ULA's reasoning was pretty straightforward. The main reason they dropped out of the competition is because the bidding was to be decided largely on price, and they can't compete with SpaceX on price -- their selling point these days is that they're the boring, less-risky option that nobody ever got fired for buying. This is totally a valid selling point, until SpaceX gets a longer track record, but GPS satellites are the kind of payload that wouldn't be too disastrous to lose, so in this case going for the cheaper launch option makes a lot of sense.
This would be OK if Space-X had fixed their problems with the Falcon 9. Space-X has been very quiet - they haven't issued a news release for almost four months now. There's still no date for the next launch. Spaceflight Now said "early November" in an article back in September[1], but that date has come and gone. There's "TBD" launch date in December, but that's probably not realistic.<p>The Falcon 9 explosion, Space-X claims, was due to a strut being far under-strength. When they tested their inventory of struts made by a contractor, some failed at 20% of the rated load. Space-X hasn't provided further details. They claim to be "tightening up their supply chain". That probably means requiring 100% traceability of every structural part back to the raw material and much more testing at incoming inspection. This is standard in aviation (which is why structural failure airplane crashes of production aircraft are very rare) but something Space-X wasn't doing.<p>One wonders what other problems they've found as they put part after part through strength tests. Probably more than they've admitted, or they'd be launching by now.<p>[1] <a href="http://spaceflightnow.com/2015/09/01/falcon-9-rocket-to-be-grounded-longer-than-expected/" rel="nofollow">http://spaceflightnow.com/2015/09/01/falcon-9-rocket-to-be-g...</a>
It's pretty straightforward, entering competition would be a lose/lose/lose prospect for ULA at this point.<p>First off, they can't meet SpaceX's prices, no matter what, so they're unlikely to win out on a straight-up bid on a single launch (they love those block buys).<p>Secondly, they don't have any more RD-180s to build more Atlas V's, which means they can't realistically promise any future Atlas launches. If they did they'd have to crawl back and say "sorry, can't do it." Alternately, they could try to put forward a Delta IV launch as an option, but that's even more expensive.<p>Thirdly, putting in a singular bid at this point and trying to cut their profit margin to the bone as much as possible would hit them doubly hard. On the one hand it would mean they'd make no money. On the other hand it would reveal publicly their true costs, and make it blatantly obvious how much they're over-charging on launches with the block buys plus launch assurance subsidy (which run at over $300 million per core, or so).<p>They're better off laying low and just hoping they can work their connections for more back-door block buys in the future.
<i>Not</i> saying it shouldn't be submitted here, but discussion of SpaceX news is one thing that reddit does better than HN, thanks to the generally excellent moderation of the /r/spacex subreddit.<p>Here's the corresponding link to this story on that sub:<p><a href="https://www.reddit.com/r/spacex/comments/3t31gt/ula_says_it_will_not_bid_for_us_gps_satellite/" rel="nofollow">https://www.reddit.com/r/spacex/comments/3t31gt/ula_says_it_...</a>
One ULA reason for dropping out:<p>"the Air Force used a procurement process that would give a lot of weight to the prices companies bid"<p>That's hysterical! The gall of the Air Force to do such a thing!
Dumb question, but what's preventing SpaceX from raising their bid significantly now that they know they're guaranteed to win?<p>Not just in this case, but plenty of government contracts are sole-sourced. How does the price get decided when there's no competition?