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Elon Musk says he lost a multi-billion-dollar contract when SpaceX didnít hire a public official
Quartz ^ | May 23, 2014 | Tim Fernholz

Posted on 05/24/2014 7:40:53 AM PDT by Corporate Democrat

Elon Musk isn’t afraid to shake things up, and he did so again with accusations that US defense contracts awarded to a competitor were the product of corruption.

SpaceX, Musk’s orbital transport firm, has been competing for a major contract to put US Air Force satellites in orbit. With a dearth of private investment in space and the end of the US space shuttle program, SpaceX has quickly leapt to the fore of aerospace firms with the help of contracts from NASA to provide re-supply missions to the International Space Station and develop a manned spacecraft to fly astronauts there. + He’d like to expand his franchise to the defense department, but his company has faced a more challenging time displacing the incumbents there: In a no-bid process, United Launch Alliance (ULA), a joint venture of Lockheed Martin and Boeing, received a bulk contract worth billions of dollars for 36 rocket launches earlier this year, despite plans to introduce more competition and other cost-saving measures.

Musk’s tweets yesterday focused on what happened next: The man who awarded ULA the contract, defense official Roger “Scott” Correll, was hired soon after his retirement to handle government relations at Aerojet Rocketdyne, a company that builds rocket engines for ULA. Musk didn’t mince words online when offering his interpretation of events:

V likely AF official Correll was told by ULA/Rocketdyne that a rich VP job was his if he gave them a sole source contract— Elon Musk (@elonmusk) May 23, 2014

Reason I believe this is likely is that Correll first tried to work at SpaceX, but we turned him down. Our competitor, it seems, did not.— Elon Musk (@elonmusk) May 23, 2014

A SpaceX spokesperson confirmed Musk’s tweets, and while the exact timing is not clear, they seem to indicate that it was while Correll was still a government official.

Update, 4:15 p.m.: An Aerojet Rocketdyne spokesperson told Quartz that “those allegations are completely without merit. We are confident of the process that we followed in hiring Mr. Correll. Mr. Correll received the necessary clearances and approvals from DOD, and his duties and actions on behalf of Aerojet Rocketdyne are consistent with those clearances and approvals.”

ULA has not yet responded to messages seeking comment.

While former government officials transitioning to the defense industry isn’t unusual or necessarily illegal, negotiations over such jobs before retirement would raise legal and ethical questions.

It’s easy to see this complaint as sour grapes from a losing competitor. After missing out on the contract, Musk’s company challenged the result in court, arguing that it was awarded without competition. Musk has also pointed out that the deal requires purchases of rockets from Russia’s aerospace industry, whose leaders are currently facing US sanctions for their role in annexing Crimea. A court ruling in Musk’s favor, blocking the contract, was overturned on appeal.

But Musk isn’t the only one with concerns about this arrangement. The National Legal and Policy Center, a Washington ethics watchdog, has issued a warning about the deal, saying that in the worst case scenario it compares to another scandal where an Air Force procurement official was prosecuted for making a lucrative deal with Boeing then accepting a position with the company.

Senator John McCain has also written to defense department officials raising questions about how the contracts were awarded and asking for a full investigation. Given the huge cost disparities between the two companies—SpaceX launches cost about $100 million, while ULA launches cost two to four times as much—taxpayers are likely to be interested, too.


TOPICS: Crime/Corruption; Government; News/Current Events
KEYWORDS: elonmusk; nasa; revolvingdoor; spacex
TL DR:

-Elon Musk accuses US Gov of corruption in awarding of rocket deal

-Elon Musk says that the official who awarded the contract, Roger Correll, asked both companies for a job. He was rejected at SpaceX, accepted by joint Lockheed Martin and Boeing venture. (ULA)

-Mr. Correll got cushy desk job as "Vice President of Government Acquisition and Policy" at the company that makes the engines for ULA, retiring right after awarding the contract.

-SpaceX rocket launches cost at least double the price for the taxpayer.

-Contract won by ULA requires USA to buy more rockets from Russia. SpaceX does not.

1 posted on 05/24/2014 7:40:53 AM PDT by Corporate Democrat
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To: null and void

Ping!


2 posted on 05/24/2014 7:41:30 AM PDT by Black Agnes
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To: Corporate Democrat
We are confident of the process that we followed in hiring Mr. Correll. Mr. Correll received the necessary clearances and approvals from DOD, and his duties and actions on behalf of Aerojet Rocketdyne are consistent with those clearances and approvals.”

