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Space Force awards ULA, SpaceX contracts for four national security missions

WASHINGTON — The U.S. Space Force awarded United Launch Alliance and SpaceX contracts for four National Security Space Launch Phase 2 missions scheduled for 2023, the Pentagon announced March 9.

ULA received $224. 2 million for two missions named USSF-112 and USSF-87.  SpaceX got $159.7 million for USSF-36 and NROL-69.

ULA and SpaceX were selected in August as the two launch providers for Phase 2 of the National Security Space Launch program. ULA won 60% and SpaceX 40% of the estimated 30 to 35 launches projected between 2022 and 2027. The contracts are fixed-price and awarded on a yearly basis based on demand. NSSL launches include Defense Department and National Reconnaissance Office missions.

The Space Force in August awarded the first three missions of Phase 2 scheduled to launch in 2022.

ULA got $337 million to launch two missions and SpaceX received $316 million contract for one mission. SpaceX explained the large price tag included expenses for infrastructure and development of technologies required for national security launches. 

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SpaceX explains why the U.S. Space Force is paying $316 million for a single launch

WASHINGTON — When the U.S. Air Force announced Aug. 7 that SpaceX received a $316 million contract to launch a National Reconnaissance Office satellite in fiscal year 2022, many were surprised by the large price tag.

SpaceX President and Chief Operating Officer Gwynne Shotwell on Nov. 9 explained that the contract pays for launch services but also covers expenses for infrastructure and other items required for national security launches. 

“The launch was not that expensive,” Shotwell said during a panel discussion at the virtual World Satellite Business Week conference hosted by Euroconsult.

The $316 million contract was the first awarded to SpaceX under the National Security Space Launch Phase 2 launch service procurement. The other provider selected in this program, United Launch Alliance, was awarded $337 million to launch two missions comparable to the one awarded to SpaceX. 

This raised eyebrows because SpaceX’s previous national security launch bids were priced much lower than ULA’s. A recent Falcon Heavy launch contract SpaceX won from NASA, for example, was $117 million. In the first Phase 2 award, ULA is launching two missions almost for the price of one SpaceX mission. 

But Shotwell insisted the company’s launch prices are not going up. SpaceX is however charging the government for the cost of an extended payload fairing, upgrades to the company’s West Coast launch pad at Vandenberg Air Force in California, and a vertical integration facility required for NRO missions. 

The price “reflects mostly the infrastructure,” Shotwell said. 

Shotwell noted that the Aug. 7 contract does not completely cover all infrastructure expenses and other costs will be included in future Phase 2 bids.  

“This one was front loaded because the Space Force wanted this capability deployed quickly,” said Shotwell.

Speaking during the WSBW panel, ULA CEO Tory Bruno said the Phase 2 awards are proof of “how price competitive we were.” He said Phase 2 launch bids are fixed-price and do not include development costs. 

But SpaceX added development costs into its bid, said Shotwell, because the company never received funding for infrastructure and development that its competitors got. The Air Force in 2018 awarded ULA and other launch companies competing for Phase 2 contracts billions of dollars for the development of vehicles and for infrastructure. SpaceX did not win a Launch Service Agreement (LSA) development contract and sued the Air Force in response. A California judge dismissed the lawsuit last month.

ULA received a $967 million LSA contract. Shotwell said that has to be included in the equation “to get a complete look at what the Space Force is investing in the launch industry in the United States.”

Those LSA awards were “to help get the U.S. launch providers to be competitive for Phase 2,” Shotwell said. “We did not win that, so all the money that we needed to spend we needed to put into our Phase 2 award. And we were happy that we were still competitive.”

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DoD watchdog: There’s nothing wrong with how Air Force certifies new launch vehicles

WASHINGTON — The Defense Department’s inspector general conducted a nearly year-long investigation into the processes used by the U.S. Air Force to certify that rockets are safe and reliable to launch government satellites.

The IG review that began in February 2019 specifically looked at whether the Air Force complied with its own guidelines and policies when it certified SpaceX’s rockets to launch national security payloads.

