The firm-fixed price agreement is valued at $515 million USD, a substantial commitment that underscores Rocket Lab's growing stature in the field. As the prime contractor, Rocket Lab will lead the design, development, production, testing, and operations of these satellites, including the procurement and integration of payload subsystems. This contract is not just a financial milestone but also establishes Rocket Lab's position as a leading satellite prime contractor, enhancing supply chain diversity for the Department of Defense (DoD) through its comprehensive vertical integration strategy.
Rocket Lab National Security (RLNS), a wholly owned subsidiary of the company, will execute the contract. This entity was specifically created to cater to the unique needs of the U.S. defense and intelligence community and its allies. The contract encompasses a $489 million base with an additional $26 million allocated for incentives and options.
The Space Development Agency is strategically procuring satellites in two-year "tranches" to build a proliferated constellation in Low Earth Orbit (LEO). This approach is intended to deliver critical space-based capabilities to support joint military operations. The T2TL - Beta satellites, integral to the Tranche 2 program, will be incorporated into SDA's Transport Layer. Their role is to provide assured, resilient, and low-latency military data and connectivity across the globe, addressing the pressing needs of the DoD.
Peter Beck, the founder and CEO of Rocket Lab, expressed enthusiasm about this new chapter in the company's journey. "This contract marks the beginning of Rocket Lab's new era as a leading satellite prime. We've methodically executed on our strategy of developing and acquiring experienced teams, advanced technology, manufacturing facilities, and a robust spacecraft supply chain to make this possible. It's exciting to now be delivering this capability for government and commercial customers alike," he remarked.
Beck also highlighted the alignment of Rocket Lab's capabilities with SDA's acquisition approach, which emphasizes speed, schedule certainty, and affordability to deliver next-generation space capabilities. "We've proven Rocket Lab is capable of delivering this across our launch and spacecraft programs and we look forward to delivering it for SDA," he added.
A key aspect of Rocket Lab's strategy is its high degree of vertical integration. The company will utilize in-house built subsystems and components for all 18 satellites, including solar panels, structures, star trackers, reaction wheels, radio, flight software, avionics, and launch dispenser. This level of control over the supply chain is relatively rare in the industry and is pivotal for ensuring efficiencies and certainty in cost, schedule, and quality.
The satellites will be constructed at Rocket Lab's advanced spacecraft development and manufacturing complex at the Company's Long Beach headquarters. This facility boasts a 12,000 sq. ft. cleanroom and 40,000 sq. ft. of production and test facilities, designed to support constellation class manufacturing. The facility is equipped to handle satellite assembly, integration, and testing for various customers, including those in commercial, civil, and national security sectors. The scheduled launch of these satellites is set for 2027.
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