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SpaceX Breaks Boeing-Lockheed Monopoly On Military Space Launches

The first stage of the SpaceX Falcon 9 rocket returns to land at Cape Canaveral Air Force Station in FloridaThe first stage of the SpaceX Falcon 9 rocket returns to land at Cape Canaveral Air Force Station in Florida
The first stage of the SpaceX Falcon 9 rocket returns to land at Cape Canaveral on Monday. © Joe Skipper / Reuters REUTERS

(Reuters) – The U.S. Air Force on Wednesday awarded billionaire Elon Musk’s SpaceX an $83 million contract to launch a GPS satellite, breaking the monopoly that Lockheed Martin and Boeing have held on military space launches for more than a decade.

The Global Positioning System satellite will be launched in May 2018 from Florida, Air Force officials said.

The fixed-price award is the military’s first competitively sourced launch service contract in more than a decade. It ends the exclusive relationship between the military and United Launch Alliance, a partnership of Lockheed Martin (LMT) and Boeing (BA).

ULA did not compete for the GPS launch contract, citing accounting issues, implications of trade sanctions limiting imports of its rockets’ Russian-made engines and, according to a former ULA vice president, SpaceX’s cut-rate pricing.

“This GPS III Launch Services contract award achieves a balance between mission success, meeting operational needs, lowering launch costs, and reintroducing competition for National Security Space missions,” Lieutenant General Samuel Greaves, who heads the Air Force’s Space and Missile Systems Center, said in a statement.

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Between now and 2018, the Air Force plans to solicit bids for contracts covering eight more satellite launches.

The $82.7 million fixed-price contract awarded to Space Exploration Technologies, as the company is officially known, covers production of a Falcon 9 rocket, spacecraft integration, launch operations and spaceflight certification.

Musk, a billionaire entrepreneur who helped found Tesla Motors (TSLA) and PayPal (PYPL), started SpaceX in 2002 with the goal of slashing launch costs to make Mars travel affordable.

SpaceX also said on Wednesday it plans to send an unmanned Dragon spacecraft to Mars as early as 2018, a first step in achieving Musk’s goal to fly people to another planet.