The U.S. Space Force has awarded contracts totaling approximately $1.6 billion to Long Beach-based Rocket Lab and Northrop Grumman's Redondo Beach campus. The agreements are for the construction of advanced satellites designed to detect and track hypersonic missile threats from low Earth orbit.
For Rocket Lab, the $805 million contract represents the largest single award in the company's history, signaling a major strategic evolution from a launch service provider to a comprehensive space systems contractor. Northrop Grumman secured a $764 million contract, continuing its role as a key partner in developing the nation's next-generation satellite defense network.
Key Takeaways
- The U.S. Space Force awarded a combined $1.6 billion to Rocket Lab and Northrop Grumman.
- Rocket Lab's $805 million contract is its largest to date, marking a shift to a prime space contractor.
- Northrop Grumman received $764 million, expanding its contribution to the satellite network to 150 total satellites.
- Each company will build 18 satellites for a network designed to provide global tracking of hypersonic missiles.
- The contracts are part of the Space Development Agency's Proliferated Warfighter Space Architecture.
A New National Defense Frontier in Space
The U.S. Space Development Agency (SDA) announced the significant awards as part of its ongoing effort to build the Proliferated Warfighter Space Architecture (PWSA). This initiative aims to create a resilient, multi-layered network of satellites in low Earth orbit (LEO) to counter emerging military threats.
Both Rocket Lab and Northrop Grumman will each construct 18 satellites for a segment of this network. These satellites are specifically designed to provide near-continuous global coverage for missile warning and tracking, with a particular focus on hypersonic weapons. Hypersonic missiles, which can travel at more than five times the speed of sound and maneuver in flight, pose a unique challenge to traditional defense systems.
According to Gurpartap “GP” Sandhoo, the acting director of the Space Development Agency, these contracts are a critical step. Sandhoo stated that the awards “will achieve near-continuous global coverage for missile warning and tracking” and provide other vital military communication capabilities.
What is the Proliferated Warfighter Space Architecture?
The PWSA is a new approach to military space assets. Instead of relying on a few large, expensive satellites in high orbits, the SDA is deploying hundreds of smaller, more affordable satellites in low Earth orbit. This "proliferated" network is designed to be more resilient; if one satellite fails or is disabled, others can quickly take its place, ensuring continuous coverage for U.S. forces.
Rocket Lab's Transformation Confirmed
For Rocket Lab, this contract is more than just a financial milestone. The $805 million award solidifies its transition from a niche provider of small satellite launch services to a fully integrated, prime contractor capable of designing, building, and deploying complex space systems.
Founded in New Zealand in 2006, the company moved its headquarters to Long Beach in 2020. It gained prominence with its Electron rocket, which specializes in dedicated launches for small satellites. This new contract, however, places it in direct competition with established aerospace giants.
“This is more than just a contract. It’s a resounding affirmation of our evolution from simply a trusted launch provider to a leading vertically integrated space prime contractor.”
This award builds on a previous $515 million contract for Rocket Lab to deliver 18 communications satellites for the same network. The company also noted that the agreement could lead to an additional $195 million in revenue from supplying components to other contractors involved in the PWSA project, potentially bringing the total value to over $1 billion.
An Industry Disruptor
Peter Beck, Rocket Lab's founder and chief executive, described the contract as a reflection of the company's growth into an "industry disruptor." The ability to vertically integrate—building both the satellites and the rockets to launch them—gives Rocket Lab a unique position in the market.
This strategy allows for greater control over production timelines and costs, an attractive proposition for government agencies like the SDA that prioritize speed and efficiency in deploying new capabilities.
Market Reacts to the News
Following the announcement, Rocket Lab's stock (RKLB) experienced a significant surge, closing up nearly 18% at $70.52 per share. Northrop Grumman's shares (NOC) also saw a modest increase of 1.6%, closing at $568.46.
Northrop Grumman Deepens Its Role
While the contract is a landmark achievement for Rocket Lab, it also represents a continued vote of confidence in Northrop Grumman. The aerospace and defense technology company has been a foundational partner in the PWSA from its early stages.
With this latest $764 million award, Northrop Grumman is now contracted to deliver a total of 150 satellites for the network. The company is building these satellites at its Redondo Beach Space Park campus, a historic hub for aerospace innovation in Southern California.
Northrop Grumman officials emphasized that their satellites are being engineered to specifically counter the rise of hypersonic missile technology. The system requires advanced infrared tracking capabilities and rapid data transmission to provide actionable intelligence to protect U.S. troops and assets worldwide.
Southern California's Aerospace Renaissance
The dual awards to companies in Long Beach and Redondo Beach highlight Southern California's resurgent role as a critical center for the nation's space and defense industries. The region is home to a growing ecosystem of both established contractors and innovative startups, fueled by increased government and private investment in space technology.
The SDA also announced additional contracts for 36 more satellites, valued at nearly $2 billion, to a Lockheed Martin group in Sunnyvale, California, and L3Harris Technologies in Indiana. This widespread investment underscores a national priority to modernize space-based defense capabilities rapidly.
As nations around the world develop more advanced offensive weapons, the United States is clearly investing heavily in a new orbital defensive line. The work being done in Southern California by companies like Rocket Lab and Northrop Grumman is central to that strategy, shaping the future of national security from low Earth orbit.