The final report on the investigation was released Sept. 9 by Randolph Stone, assistant IG for evaluations for space, intelligence, engineering and oversight.

The heavily redacted report says the agency responsible for launch vehicle certification, the Space and Missile Systems Center, fully complied with the Air Force’s New Entrant Certification Guide (NECG) when it certified the SpaceX Falcon family of launch vehicles.

It was never disclosed why the DoD watchdog agency began this review. In general, IG investigations are triggered by whistleblower complaints or directed by a member of Congress.

The IG’s evaluation of SMC’s processes for validating rockets for national security launch was completed in December 2019. Along the way, the probe was expanded after three other space launch providers’ new entrant launch vehicles were submitted for certification as competitors in the National Security Space Launch Phase 2 procurement competition.

Northrop Grumman’s OmegA, United Launch Alliance’s Vulcan Centaur, and Blue Origin’s New Glenn were undergoing certification processes as the IG review was in progress. The IG said those processes were all in compliance with the NECG. The Air Force last month selected ULA and SpaceX as the winners of the Phase 2 procurement.

Concerns about GPS 3 launch, reused hardware

Although the IG in the final report found no faults with SMC’s certification process, it did flag some issues in an earlier draft report. The Air Force in a July 22, 2020, letter pushed back on the findings of the draft report and submitted documentation that contradicted the IG’s assessment. As a result, the IG in the final report opted to not recommend any changes to SMC’s reviews and processes.

The two main concerns the IG raised in the draft report were the following:

  • The IG suggested that in order to meet launch schedules, SMC was limiting the time to conduct independent verification and validation of a provider’s launch vehicle. The IG criticized SMC for rushing to declare SpaceX’s Falcon 9 ready to fly a GPS 3 satellite in December 2018 without allowing sufficient time to validate the company’s data.
  • The IG questioned SMC’s processes to assess the risk of allowing the use of previously flown launch vehicle components. The report points out that SMC did not establish standards for assessing the reliability of reusable launch vehicle components until March 2019.

After the draft report was sent to the Air Force, the director of SMC’s launch enterprise Col. Robert Bongiovi submitted “additional documentation which SMC did not provide us during the evaluation,” the IG said. After reviewing those documents, the IG removed recommendations to address those two issues it had flagged in the draft report.

Bongiovi in the July 22 letter insisted that no unnecessary risk was taken with the GPS 3 launch and challenged the IG’s assumption that schedule was more important than mission assurance.

On the question of whether the Air Force has procedures to certify SpaceX’s previously flown boosters or other hardware for NSSL missions, Bongiovi said this was addressed in preparation for the Phase 2 selection of launch providers. The Air Force developed technical guidance and processes for safe hardware reuse, Bongiovi wrote: ”The Launch Enterprise embraced reusability and explicitly enabled it as part of the ongoing Phase 2 competition.”

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Space Force: Too early to say if military will need ‘super heavy’ launch vehicles

WASHINGTON — The launch vehicles the U.S. Space Force selected last month to fly its satellites — United Launch Alliance’s Vulcan Centaur, and SpaceX’s Falcon 9 and Falcon Heavy — meet the national security needs for the foreseeable future, said Brig. Gen. D. Jason Cothern, who oversees launch services procurement for the U.S. Space Force.

“We are super excited about the future of space launch,” Cothern, the vice commander of the Space and Missile Systems Center, said Sept. 8 during a virtual forum hosted by the RAND Corp.

Cothern however would not speculate on whether the Space Force might one day have a need for the super heavy reusable launchers like SpaceX’s Starship or Blue Origin’s New Glenn.

“We believe the current providers address the plans we have today for the near future,” Cothern said in response to a viewer’s question on the potential military value of super heavy-lift vehicles like Starship and New Glenn that are being developed to fly to the moon and beyond.

SMC is focused on ensuring “100 percent mission success” and is looking forward to working with ULA and SpaceX in Phase 2 of the National Security Space Launch program, said Cothern. As to what might be required in the next generation of launch vehicles, “as the lead acquirers for military space, it’s a question that’s dear to us,” he said.

