Why military contracts are crucial for companies

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My impression is that – outside of the industry – when most people hear “space,” or think about “investing in space” for that matter, it comes with connotations of science, exploration, astronauts, and maybe some Hollywood-corrupted-visuals of alternative Space Shuttles.

But the reality is that space has been what the Pentagon calls a “warfighting domain” from the very start. The first orbital rockets, satellites, and even the Apollo architecture were born of the military and its aerospace contractors. The U.S. Space Force, which has been around for less than five years, already has a bigger annual budget than NASA, even though the latter is old enough to be the Space Force’s grandfather and holds a coveted position as one of the most beloved federal agencies.

Even among the NASA corps, you’re as likely to find “combat flight hours logged” among the astronauts’ resumes as anything else.

Historically, the biggest defense contractors have long been the winners of the largest space contracts – and that’s still true today. SpaceX has earned a coveted spot in that role for the military, whether it’s launching rockets for Space Force or building satellites for the NRO.

The top pure-play space companies get a significant, if not majority, amount of revenue from military work under contracts from the U.S. and its allies. And often, these military space deals represent “we made it” moments for companies – a point Rocket Lab CEO Peter Beck made to me earlier this year when his company got a seat in the $10 billion PWSA Sweepstakes.

“This is really our foray into the world of being a [defense] prime … it basically doubles the company’s backlog overnight with one contract,” Beck told me at the time.

And the importance of military contracts is also going further upstream, as venture capital looks more explicitly toward startups that are winning and delivering on early military deals.

Global conflicts like Russia’s invasion of Ukraine, or the brewing tensions of China and Taiwan, further highlight the importance of space-based capabilities to the world’s militaries – whether that’s the U.S. or its adversaries. 

So as you tuck into some hotdogs tomorrow and look to the sky for your local fireworks, it’s worth recognizing why what’s above is so important to the military for what’s down here – and that includes seemingly unrelated parts of space, like private space stations or going back to the moon.

Happy Fourth of July!

• NASA and Boeing are delaying Starliner’s return by ‘weeks’ for more thruster testing, the agency and company announced. They did not yet set a new target date and plan to wait until completing a test campaign of the spacecraft’s thruster technology at White Sands, New Mexico. – CNBC
• SpaceX and NASA misjudged the risk of space junk reaching the ground, as multiple incidents of debris surviving reentry highlight the need to reanalyze the issue of “surviviability” of spacecraft parts. – Ars Technica
• Chinese company accidentally launches Falcon 9-sized rocket during testing: Space Pioneer was performing a booster static fire test of its Tianlong-3 rocket, but the booster unexpectedly broke free and flew for about a minute before impacting back on the ground in a fireball. – SpaceNews
• SpaceX to use Dragon-based design for U.S. Deorbit Vehicle, according to a NASA official who said the company will have to make “some modifications and some changes to the trunk” for the spacecraft to guide the ISS through reentry. – Read more
• Japanese billionaire Yusaku Maezawa’s canceled Starship contract was worth $500 million, but Maezawa reportedly didn’t pay that full amount before canning the dearMoon lunar trip. – The Information
• Amazon delays Kuiper commercial launches to Q4, after previously targeting the first half of this year. – Via Satellite
• Report says Europe lags far behind U.S. in venture funding for space startups, and a survey by the EU’s lending arm found that the regions’ VC investors have a negative outlook on fundraising. – SpaceNews
• Mars simulator crew to exit habitat after over a year, leaving the the confines of their environment at NASA’s Johnson center in Houston after 378 days. – NASA
• Former cryptocurrency group SERA plans reality TV competition for seats on a Blue Origin spaceflight: The Space Exploration and Research Agency (SERA), previously known as the Crypto Space Agency, bought a future New Shepard flight and will have a public competition for the six seats, the group announced. – Space.com

• SpaceX awarded $69 million NASA contract to launch the COSI telescope in August 2027 on a Falcon 9 rocket. COSI (Compton Spectrometer and Imager) is a wide-field gamma-ray telescope. – NASA
• Space Force adds Blue Origin and Stoke to OSP-4 launch program, which Space Systems Command (SSC) runs. OSP-4  features a wide variety of rocket companies bidding for contracts of experimental or small payload missions. – Space Force
• Spanish rocket company PLD Space offers free satellite rides on first two launches under the company’s MIURA 5 Spark Programme. The company said that organizations with small satellites can submit bids to launch the two MIURA 5 rocket demonstration flights in 2025 and 2026, with “standard launch services at no cost.” – PLD Space

• Virgin Galactic regains NYSE listing compliance after the company completed a 1-for-20 reverse stock split last month. – Virgin Galactic
• Momentus board members lend company $500,000, with the six directors together issuing secured notes that are “to be used first for the payment of earned employee retention payments.” – Momentus
• OHB-built German spy satellites malfunction: Two OHB satellites for the SARah network failed to deploy their antennas, with the German military saying the company will be responsible for building two replacements. – Ars Technica

• Michael Pavloff joins Aerospacelab as Deputy CTO, joining the company from Terran Orbital where he was VP of Technology. – Aerospacelab
• Lee Levy joins space mining startup Lunasonde’s advisory board,  a retired Air Force general who also served on NASA’s Advisory Council. – Lunasonde
• Andre Douglas named as Artemis II backup astronaut by NASA, a role he will fill if one of the agency’s three primary crew on the mission are unable to fly. Douglas graduated from the astronaut training programming March. – NASA