearch, LearnBonds, Lifezette.com, TownHall.com, U.S. News & World Report, and The New York Observer. He hails from New York City in the USA.