The U.S. Space Systems Command (SSC) is fundamentally changing how it purchases space technology, moving away from slow, traditional defense contracts to a more agile system that embraces commercial innovation and smaller companies. This strategic shift is designed to accelerate the delivery of new capabilities and adapt to a rapidly evolving global space environment.
Officials state this new approach leverages a variety of flexible contracting tools and funding mechanisms. The goal is to lower barriers for new entrants, increase competition, and utilize privately developed technologies to maintain a competitive edge in space.
Key Takeaways
- Space Systems Command is shifting from large, decade-long programs to faster, iterative acquisition models focused on minimum viable products (MVPs).
- The new strategy prioritizes partnerships with commercial companies, small businesses, and non-traditional defense contractors.
- Multiple new funding mechanisms like OTAs, SBIR/STTR, and IDIQs are being used to attract a wider range of technology providers.
- Since 2023, SpaceWERX has awarded over $1 billion in SBIR/STTR contracts to more than 510 companies, demonstrating the scale of this shift.
- Competition is now viewed as a key driver for innovation, moving away from sole-source relationships with large prime contractors.
A New Era in Space Acquisition
The landscape of space technology has transformed in recent years. Historically, space acquisitions involved a few large defense companies building highly specialized, expensive satellites designed to last over a decade. According to Natalie Riedel, SSC's director of contracting, that model is no longer sufficient.
Today, the industry is characterized by lower launch costs, the rise of commercial space ventures, and the development of large constellations of smaller satellites in Low Earth Orbit (pLEO). These constellations can be updated with new technology every few months, a stark contrast to the old development cycle.
The Old vs. New Model
The traditional approach involved the government defining every requirement and funding a project from concept to completion, a process that could take decades. The new model leverages commercial investment, where companies often use their own capital to develop mature technologies before seeking a government contract.
"The idea that the government is going to fund a requirement from Day One of the concept all the way through fielding is antiquated," said Riedel. "We are getting away from big behemoth programs that don’t deliver capability for decades and moving to a smaller minimum viable product (MVP) and a more iterative approach to acquiring systems."
This change has opened the door for small businesses and startups. Riedel noted that market research for new projects often reveals 15 to 20 potential providers, a significant increase from the past. This expanded industrial base is a direct result of new contracting strategies designed to be more inclusive and flexible.
Navigating the Funding Landscape
To engage this diverse new market, the U.S. Space Force utilizes a wide array of contracting and funding tools. These mechanisms are designed to guide companies, from small startups to established firms, through the government procurement process.
Organizations like SSC’s Front Door, the Commercial Space Office (COMSO), and SpaceWERX act as entry points for businesses looking to work with the military. They offer various pathways for companies to secure funding and develop their technologies for defense applications.
Key Funding Programs for Industry
- SBIR/STTR: The Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR) programs are known as “America’s Seed Fund.” They provide early-stage funding for small businesses to move from concept to prototype.
- STRATFI/TACFI: The Strategic and Tactical Funding Increase programs help companies bridge the gap between a successful prototype (SBIR Phase II) and a full production contract (Phase III), a period often called the “Valley of Death.”
- OTAs: Other Transaction Authorities offer a flexible contracting structure to attract non-traditional defense contractors. These are often used for rapid prototyping.
- IDIQs: Indefinite Delivery / Indefinite Quantity contracts allow the government to purchase services or products from multiple pre-qualified vendors over time, fostering continuous competition.
Funding by the Numbers
Since October 1, 2023, SpaceWERX has awarded 562 contracts to 416 unique companies, totaling $673 million. This demonstrates a clear focus on broadening the industrial base rather than concentrating funds with a few large contractors.
USSF Capt. Andrew Ermitano, military deputy for SpaceWERX Ventures, explained that their investment strategy is now more focused on specific mission needs identified by SSC's Program Executive Offices (PEOs). This ensures that commercial innovation is directly applied to solving military capability gaps.
Accelerating Prototyping and Fielding
One of the most significant changes is the emphasis on speed. The Space Force is using specialized contracting vehicles to move projects from concept to award in months, not years. The Space Enterprise Consortium (SpEC) is a prime example of this accelerated approach.
Managed by SSC, SpEC is a consortium of 650 member companies, 68% of which are non-traditional defense contractors. It uses OTAs to focus on rapid prototyping of space systems. Since its start in 2017, SpEC has facilitated 140 awards with a total value of $4.5 billion.
Case Study: The R-GPS Program
The Resilient Global Positioning System (R-GPS) program highlights the effectiveness of this new model. Tasked with developing a new fleet of small, resilient GPS satellites, SSC used the Department of Defense's "Quick Start" authority to begin work without waiting for the annual budget cycle.
Using the SpEC OTA vehicle, the R-GPS project went from solicitation to award in just 71 working days. According to Adrian Torres, SSC SpEC program manager, this rapid timeline is becoming the new standard.
"Innovative contract awarding mechanisms, like SpEC, are what is needed to stay ahead of the competition in today’s race for space superiority," Torres stated. He added that leadership has made it clear that such timelines are the new norm.
The Power of Sustained Competition
A core principle of the new acquisition strategy is maintaining competition throughout a program's lifecycle. IDIQ contracts have become a popular tool for achieving this. By awarding a contract to multiple vendors, the government can hold ongoing competitions for specific tasks or delivery orders.
This prevents being locked into a single provider for production and long-term sustainment. "Competition seems to be the ‘secret sauce’ to a lot of the advances we’ve had in the last five years," Riedel shared.
The pLEO Contract Example
A recent IDIQ contract for proliferated Low Earth Orbit satellite services illustrates this approach. Initially awarded to 16 vendors with a $900 million ceiling, the contract was expanded within a year to 20 vendors with a ceiling of $13 billion. This flexibility allows the SSC to adapt to new technologies and providers as the market evolves.
Clare Hopper, chief of SSC’s Commercial Satellite Communications office, described the pLEO IDIQ as "ground-breaking" because it aggregates demand across the Department of Defense for new commercial services like high-speed broadband and space domain awareness.
By moving to this dynamic, competitive, and commercially-focused model, Space Systems Command aims to deliver advanced space capabilities faster and more efficiently, ensuring the U.S. maintains its advantage in an increasingly contested domain.