Astronomy Prints 🌌: Trump team signals defense contracting shake-up

11/26/2024

National security insights for space professionals. Delivered Tuesdays.

Welcome to this week's edition of SpaceNews Military, your concise source for the latest developments at the intersection of space and national security. In this issue, we cover:

- Space execs predict government contracting shakeup

- DoD scrambling to address supply chain issues

- Sen. Joni Ernst proposes a trillion dollars in government cuts

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Space & defense brief 🛰️

Trump team eyes 'cost minus' defense model as tech sector gains influence

Industry executives predict disruption to traditional defense procurement as Trump's incoming administration signals closer ties to tech billionaires and commercial space players.

The buzz from last week's Baird Defense & Government Conference in McLean, Va.: A "cost minus" approach could challenge the "cost plus" contracting model, according to one executive familiar with the thinking in the incoming administration.

THE BIG PICTURE: Tech entrepreneurs have access to power through VP-elect JD Vance's venture capital connections and Elon Musk's role as government reform czar. They want to reshape how the Pentagon does business.

"These entrepreneurs are in their ear," says Umbra Space co-founder Gabe Dominocielo, describing the influence of figures like Palantir's Peter Thiel and Anduril's Palmer Luckey on the transition team.
Space industry execs expect SpaceX's success to serve as a model for disrupting traditional programs.

REALITY CHECK: The cultural divide between Silicon Valley and the Pentagon remains stark. Former Space Force chief Gen. John Raymond, now at Cerberus Capital, notes: "We speak a different language."

Government contracts still dominate space tech revenue, despite hopes for commercial growth
Current procurement systems limit integration of commercial capabilities
Congress could resist major shifts, given ties between legacy programs and local jobs.

Space Force general weighs in on supply chain woes

Supply chain disruptions plaguing military satellite programs aren't just Covid hangover — they're exposing deep cracks in the defense industrial base, said Space Systems Command chief Lt. Gen. Philip Garrant.

BOTTOM LINE: What Pentagon officials initially dismissed as temporary pandemic hiccups have morphed into a systemic crisis threatening key programs.

The Space Development Agency's ambitious low-Earth orbit constellation has become ground zero for these challenges as DoD shifts from custom satellites to mass-produced units.
"We need a lot more of those parts," Garrant said in a sit-down with reporters last week. "That's a rather simplistic view, but it's very, very factual."

BEHIND THE SCENES: SDA Director Derek Tournear has taken the unusual step of bypassing primes to work directly with lower-tier suppliers, even dangling contracts to boost production.

"We have a lot of single-source Chinese suppliers in our supply chains, and in a lot of cases, we're not aggressively doing anything about it," Carlyle Group senior advisor Frank Finelli warned at last week's Baird Defense conference.

Sen. Joni Ernst hosts Marine Corps birthday event Nov 14, 2024

Senator releases 'trillion dollars worth of ideas' for cutting government waste

Republican Sen. Joni Ernst of Iowa in a letter to Elon Musk and Vivek Ramaswamy, co-chairmen of the incoming Trump administration's Department of Government Efficiency (DOGE), outlines recommendations for reducing federal government waste and inefficiency.

"To give you a head start, here are a trillion dollars' worth of ideas for trimming the fat and reducing red ink," Ernst writes.

Here's a copy of the letter courtesy of NewSpace Nexus.

Ernst spares no agency in her critique of federal waste, and targets NASA for awarding over $500 million in bonuses to contractors involved in costly and delayed projects like the next manned moon mission.
"Today, we're spending billions on science and NASA can't even return our astronauts trapped on the International Space Station to Earth," she writes.
On defense spending, Ernst says "It's time to declare war on waste at the Department of Defense. The Pentagon has never passed an audit and is unable to fully account for its budget."

In other news 🚀

Rocket Lab announced a $23.9 million CHIPS and Science Act award from the Department of Commerce to increase its compound semiconductor manufacturing capability and capacity in Albuquerque, New Mexico.

The semiconductors produced by Rocket Lab are used in space-grade solar cells and other optoelectronic products. These require high reliability and optimum performance in extreme environments.

Rocket Lab technician during the manufacturing process of one of its space-grade solar cells at the Company's Albuquerque, New Mexico facility. (Photo: Rocket Lab)

Anduril Industries won a $99.7 million U.S. Space Force contract to modernize the Space Surveillance Network (SSN), leveraging artificial intelligence to enhance space domain awareness and threat detection.

The five-year indefinite delivery indefinite quantity (IDIQ) contract is to integrate Anduril's Lattice software to autonomously process and distribute data from a global network of military space sensors, replacing legacy systems with a more advanced architecture.

Companies and investors are calling on European governments to take more risks and buy services from space startups to make the industry more competitive with American counterparts.

"Europe has done all the hard work to get the companies up and running, but then when it comes to the growth stage, nobody's there to support them," said Daniel Biedermann, partner at Luxembourg-based NewSpace Capital. That causes companies to either stagnate as small businesses or to go elsewhere, like the United States, to continue to grow.

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