rethink

DoD space agency driving Pentagon contractors to rethink their price points

Space Development Agency constellations of cheaper mass-produced satellites create opportunities and risks for contractors

WASHINGTON — The Space Development Agency is buying 20 communications satellites for about $14 million apiece, and eight missile-warning satellites for about $43 million per unit.

These price points are unprecedented in Pentagon satellite programs and a sign that the military space market could be headed in a different direction, said Bill Gattle, president of space systems at L3Harris.

L3Harris and SpaceX each received contracts on Monday to build four missile warning satellites for the Space Development Agency. Lockheed Martin and York Space in August won contracts to each produce 10 data-relay satellites. All must be delivered two years from now. 

Military satellites typically are made in onesies and twosies, take decades to develop and cost hundreds of millions of dollars each. The SDA constellations of cheaper mass-produced satellites are a “fundamental transformation” in how DoD buys space technology, Gattle told SpaceNews Oct. 6.

With SDA planning to buy hundreds more satellites in the coming years, “we’re all trying to figure out how to change the price point,” Gattle said.

DoD wants to build large constellations that cost less and also are reliable and deployed quickly, he said. “So all of us have really taken a hard look at how do we build these things? What drives the cost? Why do DoD exquisite systems cost so much?”

Gattle said L3Harris, like other companies, were caught off guard by the speed of SDA contracting. The company had planned to compete for the Transport Layer satellites that were awarded to Lockheed Martin and York Space, but it didn’t move quickly enough. 

“I don’t think we were as ready as we needed to be. And therefore we didn’t win,” he said. When the Tracking Layer opportunity for missile-warning satellites

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