What type of launch vehicles will be needed “depends on the threats,” said Cothern. “We start with requirements and architectures, understanding the threats and determining what the requirements and architectures are to meet those threats.”

The RAND forum included a panel discussion centered around the company’s space launch market study. The study’s recommendations have stirred a continuing debate about the role of the U.S. military in shaping the future of the launch industry.

Bonnie Triezenberg, a RAND senior engineer and lead author of the study, argued that the Air Force made the right decision selecting two providers for the Phase 2 launch procurement, but should also consider supporting additional companies to bolster the U.S. industrial base.

Cothern said the Space Force has no plans to financially support launch providers outside of the two winners of Phase 2. If Northrop Grumman and Blue Origin want to have their new vehicles certified for national security launch, they will have to fund the cost, he said. “We’ll continue to work with any of the non-selected Phase 2 launch service providers that choose to continue with the launch vehicle certification efforts at their expense.”

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ULA to launch Delta 4 Heavy for its 12th mission, four more to go before rocket is retired

WASHINGTON — A Delta 4 Heavy rocket is scheduled to launch a classified mission for the National Reconnaissance Office Aug. 26 from Cape Canaveral Air Force Station, Florida.

NROL-44 will be the 41st launch of United Launch Alliance’s Delta 4 rocket, and the 12th in the heavy configuration. ULA said Aug. 24 that the vehicle passed a launch readiness review and is on track for a 2:16 a.m. liftoff on Wednesday.

NROL-44 is the first of the final five missions to be flown by the Delta 4 Heavy between now and 2024 when ULA intends to retire the three-core rocket.

The next four missions are NROL-82, NROL-91, NROL-68 and NROL-70.

NROL-82 is planned to launch from Vandenberg Air Force Base, California, later this year.

NRO heavy missions are schoolbus-size satellites and are considered the most complex and expensive missions flown by the U.S. government.

ULA received contracts in 2017 to launch NROL-44 and NROL-82. In 2018 it was awarded NROL-91, NROL-68 and NROL-70 — projected to launch in fiscal years 2022 2023 and 2024.

The Air Force and the NRO paid ULA about $2.2 billion for final five Delta 4 Heavy missions. The Air Force announced in September it had negotiated the closeout Delta 4 Heavy contracts and that the vehicle would be retired in fiscal year 2024.

The final five launches were sole-sourced to ULA, the Air Force said, because the Delta 4 Heavy was the only rocket that could meet the NRO’s payload compatibility requirements, and ULA the only provider that could satisfy the agency’s demands for satellite handling.

The NRO heavy missions (known as Category C) beyond 2024 will be competed between ULA and SpaceX which were selected as the two providers for the National Security Space Launch Phase 2 procurement. ULA is developing the Vulcan Centaur to replace the Atlas 5 and the Delta 4. SpaceX will fly the Falcon 9 and the Falcon Heavy.

The Air Force said that by the time the Delta 4 Heavy is taken out of service, both ULA and SpaceX are expected to be ready to compete for the Category C contracts.

The Phase 2 launch services procurement was intended to introduce competition into the launch market and bring costs down. At more than $400 million each, the Delta 4 Heavy missions are the most expensive.

The Air Force on Aug. 7 announced the first Phase 2 awards to SpaceX and ULA for three NRO missions. ULA received a $337 million contract for two launches and SpaceX a $316 million contract for one launch.

The Air Force has not explained why the SpaceX launch awarded Aug. 7 costs far more than the ULA launches. The contracts cover additional costs beyond the actual launch service price. The prices that ULA and SpaceX bid for the Phase 2 missions are proprietary.

SpaceX CEO Elon Musk in 2018 tweeted: “A fully expendable Falcon Heavy, which far exceeds the performance of a Delta IV Heavy, is $150M, compared to over $400M for Delta IV Heavy.”

Industry experts have speculated that the large price tag includes one-time costs for vehicle and infrastructure upgrades.

“We don’t yet know enough about the award to know what factored into SpaceX’s pricing for that mission,” said defense budget analyst Todd Harrison, of the Center for Strategic and International Studies.

