Jeff Bezos and Elon Musk’s companies to compete for $5.6 billion US Space Force contracts

News, US June 16, 2024 , by IRIA No Comments

The U.S. Space Force has chosen Jeff Bezos’ Blue Origin and Elon Musk’s SpaceX alongside the United Launch Alliance (ULA) to compete for multiple launch missions worth up to $5.6 billion over the next five years.

The decision marks a pivotal shift in the landscape of space launch services, opening the door for new players in a market historically dominated by SpaceX and ULA.

The latest $5.6 billion launch contracts are part of the National Security Space Launch (NSSL) Phase 3, a multibillion-dollar project to launch some of the country’s most sensitive military and intelligence satellites into space for roughly the next decade. Since 2020, SpaceX and United Launch Alliance (ULA) have been the Pentagon’s primary rocket launch providers under the previous Phase 2 program.

For the NSSL Phase 3, the Pentagon has introduced a new strategy of a dual-lane approach to launch service acquisition. Lane 1 is for commercial-like missions and is geared toward new providers and Lane 2 is reserved for firms whose rockets meet more stringent security and performance requirements. The contracts announced on June 13 are for Lane 1.

Assistant Secretary of the Air Force for Space Acquisition and Integration Frank Calvelli emphasized the importance of the dual-lane strategy during his statement as he announced the three shortlisted companies.

SpaceX Starship Rocket — *^{SpaceX fully stacked Starship rocket ahead of its flight test from Starbase. (Image Credit: Twitter/@elonmusk)}*

“Today marks the beginning of this innovative, dual-lane approach to launch service acquisition, whereby Lane 1 serves our commercial-like missions that can accept more risk and Lane 2 provides our traditional, full mission assurance for the most stressing heavy-lift launches of our most risk-averse missions,” Celvelli said.

ULA and SpaceX were already part of the National Security Space Launch (NSSL) program in Phase 2, whereas Blue Origin is a newcomer. Since 2020, SpaceX and ULA have been the Pentagon’s primary rocket launch providers under the Phase 2 program, with ULA securing 60% of all Pentagon missions through 2027, and SpaceX receiving the remaining 40%. ULA once held a near-monopoly over space launches, but SpaceX has recently emerged as the dominant force in the market, accounting for 90% of U.S. launches in 2023.

Blue Origin’s market entry

The announcement marks Blue Origin’s entry into a competitive arena as it aims to launch its New Glenn rocket and compete with SpaceX, with the first orbital flight expected later this year. Blue Origin has been working diligently for several years to establish itself as a reliable player in the space launch sector.

This new contract awards Blue Origin $5 million for an initial capabilities assessment, providing a significant boost as Jeff Bezos’ space company joins SpaceX and ULA, both of which received $1.5 million each for risk reduction and security measures.

Brig. Gen. Kirstin Panzenhagen, Space Systems Command’s program executive officer for assured access to space, highlighted the future potential for increased competition: “As we anticipated, the pool of awardees is small this year because many companies are still maturing their launch capabilities. Our strategy accounted for this by allowing on-ramp opportunities every year, and we expect increasing competition and diversity as new providers and systems complete development.”

The next opportunity for companies to join the contract pool will be in the fall of 2025, ensuring that as more firms achieve the necessary qualifications, they can compete for these lucrative contracts.