The US Air Force, which purchases space launches on behalf of the entire US government, is drastically changing the way it buys rockets after years of rising costs.
A memo from Department of Defense acquisition chief Frank Kendall reportedly supports two approaches to purchasing space launches in an affordable way: pursuing a block buy of 36 cores from incumbent United Launch Alliance (ULA), and opening 14 launches to competitive bids.
ULA markets, builds and launches the Delta IV and Atlas V - collectively known as evolved expendable launch vehicles (EELVs) - which have, since their development in the late 1990s, held a firm monopoly on large government launches.
The EELV programme was meant to develop two competing launch vehicles, by Boeing and Lockheed Martin, with the expectation that a burgeoning commercial market would ensure plenty of demand for both and reduce launch costs for the US government.
For a number of reasons the expected market never developed, and the two US-based companies found they could not compete with Russian and European competitors. To preserve an important capability, US regulators allowed the companies to fold into a single entity - ULA - so both launch vehicles would remain in production.
While ULA has lofted the occasional commercial satellite, for practical purposes its sole customer is the US government. Because the US government wants to - and in many cases, because of the sensitive nature of the payloads which are often deemed crucial to national security, has to - use US launchers, for many payloads there was simply no alternative.
While ULA has never had a launch failure, the price of its products has risen exponentially, and with the US government in the midst of a serious budget crunch, acquisitions officials are becoming increasingly frustrated.
The rise of privately owned upstarts SpaceX and Orbital Sciences could dramatically change the situation. Elon Musk, SpaceX's mercurial president and chief tech officer, has been unrestrained in his criticism of ULA. Likewise, ULA has been publicly sniping at SpaceX.
The USAF awards launch contracts on a rolling five-year basis, with the latest round of announcements imminent. SpaceX has been striving to find a way into the new contract.
In October 2011, the relevant agencies - the USAF, NASA and the National Reconnaissance Office - released qualifying criteria for inclusion in the contract, starting small but unlocking increasingly more valuable payloads as a launch vehicle demonstrated reduced risk. Under the criteria, launch vehicles with a minimum of three consecutive successful launches are qualified to launch payloads at the low end of the spectrum.
SpaceX's Falcon 9 now lists four successes - or three and one partial - the latest, a 10 August ISS supply run for NASA, lost one of its nine engines early in the flight; the supply capsule made it up successfully but a small secondary, a prototype communications satellite, did not.
Orbital Sciences has another likely future contender, the Antares, scheduled to make a first flight in early 2013. The vehicle is ready but the Wallops Island, Virginia launch pad is not yet complete.
Previous five-year contracts have awarded all launches to ULA on a one-by-one basis, an inefficient method given the inevitable outcome. This time, with the new focus on cost, ULA has proposed a block buy, wherein the US government commits ahead of time to buy a certain number of rocket cores - the heaviest payloads require a Delta IV Heavy, which has three cores; all others use a single core.
ULA boasts the most reliable launch vehicles on the planet, but cannot compete with the new entrants on price.
Meanwhile, the USAF is seeking the best of both worlds. A 27 November memo from Kendall has authorised the USAF to begin negotiations for 50 cores, of which 36 would come from ULA. The other 14 would be open for competition from whoever qualifies and, indeed, SpaceX has claimed a contract to launch four cores - DSCOVER, a satellite that will monitor the sun for solar flares, and Space Test Program-2, which will launch on a three-core Falcon Heavy.
Those numbers may change. Under the Pentagon's Byzantine rules, Kendall's memo only grants authorisation to negotiate - but will likely hew closely. At long last, real competition is entering the US government launch market.