Q.Do you think the relationship between SpaceX and the Air Force was damaged by the decision to sue over ULA's block buy of launches?
A. There's no question that a lawsuit is a tough way to initiate a relationship, right? It hinders relationship-building [because] by definition they can't talk to us, we can't talk to them without lawyers in the room. So it was a difficult time while we were litigating. But frankly I think both sides learned a lot from that process — about what was important to us, we learned what was important to the Air Force — so in a really kind of unfortunate way, it forced a common understanding. I think in the end it was very helpful.
And what people failed to recognize is that while we were litigating with the Air Force, Boeing had two lawsuits against the Air Force. So for whatever reason, our lawsuit is the one that gets publicized and talked about? But it's kind of an unfortunate sign of the times or the way of doing business right now.
Q.If the lawsuit helped your understanding of each other, what's the relationship like now?
A. The relationship with the Air Force has never been better. It's very strong. We understand each other. The Air Force sees us working really hard — without getting paid by the way, because with the certification process we're not getting paid. We're working really hard and providing lots of data and lots of insight for free, and the Air Force in the end will benefit. And by the way, this cost the Air Force, too — they're paying for air space and contractors and their own staff to do this work.
I think there will still be some issues that are difficult to manage and work, but I don't see anything sitting in front of us that we're not going to get through. The dialogue is great, very open, all the way up to the Secretary of the Air Force [Deborah Lee James].
Q.Has that relationship improved over the course of the certification process as well?
A. We signed the Cooperative Research and Development Agreement in June 2013. Once we flew the third mission and submitted the data for that third mission, that's when I would say certification really got going. And I think we submitted the data in February or March 2014. It was kind of a slow ramp-up process. We didn't hit certification hard until the June-July timeframe; that's when the teams started understanding each other.
We started understanding when they asked for data; we understood what they were looking for and tried to provide them more complete packages of data. I think it's when the government team understood what we were saying, because we do speak different languages, and we saw this exact same thing when we did the integration with the Dragon and the International Space Station. NASA has its own language and we had ours, I guess as a cultural thing, and until you kind of break the code on language and what you're saying, you talk past each other. So I would say it was very late summer when we actually started really moving.
Q.Right now the Air Force is looking at changes to the certification process. That includes input from SpaceX and ULA. What are your main suggestions?
A. There are two. One is you could be certified with open work, because the way we ended up going through this certification process, it's very similar to what you go through for the flight-worthiness certification before you actually fly a mission. What we wanted to acknowledge is that there will be open work, and you will continue to do work that is very similar to certification, if not the exact same work, right up until you do a flight-readiness review. And so you want to basically certify with knowledge that there is still open work to get done. That's the primary change.
The other change that we wanted to do is ... the certification process is very phase-oriented, and it was hard to get into the next phase before you completed the first. That phasing process just didn't work out well. I think we're going to try to rework it.
Q.You've talked about the cultural gap before, particularly given some of the things said early on in the certification process. Was there a misunderstanding about how fast this could go?
A. We started learning what it was going to take to get through this process on both sides, because the Air Force has never certified a rocket before. So it was really kind of the lag time between their request [for data], our generating the data to fulfill their request. If it took us a month to generate the data package, [it felt like] it should take the Air Force a month or so to review it, because of the engineering that goes into producing the data they're assessing and engineering on the other side. So I think it was that part that seemed really slow. It wasn't that there wasn't work going on.
Q.Have you been surprised by the focus on the Hill on this issue since you began the certification process?
A. There is a lot of energy on this topic. Space launch has kind of been owned by ULA, and we're the startup and we're disruptive, and we are kind of making people think hard about what's been going on. Is it the right way to move forward, or should we consider these new opportunities and these new ideas? But change is hard. People are dinosaurs, people don't like to change. And this is huge change. And it's business and it's jobs.
But in the end, I think what SpaceX is trying to promote with ultra-reliable, low-cost launch is good for the war fighter. I mean it seems we should be focusing more on our military budget, not on a commodity like launch. I think launch is a commodity. And it should be focused on building systems to protect our children when we send them overseas to conflicts. I think that's where we should be spending our money, not on inflated launch prices.
Q.In March you were at a hearing with ULA, and some members of Congress were clearly taking swipes at SpaceX. Were you surprised?
A. Just like the Air Force is a huge organization, Congress is a pretty large organization. And there are supporters of SpaceX in Congress and there are detractors. That particular hearing, the leadership is from Colorado, Alabama and Utah, which is kind of the ULA [base]. Frankly it was an easier hearing than I anticipated, so I was not surprised. I hope that the members of Congress kind of heard our message and will be a little bit more sympathetic to what we're trying to do.
Q.Overall, have you been surprised by your interactions with Congress and the politics of DC?
A. Clearly there are folks on the Hill that have their constituency, [one that] is largely built off our competitors and the kind of standard industrial base for the aerospace industry. It's hard to make progress in those offices, obviously, because congressmen are there to represent their constituents. But we've gotten some really great support from surprising areas. We have our perspective, ULA has their perspective; hopefully Congress mediates and comes up with the right perspective. There's three sides to every story.
Q.SpaceX is investing heavily in the development of reusable technology. What are the benefits?
A. There's a lot of benefits to our current ascent customers on reusability. My vehicle will be more reliable because of reusability. First of all, returning is a much harsher environment than ascent, so I'm designing for the return so the ascent customer gets the benefit of much higher margins. The fact that I get this vehicle back — I get to see what stresses did it undergo, and am I seeing cracking? If you can bring back your vehicle and you then see the cracks form, and you figure out that you double- or triple-overlap and rivet — so you learn a lot by having your vehicle go through these harsh missions, bringing them back, and redesigning and upgrading them to be able to accommodate that. So the forensics, post-mission, on how did that vehicle survive is also important to reliability. And obviously the other benefit is cost. If we can reuse the vehicle, then we've saved the cost of producing the vehicle. And then all we have is the cost of refurbishment.
Q.Are there aspects of reusability that would benefit national security missions in particular?
A. The higher margins to accommodate the re-entry, and then the ability for us to assess and do forensics on the rocket after the fact. I think reliability, from the Air Force perspective, that's probably the key piece. Now in tight budget scenarios the lower cost is also important, but you'll see that customers like NASA and the Air Force, they don't buy insurance and it's hard to replace the asset that gets lost if a mission were to fail. They're really focused on mission reliability and assured access, and so I think that is the stronger feature for them as opposed to cost.
By Aaron Mehta in Colorado Springs, Colo.