The headquarters of Space Systems Command in Los Angeles, California.
U.S. Space Force / Jose Lou Hernandez
The U.S. military is preparing to purchase one other round of rocket launches from corporations next 12 months, and Space Force leadership says they’re taking a latest “mutual fund approach” to the acquisition strategy.
“Versus picking a single stock, we pick two different approaches, because we thought that may best allow the federal government to pivot,” said Colonel Chad Melone, the chief of the U.S. Space Force‘s Space Systems Command’s Launch Procurement & Integration division, in a press briefing on Friday.
Earlier this month the Space Force kicked off the method to purchase five years value of launches, under a lucrative program referred to as National Security Space Launch Phase 3. In 2020, the second phase of NSSL awarded contracts to 2 corporations – Elon Musk’s SpaceX and United Launch Alliance, the three way partnership of Boeing and Lockheed Martin – for about 40 military missions, value about $1 billion per 12 months.
Source: Space X; Red Huber | Orlando Sentinel | TNS | Getty Images
But, with a lot of corporations bringing rockets to market, Space Force is splitting NSSL Phase 3 into two groups for about 70 launches. Lane 1 is the brand new tack, about 30 missions with lower requirements and a more flexible bidding process that permits corporations to compete for launches as rockets debut over the approaching years. Lane 2 represents the legacy approach, with the Space Force planning to pick out two corporations for about 40 missions which have probably the most demanding requirements.
“Several aspects have strongly influenced our strategy, most notably the ever growing business launch market, [and] the greater than 50% increase in national security space missions over what we had in Phase 2,” Colonel Doug Pentecost, the Space Systems Command’s deputy program executive officer, told press.
Join here to receive weekly editions of CNBC’s Investing in Space newsletter.
Space Force leadership named several corporations that may now compete within the dual-track process, including Rocket Lab, Relativity and ABL Space. Pentecost also noted that, a “couple months ago,” Space Systems Command signed a certification plan with Jeff Bezos’ Blue Origin for its Recent Glenn rocket, with the corporate aiming to prove it may well fly national security missions after three launches.
Pentecost emphasized the associated fee savings behind the competitive approach of shopping for launches. For probably the most powerful rockets, Pentecost said SpaceX’s Falcon Heavy and ULA’s Vulcan rockets “are about half the associated fee” of what the prior decade’s Delta IV Heavy rockets cost, savings of “almost 50%” for the military to place “the most important satellites into space.”
“We’re saving a ton of cash on the high end, while we’re still managing to utilize the commercialized prices on the low end,” Pentecost said.
Individually, Space Force is closely watching the growing demand for business launches. Melone said non-military satellite missions would must be “on the extremely high side” of current projections to limit Space Force’s plans, either through the supply of launch ranges or corporations’ production capability.
Already, corporations are hitting unprecedented annual launch rates. Space Force projects its Eastern Range in Florida will see 92 launches in 2023, up from 57 in 2022, and its Western Range in California can have 42 launches in 2023, up from 19.