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The Space Force formally terminates launch agreements with Northrop Grumman and Blue Origin

On December 31, the United States Space Force formally ended launch technology agreements signed with Northrop Grumman and Blue Origin in October 2018. The Air Force granted Northrop Grumman, Blue Origin and United Launch Alliance Launch Service Agreements. There were 6-year public-private agreements where both the government as well as contractors planned to participate in the production of rockets and the facilities needed to succeed in the launch program of the National Security Space. Since day one, the aim was to withdraw the LSAs for businesses that did not win a procurement deal for the National Security Space Launch. In August, Northrop Grumman and Blue Origin lost to SpaceX and ULA, which were preferred.

The Space and Missile Systems Center stated that the LSAs with Northrop Grumman and Blue Origin concluded on December 31, 2020, in a report to SpaceNews. From October 2018 to December 2020, $255.5 million was billed to Blue Origin. $500 million was worth of the initial six-year deal. Over the same span, Northrop Grumman earned $531.7 million, almost two-thirds of the overall valuation of the LSA, which was $792 million. “All remaining production efforts for the LSA milestones of Blue Origin as well as Northrop Grumman have been finished and delivered by December 31, 2020,” stated SMC.

The Space Force would receive limited access to data and hardware produced by the companies under the arrangements in exchange for the investment. “These rights give the government priority for future reasons to the technologies created under these deals, but also enable the sector to apply these technologies to its future developments.” The LSAs funded the production of the New Glenn rocket from Blue Origin and OmegA from Northrop Grumman. Northrop Grumman abandoned the production of OmegA after being removed from the National Security Space Launch program. Still, the Blue Origin is moving on and says it intends to fly New Glenn in the late 2021 and bid in the market for the commercial launch.

The main explanation why LSAs for all 3 companies could not proceed is that the Air Force doesn’t even have enough funds in the budget, Roper stated. In 2024, when Phase 3 of National Security Space Launch project is expected to start, a RAND report requested by the Air Force cautioned that terminating the LSAs might present the Air Force with less industry rivals willing to threaten ULA and SpaceX. RAND stated that cutting off financial assistance could drive businesses to abandon qualification attempts to apply for the commercial launch vehicles’ national security launch. This has national defense consequences, the study said, that if a United States launch firm fell out of the market, an international player may arise to attempt to fill the void.

Roper stated the Air Force wants to continue promoting the United States sector, but Roper mentioned the particulars are yet to be sorted out. “We’re going to talk to Capitol Hill about this for Phase 3.” Roper stated he agreed with RAND’s opinion that it was going to be “in the best interest of the government to contend for Phase 3 with 3 or even more feasible systems.” Roper works in the Air Force as the assistant secretary.

This post was originally published on Downey Magazine