“It could be that some of the one-time development costs associated with meeting some of DoD’s unique launch requirements — like vertical payload integration — are included in the cost of that first launch,” Harrison told SpaceNews.

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SpaceX pressing on with protest against U.S. Air Force despite launch contract win

WASHINGTON — SpaceX in a court document filed Aug. 19 says it is pressing on with a legal complaint against the U.S. Air Force over contracts awarded in October 2018 to United Launch Alliance, Northrop Grumman and Blue Origin.

In a “joint notice” document that also includes the Air Force’s response, SpaceX reiterates its claim made in a May 2019 protest that the Air Force gave an unfair advantage to the other companies by awarding them Launch Service Agreements and excluding SpaceX.

The Air Force on Aug. 7 announced that SpaceX and ULA were selected as the winners of the National Security Space Launch Phase 2 launch service procurement, with ULA getting 60% of national security launches over five years and SpaceX 40%.

Although Blue Origin and Northrop Grumman did not win Phase 2 contracts and SpaceX did, the company insists that the Air Force’s October 2018 decision caused SpaceX “irreparable harm” and gave ULA a key advantage in winning the larger share of Phase 2 launches.

The purpose of the LSA agreements was to help Phase 2 competitors pay for launch vehicle development and infrastructure. SpaceX competed for an award but did not get one.

In the Aug. 19 document — filed with the U.S. District Court for the Central District of California — SpaceX says the Aug. 7 award does not change the underlying reason for the original protest.

SpaceX is challenging Air Force actions that occurred prior to the start of the Phase 2 competition, the Aug. 19 filing says. “The August 7, 2020 Phase 2 competition awards do not impact the substantive challenges asserted by SpaceX to the competition and award decision under the Launch Service Agreement.”

Although the Phase 2 award “mitigated the harm to SpaceX resulting from the unlawful and flawed LSA award decisions, substantial harm to SpaceX remains,” says the document. “Unlike its competitors, SpaceX competed in the Phase 2 competition without the benefit of government investment and technical information exchanges under the LSAs.”

SpaceX is asking the court to rule the LSA awards improper which would compel the Air Force to end the $967 million six-year agreement with ULA. The agreements with Blue Origin and Northrop Grumman would end anyway because they did not win a Phase 2 contract.

“Given the impending terminations, enjoining the further use of such LSAs harms no one,” says the filing. ULA having that agreement “may well have contributed to ULA winning 60% of the Phase 2 launches.”

The Air Force and ULA in a joint statement point out that SpaceX argument is unreasonable because its LSA bid sought funding for the development of the Big Falcon Rocket, not the Falcon 9 or the Falcon Heavy that it offered for the Phase 2 procurement.

“For Phase 2, SpaceX did not propose the Big Falcon Rocket (“BFR”) that they proposed for the LSA, but rather proposed a modified Falcon Heavy to meet the Category C requirement,” said the statement.

The Air Force and ULA also challenged SpaceX’s assertion that since Phase 2 has been awarded, there would be no disruption to national security if ULA’s LSA agreement were terminated. “If the Court vacated ULA’s LSA, the unplanned deficit in federal development funding under the LSA could delay the readiness for ULA’s Vulcan to perform Phase 2 launches.”

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Air Force to end agreements with Blue Origin and Northrop Grumman, prepares for launch contract protests

WASHINGTON — The Air Force made the call to stick with SpaceX and United Launch Alliance as its launch providers for the next five years. Now it has to decide if and how to continue working with the companies that lost the National Security Space Launch Phase 2 competition — Blue Origin and Northrop Grumman.

An issue at hand is the termination of the Launch Service Agreement contracts that the Air Force awarded in October 2018 to Blue Origin and Northrop Grumman, as well as to ULA.

The purpose of the agreements was to help Phase 2 competitors pay for launch vehicle development and infrastructure. Blue Origin received $500 million; Northrop Grumman $792 million and ULA $967 million. The funds were to be spread out through 2024, and the Air Force from the beginning said the LSAs would be terminated with those companies that did not win a Phase 2 procurement contract.

