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Space X lawsuit grounds Russian rocket engine buys

Company charges deal locks out competition, violates U.S. sanctions on Russia

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A federal judge has granted an injunction that keeps a Boeing-Lockheed Martin joint venture from procuring Russian-made rocket engines used in some U.S. military satellite launches.

The ruling in U.S. Federal Claims Court this week came in response to a recent lawsuit by Space Exploration Technologies Corp. that charges that the deal locks out commercial competition and violates U.S. sanctions against Russia over its aggression in Ukraine.

SpaceX, which is headed by billionaire Elon Musk, filed the case to muscle its way into the multi-billion dollar satellite launch contract business, currently held by Lockheed Martin and Boeing through their joint venture called the United Launch Alliance.

According to the company's complaint, the Air Force's current arrangement — a deal worth up to $70 billion — has led to "murky contracts, reliance on Russian suppliers and spiraling costs."

The United Launch Alliance deal also may result in money flowing to Russian individuals who have been sanctioned by the U.S. over the Kremlin's seizure of Ukraine's Crimea province, according to SpaceX.

The company said in court papers that the majority of launches use a RD-180 rocket engine made a company "owned and controlled" by the Russian government, whose space and defense industries are lead by Dmitry Rogozin, deputy prime minister of Russia.

Mr. Rogozin was placed on the U.S. sanctions list last month by President Obama

A spokesman for the Air Force, which is being sued by SpaceX, did not respond to phone or email messages seeking comment on the lawsuit.

But Kevin G. MacCary, United Launch Alliance's general counsel, said Thursday that the company was "deeply concerned" with the court's ruling, adding "we will work closely with the Department of Justice to resolve the injunction expeditiously."

"In the meantime, ULA will continue to demonstrate our commitment to our National Security on the launch pad by assuring the safe delivery of the missions we are honored to support," he said.

After the suit was filed, United Launch Alliance issued an earlier statement saying it was the only government-certified launch provider capable of meeting requirements "critical to supporting our troops and keeping our country safe."

The company said the block purchase of launches saved about $4 billion for taxpayers.

But SpaceX said in court papers that the Air Force award of three dozen launch vehicles from the Boeing-Lockheed joint venture locked out competition "for years to come."

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