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Acquisition of Space Force rocket launches follows “mutual fund approach”

by SuperiorInvest

Space Systems Command in Los Angeles, California.

US Space Force / Jose Lou Hernandez

The U.S. military is preparing to buy another round of rocket launches from companies next year, and space chiefs say they are taking a new “shared fund” approach to the acquisition strategy.

“As opposed to taking one stock, we’re taking two different approaches because we thought that would best allow the government to turn around,” said Col. Chad Melone, the bureau’s chief. US Space ForceSpace Systems Command’s launch acquisition and integration division at a news conference Friday.

Earlier this month, the space force began the process of buying five years’ worth of launches under a lucrative program known as National Security Space Launch Phase 3. In 2020 the second phase of NSSL awarded contracts to two companiesElon Musk SpaceX and United Launch Alliance, a joint venture Boeing and Lockheed Martin – for about 40 military missions worth about $1 billion a year.

Source: Space X; Red Huber | Orlando Sentinel | TNS | Getty Images

But with a number of companies launching rockets, Space Force is splitting NSSL Phase 3 into two groups for about 70 launches. Lane 1 is a new direction, about 30 missions with lower requirements and a more flexible bidding process that allows companies to compete for launches when rockets debut in the coming years. Lane 2 represents the older approach, with Space Force planning to select two companies for about 40 missions that have the most demanding requirements.

“Several factors have strongly influenced our strategy, especially the ever-growing commercial startup market, [and] more than a 50 percent increase in national security space missions over what we had in Phase 2,” Col. Doug Pentecost, Space Systems Command deputy program director, told the press.

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Space Force management has named several companies that can now compete in the dual-track process, including Rocket Lab, Relativity and ABL space. Pentecost also noted that “several months ago” Space Systems Command signed off on the certification plan Jeff Bezos Blue Origin for its New Glenn rocket, with the company aiming to prove it can fly national security missions after three launches.

Pentecost highlighted the cost savings behind a competitive approach to purchasing startups. For the most powerful rockets, Pentecost said SpaceX’s Falcon Heavy rockets and ULA’s Vulcan rockets “are about half” the cost of Delta IV Heavy rockets in the previous decade, meaning the military will save “almost 50%” to field “the largest satellites into space.”

“We’re saving a lot of money on the high end while still being able to take advantage of commercialized pricing on the low end,” Pentecost said.

Separately, Space Force is watching closely growing demand for commercial launch. Melone said non-military satellite missions would have to be “on the extremely high side” of current projections to limit Space Force plans, either by the availability of launchers or the companies’ production capacity.

Companies are already achieving an unprecedented annual pace to market. Space Force projects that its Eastern Range in Florida will see 92 launches in 2023, up from 57 in 2022, and its Western Range in California will see 42 launches in 2023, up from 19.

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