The U.S. Air Force has awarded United Launch Alliance a $152.4 million contract for launch services using a Delta IV Heavy. The launch will support the National Reconnaissance Office (NRO) for a program the Air Force is calling “Launch Mission One.” While the specific payload was not revealed, the mission is scheduled for June 30, 2021.
While launch services contracts are fairly routine, this contract is significant because of the relatively low price tag. The Delta IV Heavy list price is typically placed at around $350 million. In fact, as recently as February 2018, ULA CEO Tory Bruno set the price at $350 million on his Twitter feed.
Hey @elonmusk , congrats again your heavy launch. Clarification: Delta IV Heavy goes for about $350M. That’s current and future, after the retirement of both Delta IV Medium and Delta II. She also brings unique capabilities, At least until we bring Vulcan on line.
— Tory Bruno (@torybruno) February 12, 2018
Therefore, the $152.4 million contract awarded on October 24, 2018 represents a significant decline. In fact, the price is competitive with an expendable version of SpaceX’s Falcon Heavy, which the Hawthorne California company lists for $150 million. SpaceX has entered the launch market offering significantly lower prices than competitors, shaking up the launch industry in the process. However, ULA has fought back by lowering its prices and beginning development of a new launch vehicle family.
It’s not clear if ULA can make a profit by selling expensive launch vehicles like the Delta IV Heavy at such low prices. However, the move will maintain competitive pressure on SpaceX and keep production lines operating until lower-cost Vulcan Centaur complete development.