Virgin Orbit wins first Defense Department launch contract

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Updated 10:00 p.m. Eastern.

LUXEMBOURG CITY — Virgin Orbit announced Nov. 16 that it has received its first launch contract for a LauncherOne mission from a Defense Department agency.

The company said the U.S. Air Force’s Space Test Program partnered with the Defense Innovation Unit Experimental (DIUx) to make the launch award to Virgin Orbit through an other transactions agreement. The launch will carry a selection of Space Test Program payloads to be chosen closer to launch.

The award was the result of months of talks between the company and the Defense Department. “We spent the better part of six months or so in discussions,” said Dan Hart, chief executive of Virgin Orbit, in a phone interview. The company found common ground with DIUx, whose mission is to accelerate development of commercial capabilities with defense applications. “DIUx has the mission to be agile and really drive forward, so we were able to really approach things quickly and efficiently.”

The Defense Department’s interest in LauncherOne, an air launch system for small satellites, is rooted in a growing desire for resiliency in for satellite systems, Hart believes. “With this emphasis on resiliency in space systems, and small satellites in particular, resilient launch with a platform like ours can play a very important role,” he said.

Virgin Orbit used the contract news to announce the formation of a new subsidiary, VOX Space, which will focus on national security space customers for LauncherOne. VOX Space will handle the mission management, engineering, and related services needed for government customers flying on LauncherOne.

“VOX Space is set up with the security aspects that come with working with national security space,” Hart said. “We felt it was important to have a set of experts who understand those issues.”

Mandy Vaughn, president of VOX Space, said in an interview that the creation of the U.S.-owned subsidiary addresses the fact the Virgin Orbit, while based in the U.S., has foreign ownership. It is similar to the approaches used by foreign-owned satellite operators seeking to do business with the U.S. government.

This initial award is done though other transactions authority (OTA), she said, to provide flexibility, particularly for a new company like VOX Space that is still building up the infrastructure needed for conventional contracting with the Defense Department. “The OTA approach is a great first step. It’s intended to be collaborative,” she said. “It’s a step towards future contracts.”

Hart said he expected national security missions to be a “steady part” of Virgin Orbit’s overall customer base, along with commercial and civil government business. “With the emphasis on the government to make use of commercial space, it fits very nicely,” he said.

“What LauncherOne enables in commercial space we hope will be analogous to the government as well: flexible architectures with flexible price points,” Vaughn said. “We’re hoping that, by changing the launch calculus, we can change the thinking about how to use it.”

This launch is scheduled for as early as January 2019, according to a Virgin Orbit statement, although Hart said it could take place in late 2018. The launch will be near the end of the “first handful” of LauncherOne missions.

LauncherOne is in the final stages of development. Its carrier aircraft, a Boeing 747 that was formerly a passenger airliner for Virgin Atlantic, is currently in flight tests after undergoing modifications to accommodate the launch vehicle. A pathfinder version the rocket, meanwhile, has been shipped from the company’s factory in Long Beach, California to Mojave for testing, including static fire tests of both stages.

Hart said Virgin Orbit remained on schedule for a first launch in the first half of 2018. That launch will carry a test payload for the company, including instrumentation to characterize the flight environment.

Besides the new Defense Department business, Hart said Virgin Orbit has been in talks with a wide range of other customers. “It’s a very active market right now,” he said. “We’re pretty bullish.”