Musk to Pentagon: SpaceX ‘Missed the Mark’ on a Launch Bid

(Bloomberg) -- Billionaire Elon Musk confided to Acting Defense Secretary Patrick Shanahan late last year that his SpaceX lost the competition for a military satellite launch because it “had written a poor proposal that ‘missed the mark,”’ according to the Pentagon’s inspector general.

That candid anecdote was included in the watchdog office’s report this week that cleared Shanahan of allegations that he violated ethics standards by promoting his former employer, Boeing Co.

Space Exploration Technologies Corp. came up in the report because it competes for military launches with a joint venture of Boeing and Lockheed Martin Corp.

In the Dec. 6 meeting, Acting Inspector General Glenn Fine wrote, Musk also discussed “increased competition from China, his plans to self-fund and launch communication satellites and his production experience” at Tesla Inc., the manufacturer of electric vehicles that he also heads.

SpaceX spokesman James Gleeson said he had no comment on the Musk remarks recounted in the report. The entrepreneur’s meeting with Shanahan came to light because Air Force Secretary Heather Wilson told Fine’s investigators that she expressed concern about Shanahan taking part in the meeting because of SpaceX’s competition with the Boeing-Lockheed venture, the United Launch Alliance.

Read more: Air Force’s Wilson Broke Ranks Over Boeing-Shanahan Concerns

Before the meeting, Shanahan cleared his participation with Pentagon attorneys who specialize in standards of conduct. The inspector general concluded the meeting wasn’t a violation of his ethics agreement to steer clear of matters involving Boeing. Musk’s remarks were captured in a memo for the record prepared by a Shanahan aide.

Despite the contract loss described without elaboration in the inspector general’s report, SpaceX has won nine awards in competition with United Launch Alliance since it was certified in 2015 for national security launches, including three in February. In December it launched the U.S.’s first next-generation GPS III satellite.

Before winning approval to compete for military launches, Musk campaigned fervently before Congress and in the courts against what he called the Boeing-Lockheed monopoly.

©2019 Bloomberg L.P.