Despite political pressure to not end the LSAs, the agreements will be terminated, Assistant Secretary of the Air Force for Acquisition Will Roper said Aug. 7 during a video conference with reporters.

“We will work with those two companies to determine the right point to tie off their work under the LSA agreements,” Roper said. The intent of the LSAs “was to create a more competitive environment leading into Phase 2,” he said. “The point is not to carry them indefinitely.”

LSA funds supported the development of Blue Origin’s New Glenn rocket and Northrop Grumman’s OmegA launch vehicle. ULA will continue to receive funds for its Vulcan Centaur vehicle. SpaceX was not awarded an LSA contract.

Before the LSAs are terminated, said Roper, “We have to determine what work has been done and what rights to the data the government has. We want to make sure we retain those.”

Roper said a key reason why the LSAs could not continue for all three companies is that the Air Force doesn’t have enough money in the budget.

A RAND report commissioned by the Air Force warned that ending the LSAs could leave the Air Force with fewer industry competitors able to challenge ULA and SpaceX in 2024 when Phase 3 of the National Security Space Launch program is scheduled to begin.

RAND said cutting off financial support could drive companies to abandon certification efforts to qualify commercial launch vehicle for national security launch. The report said this has national security implications because if a U.S. launch company dropped out of the market, a foreign competitor is likely to emerge to try to fill the gap.

Roper said the Air Force plans to continue to support U.S. industry but the specifics have yet to be worked out, Roper said. “We will discuss this with Capitol Hill for Phase 3.”

Roper said he agreed with RAND’s take that it would be “in the government’s best interest to have three or more viable systems to compete for Phase 3.”

Both the House and Senate versions of the 2021 National Defense Authorization Act include provisions for the Air Force to create new partnerships with the launch industry similar to the LSAs.

Possibility of legal protests

Before the Air Force can move forward and start planning Phase 2 missions with SpaceX and ULA, it is preparing for the possibility of a legal protest over the Aug. 7 awards.

Blue Origin and Northrop Grumman issued statements on Friday expressing disappointment in the Air Force’s selection. Any decision to file a protest would be made after the companies are briefed by the Air Force on why their bids didn’t make the cut.

“We submitted an incredibly compelling offer for the national security community and the U.S. taxpayer,” Blue Origin CEO Bob Smith said. The New Glenn bid was a “very competitive single basic launch service price for any mission across the entire ordering period.”

The company intends to stay in the launch market regardless, Smith said. “We are proceeding with New Glenn development to fulfill our current commercial contracts, pursue a large and growing commercial market, and enter into new civil space launch contracts.”

Northrop Grumman said the company is “confident we submitted a strong proposal that reflected our extensive space launch experience and provided value to our customer, and we are looking forward to our debriefing from the customer.”

Surprising price tag for SpaceX mission

The selection of SpaceX and ULA was not surprising given their experience. “This ended exactly how everyone expected,” said one industry source.

What nobody expected was the price tag for SpaceX’s first Phase 2 mission awarded on Aug. 7.

SpaceX was awarded a $316 million contract to launch USSF-67, a mission scheduled for the fourth quarter of fiscal year 2022. ULA was awarded a $337 million contract to launch two missions — USSF-51 and USSF-106 — scheduled for the second and fourth quarters of fiscal year 2022, respectively.

Roper during the call with reporters was asked to explain why SpaceX is being paid nearly the same amount for one mission that ULA is getting for two missions. Roper declined to comment on that issue, and said these launches are classified missions.

The U.S. Space Force’s Space and Missile Systems Center, which oversees launch procurements, said in a statement to SpaceNews that both contracts include funding for support costs in addition to the price that the companies bid for the launch services.

“The awarded task order includes the first year of Launch Service Support, and the prices for the individual missions ordered from each respective company,” SMC said. “These prices were proposed by companies as part of the Phase 2 acquisition, and they reflect significant savings when compared to historical pricing from previous NSSL launch acquisitions.”

The additional payment to launch providers — which one industry source estimated at about $100 million per company — was unexpected. It is reminiscent of the “ELC” funding that the Air Force used to pay ULA and was criticized by SpaceX as government subsidies that commercial companies don’t get.

