SpaceX Nabs its First-ever Government Launch Contract

I’ve been highlighting many of the “firsts” that the private sector has been scoring in the rapidly evolving commercial space/launch industry during the past four months. Chief among the innovative companies is Elon Musk’s Space Technologies Corp. (SpaceX). And, true to form, the nascent space launch concern has just scored its first military services contract – a huge boost of confidence in the company.

The U.S. Air Force has awarded the first competitively sourced National Security Space (NSS) launch services contract in more than a decade to SpaceX. The nascent launch services company received an $82.7 million contract for Global Positioning System (GPS) III launch services.

This is a firm-fixed price, standalone contract. SpaceX will provide the government with a total launch solution for the GPS III satellite, which includes launch vehicle production, mission integration, and launch operations and spaceflight certification.  The launch will be the second GPS III launch and is scheduled to launch from Cape Canaveral Air Force Station, Florida, in May 2018.

And while there aren’t any direct investment plays for us (yet), it is important to pay attention to the private side of the space business as there certainly will be opportunities to profit from some of these companies when (not if) they go public. For now, wait-and-see is our best play as we cheer on the forward progress in this market.

GPS III is the next generation of GPS satellites that will introduce new capabilities to meet the higher demands of both military and civilian users. The satellite is expected to provide improved anti-jamming capabilities as well as improved accuracy for precision navigation and timing. GPS III will incorporate the common L1C signal, which is compatible with the European Space Agency’s Galileo global navigation satellite system and compliment current services with the addition of new civil and military signals.

GPS Satelitte III

Artistic Rendition of a GPS III Satellite

This is the first of nine competitive launch services planned in the FY 2016 President’s Budget Request under the current Phase 1A procurement strategy, which covers awards with FY 2015-2018 funding. The next solicitation for launch services will be for a second GPS III satellite. This award marks a milestone in the Air Force’s ongoing efforts to reintroduce a competitive procurement environment into the Evolved Expendable Launch Vehicle (EELV) program as directed by Frank Kendall, Under Secretary of Defense for Acquisition, Technology and Logistics.

The Phase 1A procurement strategy reintroduces competition for national security space launch services. Under the Phase 1 strategy, United Launch Alliance (ULA) was the only certified launch provider. In 2013, ULA was awarded a sole-source contract for launch services as part of an Air Force “block buy” of 36 rocket cores that resulted in significant savings for the government through FY 2017.

In May 2015, SpaceX was certified for EELV launches resulting in two launch service providers that are capable to design, produce, qualify and deliver a launch capability and provide the mission assurance support required to deliver national security space satellites to orbit. The certified baseline configuration of SpaceX’s Falcon 9 Launch System to Falcon 9 Upgrade was recently updated for use in National Security Space (NSS) missions.

The Air Force Space Command’s Space and Missile Systems Center, located at the Los Angeles Air Force Base, Calif., is the U.S. Air Force’s center of excellence for acquiring and developing military space systems.

According to Lieutenant General Samuel Greaves, the US Air Force Program Executive Officer for Space as well as the SMC Commander, this launch services contract award achieves a balance between mission success all the while meeting operational needs and lowering costs as well as reintroducing competition for NSS missions.

Onward and Upward,

David Bross
for The Daily Reckoning

P.S. While I continue to watch developments in the commercial space market, I’m also keeping my eyes trained on the booming virtual reality (VR) business. If you want to see one of the key applications that is sure to help drive VR to new heights, take a look at these “saucy” images that are definitely NSFW (not suitable for work). Click here to see a brief video clip of what I’m talking about and why it’s going to help grow VR overall.