Space Force heightens competition in the NSSL race for military launches

The U.S. military is elevating the stakes and expanding the competition for Space Force mission contracts.

The Space Force intends to increase the number of rocket launches purchased from companies in the coming years, providing more opportunities for companies to secure lucrative contracts worth billions.

“This is a significant development,” said Col. Doug Pentecost, Deputy Program Executive Officer of the U.S. Space Force’s Space Systems Command, during a recent briefing.

Earlier this year, the Space Force initiated the process to buy five years’ worth of launches through the National Security Space Launch (NSSL) Phase 3 program. Now, the scale is being expanded.

The U.S. recognizes the need to enhance its military capabilities in space, resulting in an estimated tripling of the number of launches in Phase 3 compared to Phase 2 in 2020.

“That is truly mind-blowing,” Pentecost remarked. “We had initially estimated 36 missions in Phase 2. For Phase 3, we’re now estimating 90 missions.”

In February, the Space Force introduced a “mutual fund” strategy for purchasing launches from companies. It divided NSSL Phase 3 into two groups: Lane 1 and Lane 2. Lane 1 represents a new approach with lower requirements and a flexible bidding process that allows companies to compete as their rockets debut over the next few years. Lane 2 represents the existing approach, where the Space Force selects a limited number of companies for missions that meet the most demanding requirements.

Space Force held an industry day in February to discuss the program’s details, attracting 22 companies. Since then, Space Force has made several adjustments to Phase 3, including adding more missions, introducing a price cap, expanding Lane 2, and establishing an annual schedule for mission assignments.

The government evaluates bids based on a company’s “Total Evaluated Price” per launch, which includes the cost of building and launching a rocket (Launch Service) and any special support requirements from the military (Launch Service Support). The Launch Service Support amount is capped at $100 million per year per company.

“We have implemented cost-constraining measures to prevent an imbalance. We don’t want a scenario where every company gets a mission, resulting in no real competition,” Pentecost explained.

“We believe that all our industry partners strive to be the top competitor, which we believe will drive competitive pricing and keep costs down,” Pentecost added.

Lane 1 is expected to attract the largest number of bids and award 30 missions, but Lane 2 is where the most valuable contracts for launching national security satellites with high stakes are awarded.

“These are the ones carrying billion-dollar payloads to unique orbits,” Pentecost noted.

Lane 2 has not only increased the number of available missions to 58, up from 39 in February, but Space Force has also expanded the number of slots for awards to three companies instead of two.

Elon Musk’s SpaceX and United Launch Alliance (a joint venture of Boeing and Lockheed Martin) were initially considered the leading contenders for Lane 2, but now there is an opportunity for another company like Jeff Bezos’ Blue Origin to enter the competition.

Space Force will allocate 60% and 40% of the 51 missions to the top two bidders, respectively, and the remaining seven launches will go to the third-place bidder.

Regardless of their ranking, companies must demonstrate the ability to meet all Lane 2 requirements, including having launch sites on both the east and west coasts, and the capability to accurately reach nine “reference” orbits—some of which are much further from Earth than the low Earth orbit requirement of Lane 1.

When asked about the number of companies developing rockets to meet these requirements by the deadline for launches, a Space Force spokesperson declined to provide an exact figure but stated that the military is aware of several companies expanding their launch capabilities into these orbits.

“We hope that it won’t be just ULA, SpaceX, and Blue Origin competing for Lane 2, as there are others who have expressed interest in the past,” said Col. Chad Melone, Chief of Launch Procurement and Integration at Space Systems Command, during the briefing.