ELC is short for Evolved Expendable Launch Vehicle Launch Capabilities, which the Air Force awarded yearly to ULA for infrastructure and engineering support. ELC was discontinued in 2019 and the Air Force said it would transition to commercially based pricing.

Based on the value of the Aug. 7 contract, the SpaceX contract is likely for a Falcon Heavy launch. An industry analyst who asked to not be quoted by name said the $316 million launch contract, even if $100 million is for support costs, is very large considering the pricing that SpaceX has offered for Falcon Heavy. The company in February won a Falcon Heavy contract for a NASA asteroid mission in 2022 valued at $117 million, which includes the launch itself and other mission-related costs.

SpaceX has not commented on social media or issued any statements following the Air Force’s announcement that it was selected as a Phase 2 provider.

The Air Force awarded ULA 60% of the Phase 2 missions to be flown over five years, and 40% will go to SpaceX. According to several sources, SpaceX believes it should have won the 60% share because it has operational and certified vehicles, whereas ULA’s Vulcan Centaur is still in development and is expected to fly for the first time in 2021.

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News Analysis | With Pentagon award, SpaceX joins the establishment

LC-39A mobile service tower

WASHINGTON — Six years ago, SpaceX was the upstart launch company seeking to break United Launch Alliance’s monopoly on national security space launches. Now, it’s part of the establishment.

When the U.S. Air Force announced Aug. 7 that SpaceX and ULA would split the National Security Space Launch (NSSL) Phase 2 contracts for launches between 2022 and 2027, it cemented SpaceX’s position in the government launch market, one that it went to court not that long ago to enter.

In 2014, frustrated with the Air Force’s award of a block buy contract to ULA for Atlas 5 and Delta 4 rockets, SpaceX filed a lawsuit in federal court, arguing that some of those launches should be competed. The Air Force countered that SpaceX’s Falcon 9 vehicle was not yet certified and thus could not compete.

“New entrants have to fight every day,” recalled Gwynne Shotwell, president of SpaceX, during a panel discussion at the Satellite 2020 conference in March. “If we’re entering a market where we weren’t before, the folks that are in the existing market are going to be upset and they’re going to make sure you have as difficult a road as you possibly can.”

SpaceX dropped the lawsuit in early 2015 after winning concessions from the Air Force, such as speeding up certification of the Falcon 9 and making more launches available for competition. SpaceX has since won several launch contracts for national security missions, which have included the launch of a GPS 3 satellite June 30.

Around the same time that SpaceX sued to win access to the national security launch market, the souring of U.S.-Russian relations raised concerns about continued reliance on the Russian-built RD-180 engine used by the Atlas 5, particularly when Russian officials threatened to ban exports of the engine in response to Western sanctions of Russia. That started a process to end reliance on the RD-180 that culminated in the NSSL Phase 2 competition.

SpaceX, once considered an unproven new entrant, went into this competition as something of an incumbent. It was the only one of the four bidders that offered vehicles flying today: Falcon 9 and Falcon Heavy. SpaceX instead made more incremental changes, such as an extended payload fairing. It will also build a mobile service tower at Launch Complex 39A at the Kennedy Space Center in order to support vertical processing required for some national security payloads.

“We fought hard to enter this market and we really hope we can continue,” Shotwell said at Satellite 2020. “We have done a good job building a launch vehicle that can serve many markets.”

ULA may have fought SpaceX when that company tried to get into a market the Boeing-Lockheed Martin joint venture had dominated for years. However, it also adapted to the changing market and the competition under the leadership of Tory Bruno, who became president and chief executive of the company in 2014. ULA has spent the last several years working on a next-generation rocket, Vulcan, that will ultimately replace both the Atlas and Delta and end reliance on the RD-180.

Although Vulcan is new, ULA’s long record of working in national security launch made it a front-runner, and Bruno was confident that ULA’s track record would overcome any uncertainty about a new launch vehicle. On that Satellite 2020 panel, he predicted the global launch market could sustain four large vehicles, of which one would be Russian and another European.

