Lockheed Martin, Northrop Grumman, York Space selected to build DoD’s internet-in-space constellation

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The agency awarded three contracts: $700 million to Lockheed Martin, $692 million to Northrop Grumman and $382 million to York Space for the Transport Layer Tranche 1

WASHINGTON — The Defense Department’s Space Development Agency announced Feb. 28 it awarded Lockheed Martin, Northrop Grumman and York Space Systems contracts worth nearly $1.8 billion to produce 126 satellites for a global communications network in low Earth orbit.

The agency awarded three contracts: $700 million to Lockheed Martin, $692 million to Northrop Grumman and $382 million to York Space for the Transport Layer Tranche 1. Each company has to deliver 42 satellites by 2024. A total of eight bidders competed for the three awards. 

The Space Development Agency (SDA) is building the Pentagon’s first-ever internet in space — a network of small satellites in low Earth orbit to support military communications, surveillance and tracking of enemy targets. 

SDA plans to build the Transport Layer in batches, or “tranches.” The agency in 2020 ordered 20 Tranche 0 satellites – 10 each from Lockheed Martin and York Space. These are scheduled to launch later this year. For the much larger Tranche 1, SDA added a third contractor, Northrop Grumman.

SDA Director Derek Tournear said the plan is to launch Tranche 1 starting in September 2024. The 126 spacecraft would launch in six batches of 21 satellites at a rate of one launch per month. 

The three satellite providers were awarded contracts known as Other Transaction Authority. OTAs are used as alternatives to traditional Federal Acquisition Regulation (FAR) contracts. SDA had initially sought bids under the FAR contracting method but changed course after Maxar Technologies filed a protest in October alleging that terms unfairly favored certain companies over others. 

SDA re-issued the solicitation under the OTA approach, which gives government agencies more flexibility to evaluate and select contractors. The Competition in Contracting Act does not apply to OTA deals so they are less likely to be protested. 

SDA’s constellation, if successful, could become a model for how DoD can deploy satellite networks that are more resilient against cyber attacks and other threats. The Transport Layer is a “proliferated” constellation, meaning it has a large enough number of satellites that it would be extremely costly for an adversary to try to take it down.

The Transport Layer marks DoD’s first major program to use smaller, lower-cost satellites for critical military operations. Most constellations deployed over the past decades were made up of car-size or schoolbus-size spacecraft, each costing hundreds of millions or even billions of dollars. SDA was established in 2019 precisely to tap into the emerging commercial space market and the innovations in small satellites, and apply them to military systems

“SDA is changing the landscape for acquisition of national defense space capabilities by capitalizing on a unique business model that harnesses commercial development to achieve a proliferated low Earth orbit architecture that enhances resilience and lowers latency to process and move data from sensor to shooter,” said Tournear.

The Tranche 1 constellation of 126 space vehicles will be divided into six orbital planes to be launched into near-polar low Earth orbit. Satellites will have laser links so they can pass data in space as a mesh network and minimize the need to transfer data through ground stations. Data gathered by a satellite on the location of a target, for example, can be instantly transmitted to whoever would have to shoot down that target. 

“We want to be able to detect, track and target anything that is a mobile missile launcher or ship and be able to send those targeting solutions directly down to a weapons platform,” said Tournear.

Lockheed Martin, Northrop Grumman and York Space have to equip their satellites with optical inter-satellite links that comply with SDA-mandated technical specifications to ensure that satellites can talk to each other regardless of what manufacturer made them. 

Under the contract, the three companies have to operate and maintain their portion of Tranche 1 satellites. SDA plans to select a separate contractor to integrate and manage ground operations. 

SDA contracts a win for Colorado

Lockheed Martin and York Space both will produce the Tranche 1 satellites in the Denver area. Northrop Grumman has not yet announced a manufacturing partner or where its satellites will be produced.

Blake Bullock, vice president of communication systems at Northrop Grumman, noted the company’s track record fielding constellations, including the assembly, integration and testing of 81 Iridium NEXT satellites that were deployed in low Earth orbit in 2019. Orbital Sciences Corp., a company later acquired by Northrop Grumman, produced those satellites under contract to Iridium’s prime contractor, Thales Alenia Space.

Lockheed Martin’s Tranche 1 satellites will use buses supplied by Tyvak, a small satellite manufacturer owned by Terran Orbital.

Chris Winslett, Lockheed Martin’s program director, told SpaceNews that SDA’s Transport Layer marks a departure from traditional military space procurements. “Having watched this marketplace evolve over the last 20 years, this is a new capability that is enabled by technology and manufacturing readiness levels.”

Technologies like inter-satellite laser links are finally coming to fruition and becoming widely available, said Winslett. Small satellites are now advanced enough that they operate like computers in space, able to do things like mesh networking and battle management command and control on board the satellites. “All of that came together just at the right time to make this mesh network happen,” he said. 

SDA is now able to “take advantage of technologies that are ready to create a new architecture,” Winslett said. 

Chuck Beames, executive chairman of York Space Systems, said the SDA contract is “a big deal for the small satellite industry and for the role of small satellites in meeting national security needs.”

While Lockheed and Northrop are two of the Pentagon’s top prime contractors, York Space is an underdog. The company was founded in 2012 with the goal of making satellites more like consumer electronics, which has been made possible by the miniaturization of components and mass production.

Up to this point, small satellites were “interesting things to demonstrate but the Transport Layer is an actual operational mission constellation,” Beames told SpaceNews. “It’s not a demo or not just an exercise.”

SDA’s planned architecture changes the way DoD buys satellites and is also a key step forward in how DoD provides connectivity to military forces in the field, Beames said. 

“What it does is it allows anybody in the military to be able to communicate through that network to everybody else,” he added. “It’s geared towards operational users, not just the Pentagon but folks in the field and warfighting commands in the field.”