- The U.S. Space Force is set to increase its rocket launches procurement, opening a lucrative multi-billion-dollar opportunity for more companies.
- The new "mutual fund" strategy for purchasing launches introduces a flexible bidding process and stringent requirements to ensure fair competition.
- Expansion of the valuable Lane 2 opens the door for other space companies, with the ability to meet high standards being a prerequisite for participation.
The U.S. military is raising the ante and expanding the battlefield in a high-stakes competition for Space Force mission contracts. The U.S. Space Force plans to ramp up its purchase of rocket launches from various companies in the forthcoming years, more than what was originally anticipated. This opens the door for more corporations to vie for a piece of the lucrative multi-billion-dollar contracts.
"This is a seismic shift," shared Col. Doug Pentecost, Deputy Program Executive Officer of the U.S. Space Force's Space Systems Command during a recent media briefing. Earlier in the year, the Space Force initiated the process of purchasing five years’ worth of launches, under a prosperous initiative known as National Security Space Launch (NSSL) Phase 3. Now, they're taking it up a notch, almost tripling the number of launches in Phase 3 compared to those procured in Phase 2 in 2020, due to the growing impetus to strengthen U.S. military prowess in space.
The U.S. Space Force has cleverly deployed a "mutual fund" strategy in its approach to purchasing launches, splitting NSSL Phase 3 into two lanes. Lane 1, the new kid on the block, comes with less stringent requirements and a more pliable bidding process, enabling a wide range of companies to compete as their rockets make their debut over the coming years. Meanwhile, Lane 2 adheres to the existing approach, with the Space Force earmarking a specific number of companies for missions that meet the highest requirements.
In February, the Space Force hosted an "industry day", inviting 22 companies to discuss the program's details. This engagement led to numerous adjustments to Phase 3. These included the addition of more missions, introduction of a price cap, expansion of Lane 2, and the establishment of an annual schedule for mission assignments. This ensures fair competition while keeping costs in check.
Lane 2, expected to award 30 missions, is where the most valuable contracts are handed out for launching national security satellites with the highest stakes. It has seen an increase in missions up for grabs and has even expanded its award slots to three companies, providing an opportunity for other companies like Jeff Bezos' Blue Origin. No matter the company's ranking, it must demonstrate the ability to meet all of Lane 2's requirements, including having launch sites on both coasts and the ability to accurately reach nine different "reference" orbits.
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