“Thank goodness that leaves two for the U.S. because we want to have assured access via two providers,” he said. “That is the right number, and that is why the Air Force will select two this summer. It’ll be ULA and one of my colleagues up here.”

The two losers in the competition, Blue Origin and Northrop Grumman, face different fates. Blue Origin’s development of New Glenn, which company executives have estimated to cost $2.5 billion, has been funded by company founder Jeff Bezos, who has leveraged his massive Amazon.com wealth to support a long-term vision of millions of people living and working in space.

That vision is unlikely to be derailed by losing a single government contract. Work continues on both the New Glenn rocket and a launch complex at Cape Canaveral, not far from where the company built a large factory for building the rocket. Blue Origin is also still involved in the NSSL Phase 2 program as a supplier to ULA: the BE-4 engine it developed will be used on the first stage of Vulcan, as well as its own New Glenn rocket.

The future of Northrop Grumman’s OmegA rocket is less clear, though, without having a base of national security launch contracts. Company executives have emphasized that its use of hardware for the rocket with ties to other programs, like the Space Launch System, make it possible for the vehicle’s business case to close with just a handful of launches a year.

“OmegA is not a rocket seeking multiple payloads, it’s a rocket built on the margins of a number of other businesses we have,” Charlie Precourt, vice president of propulsion systems at Northrop Grumman, said on that Satellite 2020 panel.

“We’re doing synergies to make sure that we can sustain very, very low flight rates, lower than you could traditionally see in a launch vehicle provider,” he said. However, it’s unclear if that business case can still close without the U.S. government as an anchor customer.

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Breaking News | Pentagon picks SpaceX and ULA to remain its primary launch providers

WASHINGTON — The Department of the Air Force announced Aug. 7 that incumbents United Launch Alliance and SpaceX have been selected to receive five-year contracts totaling $653 million to launch national security satellites for the U.S. military and intelligence agencies.

United Launch Alliance received a $337 million contract and SpaceX received a $316 million contract for launches planned between between fiscal 2022 through fiscal 2027, according to the Pentagon’s announcement. The U.S. government’s fiscal year begins Oct. 1.

The companies beat Blue Origin and Northrop Grumman in the four-way competition known as the National Security Space Launch Phase 2 Launch Service Procurement.

SpaceX and ULA will collectively will fly as many as 34 missions for the Department of Defense and the National Reconnaissance Office under the firm-fixed-price, indefinite-delivery contracts.

“Maintaining a competitive launch market, servicing both government and commercial customers, is how we encourage continued innovation on assured access to space,” Will Roper, assistant secretary of the Air Force for acquisition, technology and logistics, told reporters.

Roper said the Phase 2 awards mark a pivotal point in the transition of the national security launch program to take advantage of commercial innovation and private investments in launch vehicles.

“Today’s awards mark a new epoch of space launch that will finally transition the Department of Defense off Russian RD-180 engines,” he said.

The shift to new launch vehicles also is compelled by a legislative mandate to end the Pentagon’s reliance on United Launch Alliance’s Atlas 5 rocket which has the Russian RD-180 as its main engine. By law, DoD will not be allowed to buy Atlas 5 launches after Dec. 31, 2022.

In Phase 2 ULA will get 60 percent of the missions, and SpaceX will get 40 percent. The Air Force will assign specific rockets on a yearly basis depending on the required missions.

The Air Force has insisted that it is not committing to buying a preset number of launches. The estimate of 34 missions for the covered five-year period could change as priorities and budgets fluctuate from year to year

The high-stakes Phase 2 competition officially started in May 2019 when the U.S. Air Force released the final solicitation for bids. Blue Origin, Northrop Grumman, SpaceX and United Launch Alliance all submitted bids in August 2019. ULA and SpaceX are incumbent launch providers, whereas Blue Origin and Northrop Grumman are new entrants.

ULA is developing a new vehicle for Phase 2, the Vulcan Centaur, a two-stage heavy-lift launch vehicle with the main stage powered by Blue Origin’s BE-4 engine.

SpaceX offered the Falcon 9 and Falcon Heavy, the only certified vehicles that competed in Phase 2.

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