"If DOD requires all offers to contain both fixed-price and cost-reimbursement features for launch services and capability, respectively, similar to the way it currently contracts with ULA, there could be benefits to DOD and ULA, but potential burdens to new entrants. Alternatively, if DOD implements a fixed-price commercial approach to launch proposals, DOD could lose insight into contractor cost or pricing. DOD could also require a combination of elements from each of these approaches, or develop new contract requirements for this competition."
"In December 2013, DOD signed a contract modification with ULA, committing the government to buy 35 launch vehicle booster cores over a 5-year period, and the associated capability to launch them. The new contract represents significant effort on the part of DOD to negotiate better launch prices through its improved knowledge of contractor costs, and DOD officials expect the new contract to realize significant savings, primarily through stable unit pricing for all launch vehicles. DOD is also leading a broader competition for up to 14 additional launches, expected to begin in fiscal year 2015."
"Recently, some have claimed that the Air Force's block buy of 36 booster cores from the incumbent will save the taxpayer "$4.4 billion over the next several years." Any "savings" resulting from a block buy of 36 rocket cores from the incumbent provider are derived directly from a 50 percent year-over-year budget projection increase in FY2012, which was purposefully based on worst-case assumptions for a single- Launch buy, and acknowledged at the time by the incumbent as being inflated.5 If SpaceX had contracted for these missions, using the same baseline, we would have saved the taxpayer a total of $11.6 billion."
"ULA was formed to enable assured access to space with two separate launch systems, with recognition the that market demand was insufficient to sustain two competitors. We went from two competing teams with redundant and underutilized infrastructure to one team that has delivered the expected savings of this consolidation."
Hearing Summary: EELV costs under ULA up 166%, ULA leery of competition, SpaceX eager for competition.— NASA Watch (@NASAWatch) March 5, 2014