Air Force certifies Elon Musk's SpaceX for military and spy satellite launches

The U.S. Air Force on Tuesday said it has certified privately held SpaceX to launch U.S. military and spy satellites, ending a monopoly held by United Launch Alliance, a joint venture of Lockheed Martin Corp and Boeing Co, since its creation in 2006.

The decision follows two years of discussions, reviews and legal disputes between the U.S. Air Force and Space Exploration Technologies, known as SpaceX, and means the company founded by entrepreneur Elon Musk, can compete for national security launches with its Falcon 9 rocket.

"SpaceX's emergence as a viable commercial launch provider provides the opportunity to compete launch services for the first time in almost a decade," Air Force Secretary Deborah James said in a statement.

Leveraging SpaceX's investment in an alternate launch vehicle would help drive down the cost and help improve the U.S. military's resiliency, James said.

SpaceX's first opportunity to compete against ULA would come in June, when the Air Force said it expects to kick off a competition for launches of additional Global Positioning System III satellites built by Lockheed.

The certification, initially expected last December, followed two years of intensive reviews by the Air Force and SpaceX, which already has won significant contracts with NASA to launch cargo and crews to the International Space Station.

The Air Force said it spent more than $60 million and dedicated 150 people to the effort, which included 2,800 discreet tasks, three certification flight demonstrations, 21 major subsystem reviews and 700 audits aimed at establishing a technical baseline for future flight worthiness determinations.

Musk called the decision "an important step toward bringing competition to national security space launch."

Senate Armed Services Committee Chairman John McCain said he hoped SpaceX's certification would bring down what he called "unjustifiably high" launch costs and end U.S. reliance on Russian-built RD-180 engines that power ULA's Atlas 5 rocket.

The U.S. Congress has banned the use of Russian engines for national security launches after 2019. It passed the law after Russia's annexation of Ukraine's Crimea region last year.

James called the news "an important milestone" for the Air Force and the Pentagon. An independent review in March cited a "stark disconnect" between the two sides about the purpose of the certification process, and said the Air Force's approach had stifled the very competition it was seeking to promote.

SpaceX had shocked Air Force officials when it filed a lawsuit in April 2014 to protest its decision to award 36 rocket launches to ULA while delaying competition for 14 contracts that were meant to be open to competition.

The company dropped its lawsuit in January after the two sides agreed to work collaboratively to wrap up the certification process.

(Reporting by Andrea Shalal; Edtiting by Leslie Adler, Diane Craft and Lisa Shumaker)