Orbcomm, SpaceX Renegotiate Launch Contract for 18 Second-generation Satellites

by

PONTE VEDRA, Fla. — Satellite messaging service provider Orbcomm has renegotiated its 18-satellite contract with Space Exploration Technologies Corp. (SpaceX) and will now pay $42.6 million for the launch of “up to” 18 Orbcomm satellites on two SpaceX Falcon 9 rockets, Orbcomm said Dec. 27.

The price is $4 million less than that announced in the original contract, concluded in 2009.

Fort Lee, N.J.-based Orbcomm said the two companies have agreed that the launches will occur between April 2013 and June 2014. If either side is more than six months late in performing its tasks under the contract, it will make penalty payments to the other, Orbcomm said in a filing with the U.S. Securities and Exchange Commission.

Under the 2009 contract, valued at $46.6 million, Orbcomm and Hawthorne, Calif.-based SpaceX agreed that the 18 second-generation Orbcomm satellites would be launched aboard smaller Falcon 1e rockets.

SpaceX has since suspended production of Falcon 1e to concentrate on the Falcon 9 vehicle.

Orbcomm officials have told investors that the company fully expected to amend the contract with SpaceX to provide for two Falcon 9 vehicles.

A Falcon 9 launch in October carrying a prototype second-generation Orbcomm satellite suffered the loss of one of its first-stage engines. The principal payload, a SpaceX Dragon cargo vehicle headed to the international space station, was successfully placed into orbit and completed its mission.

The Orbcomm satellite was dropped into a too-low orbit and re-entered Earth’s atmosphere. Orbcomm has said ground teams were nonetheless able to test the satellite’s functionalities sufficiently to proceed with plans for the full 18-satellite constellation.

Orbcomm said it would take an $11 million charge as a result of the loss of the satellite, and would file a $10 million insurance claim.