Rocket Lab wins $515 million contract to build 18 satellites for U.S. government agencies

Washington-based space launch provider and satellite manufacturer Rocket Lab has struck a deal worth more than $500 million to build 18 satellites for U.S. government agencies.

As disclosed in a regulatory filing with the U.S. Securities and Exchange Commission (SEC) on December 21, as part of a $515 million U.S. government contract, the National Security Rocket Laboratory will “design, manufacture, deliver and operate 18 space vehicle”. A spokesman said the company could not provide further details.

The customer is likely to be the Space Development Agency, sources said.

SDA, an organization under the U.S. Space Force, is building a mesh network of military satellites in low-Earth orbit called the “Prolifer Warrior Space Architecture.”

SDA Director Derek Tournear said at a meeting earlier this month that the agency is negotiating an 18-satellite contract with an unspecified supplier to expand the U.S. The size of military low-Earth orbit constellations.

Part of the SDA surge architecture is the transport layer Tranche 2 Beta, which consists of communications satellites that provide over-the-horizon connectivity to military forces on the ground.

The transport layer Tranche 2 Beta is expected to have 90 satellites. The agency announced in August that it had awarded contracts to Lockheed Martin and Northrop Grumman for 72 Beta satellites worth $1.5 billion.

Tournier said at a National Security Space Council event on December 7 that SDA plans to add 18 more Beta satellites to the constellation and is in talks with another supplier, but he did not disclose specific information.

The transport layer Tranche 2 Beta satellites, expected to be launched in 2026 and 2027, will carry radios using UHF (ultra high frequency) and S-band frequencies, which military and intelligence units rely on for voice and low-speed data transmissions.

Tournear said at the NSSA Forum on December 7 that we are looking at contracting for approximately 18 more satellites and we are working with third-party vendors to do that and we should have an announcement soon.

According to Rocket Labs’ filing with the SEC, the base amount of the contract is $489 million, with incentives and options worth $26 million. Work under the agreement will begin immediately with delivery of the spacecraft to customers, with launch expected in 2027 and satellite operation until 2030, with an option to operate the satellite until 2033.

Rocket Lab continues to grow satellite business

Rocket Lab, located in Long Beach, California, specializes in small satellite launch services, and its Electron rockets operate at space launch sites in New Zealand and Virginia. It is developing a larger rocket called Neutron, which is expected to debut in 2025.

The company also has a thriving space systems business, manufacturing components and spacecraft for government and commercial customers. The contract with SDA will be Rocket Labs’ largest satellite operation to date.

The company launched its Photon satellite series in 2019. In 2022, the company launched a national security subsidiary focused on the U.S. defense and intelligence markets.

Rocket Lab won two contracts worth $14 million in 2022 to provide separation systems for Space Development Agency satellites. The separation system is the interface that attaches the satellite to the rocket and releases it into space once the rocket reaches its intended orbit.

The separation systems are suitable for 84 satellites built by Lockheed Martin and another undisclosed manufacturer that supplies satellites to SDA.

Rocket Lab launched the first Photon satellite in 2020. CEO Peter Beck said the spacecraft was designed to meet the need for a turnkey, low-cost satellite platform that can accommodate a variety of payload types.

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