This is not a rebuttal to the accusation that he was pay-for-play.

3 posted on 05/24/2014 7:44:40 AM PDT by jiggyboy
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To: Corporate Democrat
If true, this isn't the first time Boeing has done this. In a particularly obnoxious case of corruption, Boeing hired an official who awarded several contracts to Boeing. The official's daughter and fiance got hired at Boeing too. Shocking (not), said official was nominated by Bill Clinton.

Boeing got away with it until she awarded them a 37 billion dollar contract that leased 100 refueling aircraft for $370 million each. Problem: it only cost $150 million to buy each aircraft outright. People noticed. **** hit the fan, the Boeing CEO resigned. She served nine months and got her federal pension. Boeing paid a half billion fine. See: Darleen Druyun.

If this is what it looks like, it will be harder to get Boeing or Lockheed Martin for this, IMHO. Because this time the companies hired the official at a dependent company of a joint venture of theirs. So the financial risk of being too overtly corrupt is minimized.

4 posted on 05/24/2014 7:49:04 AM PDT by Corporate Democrat
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To: Corporate Democrat

Let me get this straight.....Elon Musk has benefitted from Obama’s crony Capitalism before. He is the reason NASA isn’t in the ‘Space’ business. But this time he lost out and is whining about it? Be careful, Mr Musk. Obama bites hard on those who cross him!


5 posted on 05/24/2014 8:00:04 AM PDT by originalbuckeye (Moderation in temper is always a virtue; moderation in principle is always a vice. Paine)
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To: Corporate Democrat

‘-SpaceX rocket launches cost at least double the price for the taxpayer.’

SpaceX’s cost to launch is double that of ULA???? WTF? Gotta be a typo in there because at least for civilian launches Elon is only charging $1,500/lb whereas everyone else charges about $10,000/lb.


6 posted on 05/24/2014 8:01:24 AM PDT by Jack Hydrazine (Pubbies = national collectivists; Dems = international collectivists; We need a second party!)
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To: jiggyboy

It seldom is. It was the same way with Kerry’s fraudulent medals. The DOD confirmed tbe paperwork was followed and not the lies on it.


7 posted on 05/24/2014 8:03:37 AM PDT by Bogey78O (We had a good run. Coulda been great still.)
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To: Corporate Democrat; COUNTrecount; Nowhere Man; FightThePower!; C. Edmund Wright; jacob allen; ...

Nut-job Conspiracy Theory Ping!

To get onto The Nut-job Conspiracy Theory Ping List you must threaten to report me to the Mods if I don't add you to the list...

8 posted on 05/24/2014 8:04:17 AM PDT by null and void (When was the last time you heard anyone say: "It's a free country"?)
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To: Jack Hydrazine

Yeah that was a typo. Whoops. I meant to say that ‘ULA rocket launches cost at least double the price for the taxpayer’.


9 posted on 05/24/2014 8:05:28 AM PDT by Corporate Democrat
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To: Corporate Democrat
This conjunction of an immense military establishment and a large arms industry is new in the American experience. The total influence — economic, political, even spiritual — is felt in every city, every statehouse, every office of the federal government. We recognize the imperative need for this development. Yet we must not fail to comprehend its grave implications. Our toil, resources and livelihood are all involved; so is the very structure of our society. In the councils of government, we must guard against the acquisition of unwarranted influence, whether sought or unsought, by the military–industrial(-congressional) complex. The potential for the disastrous rise of misplaced power exists, and will persist. We must never let the weight of this combination endanger our liberties or democratic processes. We should take nothing for granted. Only an alert and knowledgeable citizenry can compel the proper meshing of the huge industrial and military machinery of defense with our peaceful methods and goals so that security and liberty may prosper together.
-farwell address of President Dwight D. Eisenhower on January 17, 1961
10 posted on 05/24/2014 8:05:48 AM PDT by Jack Hydrazine (Pubbies = national collectivists; Dems = international collectivists; We need a second party!)
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To: Corporate Democrat

Okay. That’s better but I think you are underestimating that number. In the article ULA would be about four times what SpaceX would charge to the taxpayer for the contract.


