- Space Force plans to buy even more rocket launches from companies in the coming years than previously anticipated.
- The US is seeing a growing urge to improve its military capabilities in space, fueling the need to nearly triple launches over a five-year period from the prior period.
- Elon Musk’s SpaceX and United Launch Alliance, the joint venture between Boeing and Lockheed Martin, were thought to be the two main candidates for Lane 2, but now a door is open for another company like Jeff Bezos’ Blue Origin.
A Falcon Heavy rocket launches the USSF-67 mission January 15, 2023 from NASA’s Kennedy Space Center in Florida.
SpaceX
The US military is raising the stakes – and broadening the field – in a high-profile competition for Space Force mission contracts.
The Space Force plans to buy even more rocket launches from companies in the coming years than previously anticipated, giving more companies a chance to secure potential billion-dollar deals.
“This is a huge deal,” Col. Doug Pentecost, deputy program director for the US Space Force’s Space Systems Command, told reporters during a briefing this week.
Earlier this year, the Space Force began buying five-year launches as part of a lucrative program called National Security Space Launch (NSSL) Phase 3. Now the scope is expanded.
The US is seeing increasing momentum to upgrade its military capabilities in space, fueling the need to nearly triple the number of Phase 3 launches it purchased in Phase 2 in 2020.
“This just blows my mind,” Pentecost said. “We had only estimated 36 missions in phase 2. For phase 3 we are assuming 90 missions.”
In February, Space Force outlined a “mutual fund” strategy to buy launch vehicles from companies. It divided NSSL Phase 3 into two groups. Gauge 1 is the new approach, with lower requirements and a more flexible bidding process, allowing companies to compete in rocket debuts for years to come. Lane 2 represents the existing approach, with the Space Force planning to select a set number of companies for missions that meet the most demanding requirements.
Pentecost said Space Force hosted an industry day in February to discuss the details of the program and 22 companies were in attendance. Since then, Space Force has made a number of adjustments to Phase 3. Added more missions, introduced a price cap, expanded Lane 2, and set an annual schedule for mission assignments.
The government weights bids based on a company’s “total appraisal price” per launch. This is divided into “Launch Service”, i.e. how much it costs to build and launch a rocket, and “Launch Service Support”, which covers special needs of the military for the launch. Launch Service Support amount is capped at $100 million per year per organization.
“We’ve implemented some cost-constraining tools so we don’t blow up. We don’t want that.” [a situation where] Everyone gets a mission — you get a mission, you get a mission, you get a mission — because then there’s no real competition,” Pentecost said.
“We believe all of our industry partners want to be number one, so we believe this will result in competitive pricing to keep our costs down,” added Pentecost.
While Lane 1 is expected to receive the most bids and 30 orders, Lane 2 is the big show.
With Lane 2, Space Force awards the most valuable contracts to launch national security satellites with the highest stakes.
“These are the ones that cost a billion dollars [satellite] “Payload goes into unique orbits,” Pentecost said.
At Lane 2, not only has the number of missions up for grabs increased – it’s currently estimated at 58 launches, up from 39 in February – but Space Force has decided to expand the available slots for eventual awards to three companies, rather than being limited to two.
Elon Musk’s SpaceX and United Launch Alliance, the joint venture between Boeing and Lockheed Martin, were thought to be the two main candidates for Lane 2, but now a door is open for another company like Jeff Bezos’ Blue Origin.
Space Force will award 60% and 40% of the 51 missions to the top two bidders, respectively, and the remaining seven launches to the third-place bidder.
Regardless of where a company ranks, it must demonstrate that it can meet all of the Lane 2 requirements. These include launch sites on both the east and west coasts, as well as the ability to achieve nine high-accuracy “reference” orbits, some of which are much further from Earth than Lane 1’s low-earth orbit requirements.
When asked by CNBC how many companies are developing rockets that can meet these requirements by the launch deadline, a Space Force spokesman declined to comment, saying the military is pursuing “several” that will “expand their launch capabilities to most of these orbits.”
“We hope that not only will ULA, SpaceX and Blue Origin compete for it, but others who have expressed interest in the past,” said Col. Chad Melone, Space Systems Command’s chief of launch procurement and integration, during the briefing.
Space Force introduces an annual October 1 deadline for awarding missions to companies that have been awarded a contract.
Pentecost explained that the first orders will be awarded in October 2025, but said contracts do not guarantee orders, which protects the Space Force from delays that companies could suffer in the development and flight of rockets.
“You could have actually won the job if you had this great plan on how to fly ahead.” [fiscal year] 2027. But since you’re not flying yet and I have a satellite that needs to fly in two years, we’re not going to give you that mission — we’re going to give it to the other,” Pentecost said.
The Space Force aims to complete its tender by September and then submit all proposals by December, with contracts then awarded in October 2024.
Space Force officials said a key driver of this push is “guaranteed capacity” as “a lot of other companies” are trying to buy launches for satellites and the Space Force has to lock down their orders.
“We wanted to make sure that we were essentially hedging against the launch shortage that could occur if there is a very high demand for launches and everyone is [buying]”Prices could be very high,” Melone said.
But despite these fears, Pentecost said that 2026 “appears to be the ideal time” when a number of companies’ rockets will be fully developed and ready to fly. And companies that stay the course will have the upper hand in NSSL Phase 3.
“If you fly before, or if your schedule indicates you will fly before, you will gain significant strengths that put you in a better position to win the top or second best bidder in this competition,” Pentecost said.