Now spacex is starting to compete, costs will come down. Is something not going as expected?
ULA used all of their political connections to keep SpaceX out of the government launch as long as they could, to maintain their monopoly pricing.
So Congress told them to form ULA and they would give them a readiness contract to make it worth it to them even if they weren't launching often. Basically, it was that or lose the heavy launch capability which would have been a huge national security problem.
Obviously, that changes with SpaceX around, but what hasn't changed is that if Congress pulls that contract, they'll just kill ULA and the Delta and Atlas will be gone. Lockheed and Boeing still don't really want to be in this business and there is nothing they can do to make Atlas price competitive with Falcon, since their customer won't let them change anything.
Add to that the real money is in the satellites themselves. If you were a big company like Lockheed it made far more sense to stick to building sats and buying launch services from someone else.
>Obviously, that changes with SpaceX around, but what hasn't changed is that if Congress pulls that contract, they'll just kill ULA and the Delta and Atlas will be gone.
Congress will probably allow Delta to die, but they're not going to be 100% dependent on Falcon. All it takes is a failed launch and nothing goes up for six months while investigators figure out what happened.
Probably not before there's another launch provider with reusable rockets (Looking your way Blue Origin/New Glenn)
Also if the launch savings exceed the total payload costs, in a pinch couldn't they just roll the dice given falcon's success %?
(The last falcon investigation delay was only ~4 months)
They could have done something like the COTS program for rockets.
NASA paid cost-plus to ULA and the ilk initially (think 60's -90s) mainly because rocketry was a very new field and it was near impossible to reliably estimate the final cost the manufacturer would incur in fulfilling the contract, so NASA just said "spend whatever you want and we'll pay your spend plus 6%".
However it's well known now how much researching and building rockets costs, so cost-plus contracts are, essentially a very bad contract cost model. It's mainly because ULA and such have become _far_ too comfortable on their half-a-century monopoly and simply don't want their scam to end.