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The USSF-67 mission Falcon Heavy launched on January 15, 2023 from NASA’s Kennedy Space Center in Florida.
SpaceX
The US military is raising the stakes – and expanding the field – in the high-profile competition for Space Force mission contracts.
The Space Force plans to purchase more rocket launches from companies in the coming years than previously expected, giving more companies a chance to secure billions in potential contracts.
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“This is a huge deal,” Col. Doug Pentecost, deputy program executive officer at the US Space Force’s Space Systems Command, told reporters during a briefing this week.
Earlier this year, the Space Force began the process of purchasing five years’ worth of launches, under a lucrative program known as National Security Space Launch (NSSL) Phase III.
The United States sees increasing momentum to improve its military capabilities in space, spurring the need to nearly triple the number of Phase 3 launches it has purchased in Phase 2 in 2020.
“It just amazes me,” said Pentecost. “We only estimated 36 missions for Phase 2. For Phase 3, we estimate 90 missions.”
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In February, the Space Force outlined a “mutual fund” strategy to purchase launches from companies. NSSL divided Stage 3 into two groups. Track 1 is the new approach, with lower requirements and a more flexible bidding process that allows companies to compete as rockets debut over the coming years. Path 2 represents the current approach, in which the Space Force plans to select a select number of companies for missions that meet the most demanding requirements.
Pentecost said the Space Force hosted an industry day in February to review details of the program and 22 companies attended. Since then, Space Force has made a number of tweaks to Phase 3. It has added more missions, introduced a price cap, expanded Path 2, and established an annual schedule of missions.
The government weighs bids according to the company’s “gross estimated price” for each launch. This is broken down into “launch service,” which means the cost of building and launching a missile, and “launch service support,” which covers special requirements the military might have for a launch. The maximum launch service subsidy amount is $100 million per year, per company.
Pentecost said, “We’ve implemented some cost constraints so we don’t get inflated. We don’t want (a situation) where everyone gets a task—you get a task, you get a task, you get a task—because there’s no real competition at that time.”
“We believe all of our partners in the industry want to be the first man, so we think that will provide competitive pricing to keep our costs down,” he added.
Lane expansion 2
While track 1 is expected to attract the most bids and award 30 missions, track 2 is the big show.
With Lane 2, the Space Force awards the most valuable contracts to launch national security satellites at the highest stakes.
“These are a billion-dollar (satellite) payload that goes into unique orbits,” Pentecost said.
Not only has Lynn 2 seen an increase in the number of missions available for grabs — it’s currently estimated at 58 launches, up from 39 in February — but Space Force also made the decision to expand the slots available for final prizes to three companies, rather than limiting them to two.
Space Force will allocate 60% and 40% of the 51 missions to the two largest bidders, respectively, and the remaining seven launches will go to the third-place bidder.
Regardless of where a company ranks, it must demonstrate that it can meet all of the requirements of Track 2, which include having launch sites on both the East Coast and the West Coast, and the ability to reach nine high-accuracy “reference” orbits, many of which are much farther from Earth than the LEO requirements of Track 1.
Asked by CNBC how many companies are developing missiles that can meet these requirements by the launch deadline, a Space Force spokesperson declined to specify, saying the Army is “tracking several” that are “expanding their launch capabilities into most of these orbits.”
“Hopefully, this competition isn’t limited to ULA, SpaceX, and Blue Origin, since there are others that have had interest in messaging in the past,” Col. Chad Mellon, chief of procurement and integration for Space Systems Command, said during the briefing.
Supply insurance
The Space Force offers an annual deadline of October 1st to assign missions to companies that have won a contract.
Pentecost made it clear that the first missions are ready to be taken over in October 2025, but the contracts referred to do not guarantee assignments, which protects the Space Force from delays that companies may experience in developing and flying missiles.
“You could have won the contract,” Pentecost said, “and you’d have this great plan of how you’re going to fly by (fiscal year) 2027. But since you haven’t flown yet, and I have a satellite that needs to be flown in two years, we’re not going to give you that job — we’ll pass it on to the other person,” Pentecost said.
Space Force aims to finish its solicitation for bidders by September and then submit all proposals by December, with contracts awarded in October 2024.
The main driver for this push, Space Force officials said, is “capacity assurance,” since there are “a lot of other companies” trying to buy satellite launches and the Space Force needs to close their orders.
“We wanted to make sure that we basically hedged against the scarcity of launches that could happen because if there’s ever too much demand and everyone is (buying), prices can be too high,” Mellon said.
But despite that fear, Pentecost said that 2026 “looks like the sweet spot” when a number of the companies’ rockets will be developed and ready to fly. And the companies that stay on the right track will have the upper hand in the third phase of the NSSL.
“If you fly before then, or if your schedule shows you will fly before then, you will have significant strengths, which will put you in a better position to win the best provider or second best in this competition,” said Pentecost.
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