11 posted on 05/24/2014 8:08:11 AM PDT by Jack Hydrazine (Pubbies = national collectivists; Dems = international collectivists; We need a second party!)
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To: Jack Hydrazine

http://en.wikipedia.org/wiki/Military%E2%80%93industrial_complex


12 posted on 05/24/2014 8:09:20 AM PDT by Jack Hydrazine (Pubbies = national collectivists; Dems = international collectivists; We need a second party!)
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To: Jack Hydrazine

Try reading it again:

Given the huge cost disparities between the two companies—SpaceX launches cost about $100 million, while ULA launches cost two to four times as much—taxpayers are likely to be interested, too.


13 posted on 05/24/2014 8:14:26 AM PDT by Sequoyah101
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To: Corporate Democrat

What bothers me about Elon is the delivery of his accusation. It almost sounds like he is whining about it and, boy, do I hate whiners, complainers, and kevetchers. But at least he put it out there.

I would tell him that he needs to just focus on getting his @$$ to Mars and don’t worry about that. In the end he’ll win because his rockets will outclass all others.

Why? Check this headline out.

SpaceX Set to Test Raptor Engine Components at NASA Stennis
http://www.freerepublic.com/focus/news/3158358/posts?page=22

This engine will generate a million pounds of thrust and will be used for the launch vehicle that will lift the Mars Colonial Transporter. This will be a super-heavy lift launch vehicle similar to a Falcon 9 Heavy but on steroids.

http://en.wikipedia.org/wiki/SpaceX_rocket_engine_family
In February 2014, they announced that Raptor would be used on both a new upper stage as well as for the very large 10-meter-diameter launch vehicle of the Mars Colonial Transporter. Each booster core will utilize nine Raptor engines, similar to the use of nine Merlin 1s on each Falcon 9 booster core.

As of February 2014, Raptor is being designed to produce 4.4 meganewtons (1,000,000 lbf) of thrust with a vacuum specific impulse (Isp) of 363 seconds and a sea-level Isp of 321 seconds.


That’s 27,000,000 lbs. of thrust at liftoff (actually a little less).

When all is said and done the military is going to begging him to carry their satellites into orbit.

Just the Falcon 9 Heavy, set for liftoff either the end of this year or early next year, will outclass all other competitor’s (US companies, Chinese, Russians, Europeons) launch vehicles because it will be able to lift 53,000 lbs. into LEO and 21,200 lbs. into GTO.

And if he can recover his strap-on boosters, main stage, and the second stage and re-use them again in an money-saving manner he will simply leave them all in the dust.


14 posted on 05/24/2014 8:33:19 AM PDT by Jack Hydrazine (Pubbies = national collectivists; Dems = international collectivists; We need a second party!)
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To: Sequoyah101

Most likely it will be four times since we’re dealing with government contracts. SpaceX can do it for quite a bit less than anyone else.


15 posted on 05/24/2014 8:34:34 AM PDT by Jack Hydrazine (Pubbies = national collectivists; Dems = international collectivists; We need a second party!)
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To: jiggyboy

You’re right. I noticed their “blah, blah, blah, redirect, obfuscate” immediately.


16 posted on 05/24/2014 8:35:09 AM PDT by TheOldLady
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To: Jack Hydrazine
What bothers me about Elon is the delivery of his accusation. It almost sounds like he is whining about it and, boy, do I hate whiners, complainers, and kevetchers. But at least he put it out there.

All accusations are prone to sound like whining, but I think there is a lot of truth behind his claims.

And as events have evolved, the era of good feeling vs. Russia, which is what led to the early success of ULA, has evaporated and we are now facing an adversary.

I would much rather see some real competition among US companies for the US launch business. Why should US launches strengthen Russia? Lockheed and Boeing got much too friendly when they proposed ULA. Neither company wanted to lose, so they combined to become the "only game in town" and raised the price enough that they both won.

SpaceX has now shown that they can be very successful and the competition should be re-opened.

17 posted on 05/24/2014 12:07:08 PM PDT by CurlyDave
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To: CurlyDave

I say let SpaceX do what it does best and leave the competition in the dust. Don’t even worry about re-opening competition. The military will soon enough be breaking down SpaceX’s door to get access to their heavy lift and super-heavy lift capabilities.


18 posted on 05/24/2014 12:40:32 PM PDT by Jack Hydrazine (Pubbies = national collectivists; Dems = international collectivists; We need a second party!)
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To: null and void

some animals are more equal than others


19 posted on 05/24/2014 9:25:02 PM PDT by Nifster
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