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SpaceX and the United Launch Alliance may finally compete to launch a military satellite

The Air Force is taking bids for its next GPS-III probe

SpaceX Falcon 9

SpaceX and the United Launch Alliance may finally compete with one another for the military’s business. The United States Air Force is officially taking bids from launch providers for its third GPS-III satellite; the probe is slated to go up in 2019, and it needs a rocket to carry it into space. Since SpaceX and the United Launch Alliance (ULA) are the only two companies authorized to launch military payloads, they may be competing directly for the Air Force launch contract. Bids for the GPS-III contract are due by September 19th.

This kind of competition is new for the Air Force

This kind of competition is new for the Air Force. For the past decade, ULA — a partnership between Boeing and Lockheed Martin — had a monopoly on launching military satellites, since it used to be the only launch provider authorized to carry Air Force payloads. That all changed in May 2015, when SpaceX received certification from the Air Force to launch military payloads on its Falcon 9 rocket. The Department of Defense said the SpaceX certification would ultimately create competition, helping to drive down the cost of launches and provide more options for the military.

"We hope to continue fostering competition in order to promote innovation and reduce cost to the taxpayer while maintaining our laser focus on mission success," Lt. Gen. Samuel Greaves, commander of the Air Force’s Space and Missile Systems Center, said in a press release for today’s solicitation.

The United Launch Alliance's Atlas V rocket. (ULA)

But ULA wasn’t too keen on competing with SpaceX at first. When it came time for the two companies to finally bid on a military payload — the Air Force’s second GPS-III satellite — ULA decided not to offer a proposal. The company claimed it would not have an Atlas V rocket ready in time for the launch and former ULA executive expressed concerns about getting in "cost shootout" with SpaceX. As a result, SpaceX pretty much won the $87.2-million contract by default, marking the first time the company was granted a military launch contract.

ULA has said that it will compete for this new GPS-3 contract, though, and there are likely more SpaceX-ULA face offs to come. Today’s solicitation is the second of nine launch contracts the Air Force said it would put up for bid through fiscal year 2017. That means SpaceX and ULA could be going head to head seven more times. The competitions could potentially take some business away from ULA, since SpaceX offers significantly cheaper launch options. A ride on the Falcon 9 starts at $60 million, while the average cost of a ULA launch is $225 million. Even the cheapest option on ULA’s Atlas V rocket is around $164 million, according to the company.