01/20/2026

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By Sandra Erwin

Welcome to this week's edition of SpaceNews' Military Space, your source for the latest developments at the intersection of space and national security. In this week's edition: Why the Pentagon's L3Harris bet has defense executives paying attention,

a space budget expert warns of contracting bottlenecks and the Air Force warns NOAA cuts would carry direct military risk.

If someone forwarded you this edition, sign up to receive it directly in your inbox every Tuesday. And we're eager to hear your feedback and suggestions. You can hit reply to let me know directly or DM me on Signal @SandraErwin.43.

As tensions over Greenland have shifted from abstract geopolitical friction to a confrontation between Washington and its NATO allies, it's worth noting that the United States already maintains a strategic military footprint on the island. Since World War II, Greenland has hosted a U.S. installation that today operates under the U.S. Space Force: Pituffik Space Base, the northernmost U.S. military facility in the world. Pituffik plays a central role in missile warning, defense and space surveillance, supporting early-warning radars and satellite tracking with Denmark's consent under a 1951 defense treaty. In this image, Gen. Stephen Whiting, commander of U.S. Space Command, visits Pituffik in early December. Credit: Courtesy image

Why L3Harris' $1B Pentagon deal is rippling across defense

The Pentagon's decision announced last week to make a $1 billion investment in L3Harris Technologies' missile business is still reverberating across the defense sector, raising fresh questions about whether Washington is moving toward a more activist role in shaping industrial outcomes — and how far Congress will allow that shift to go.

A central question is whether the L3Harris transaction becomes a one-off response to acute shortages in solid rocket motors, or a template for future government "anchor investments" in other constrained corners of the defense industrial base.

Analysts say the deal places the Pentagon closer to a long-term financial partner — even without governance rights — and could lower the bar for companies arguing that traditional procurement contracts are no longer enough to justify multibillion-dollar capacity expansions.

If the model spreads, it could mark a structural shift in how the U.S. government secures defense production — from buyer of last resort to capital partner of first resort in select industries.

Competition concerns and Capitol Hill questions

Not everyone is comfortable with the implications. Byron Callan, an analyst at Capital Alpha Partners, said the Pentagon taking a stake in a defense supplier raises questions about competition in the industrial base and whether it creates implicit "favoritism" toward L3Harris over rivals such as Northrop Grumman and Anduril Industries.

That concern could resonate on Capitol Hill, where lawmakers have historically been wary of the government holding equity exposure in defense firms — even as they push the Pentagon to fix persistent munitions and missile bottlenecks.

Wall Street reaction: de-risking production

Markets, for now, appear more sanguine. L3Harris shares jumped on the announcement, and some observers interpreted the rally as a signal that investors view the government-backed structure as de-risking the expansion of critical production capacity.

L3Harris executives have leaned into that interpretation, framing the deal as part of a broader trend toward deconsolidation and more focused defense units — a notable claim from a company that itself is the product of decades of mergers.

Vertical Partners analyst Rob Stallard said the L3Harris agreement, which is tied to spinning out the company's missile and solid rocket motor business, could serve as a template for "unlocking shareholder value" while meeting Pentagon priorities.

Could others follow?

Some analysts think the effects could extend beyond missiles. Analysts at William Blair said L3Harris' plan to spin out its missile systems unit could be replicated by other defense-adjacent companies weighing similar moves.

"The proposed L3Harris transaction may cause ViaSat to move forward," William Blair wrote in a note to investors, referring to the communications satellite operator ViaSat, which has been considering a spinout of its defense and advanced technologies division.

Unlike the L3Harris deal, the government is not expected to take an equity stake in ViaSat's defense unit. Still, Blair said such a move could unlock value tied to ViaSat's defense technologies and its global L-band spectrum holdings — without direct government capital.

For now, the L3Harris investment stands as a test case of how far the Pentagon is willing to go to secure production of critical systems, and how comfortable lawmakers and competitors are with the government stepping into an investor role.

Space budget expert warns of contracting bottlenecks

A central challenge facing the U.S. Space Force in 2026 is not a shortage of money, but a problem of execution: the service is flush with funding for modernization, yet constrained by a thinning contracting and procurement workforce that may struggle to translate those dollars into delivered capabilities at the pace its programs demand.

That is the latest assessment from Todd Harrison, a senior fellow at the American Enterprise Institute. Speaking last week on a call with industry analysts from Vertical Research Partners, Harrison said the Space Force's modernization risk in 2026 is structural rather than fiscal — an execution gap driven by the mismatch between a rapidly expanding budget and an acquisition workforce that has shrunk even as program complexity has surged.

"What I would say about space right now is they are flush with funding in the Space Force for space programs, and the challenge is really execution," Harrison commented.

The warning comes as the Space Force enters a new phase of modernization. After several years focused on standing up the service, refining doctrine and making incremental upgrades, it is now attempting to reshape the space architectures that underpin U.S. military power. That includes multiple large-scale efforts at once — spanning missile defense, communications, surveillance, navigation and command-and-control — rather than replacing satellites one-for-one.

Instead, the service is redesigning entire architectures, enabled in part by a surge of funding in recent budgets, including mandatory defense spending that supplements traditional appropriations. The result is an unusually dense pipeline of new starts and expanding programs.

New missions from space

"At the same time, you've got new programs that have started for new missions for the Space Force to do, such as ground moving target indication from space," Harrison said. "In the reconciliation bill, they got funding to do airborne moving target indication, which is also radar from space … They've already got a lot in the pipeline."

For fiscal year 2025, the Space Force's budget was about $29.4 billion — essentially flat from the prior year. But 2025 was unusual. Lawmakers also passed a reconciliation package — the "One Big Beautiful Bill Act," enacted July 4, 2025 — that included tens of billions of dollars in mandatory defense spending outside the normal appropriations process.

Roughly $13.8 billion of that reconciliation funding was counted against the Space Force's FY2026 budget picture as mandatory funding, largely for major efforts such as the Golden Dome missile defense initiative and other next-generation capabilities.

Combined with the administration's fiscal year 2026 discretionary request of about $26.1 billion, the Space Force's total planned resources approach $40 billion — about a 40 percent increase over 2025 levels when reconciliation dollars are included.

A large share of that money — roughly $7 billion or more — is slated for what the budget labels "Long Range Kill Chains" and space-based intercept capabilities. Those efforts include space-based sensors and interceptors intended to extend missile defense into and through space, and are generally tied to the broader Golden Dome layered homeland missile defense architecture highlighted by senior Pentagon leaders.

Workforce reductions

The problem, Harrison argues, is that the workforce needed to move that money has shrunk. "The way I think of it is they're almost choking on funding, and how to move forward with these programs," he said. He noted that due to DOGE-driven personnel reductions and deferred resignation programs, the Space Force lost about 20 percent of its contracting workforce.

The service has acknowledged broader impacts. Space Force leaders have told Congress it lost nearly 14 percent of its civilian workforce through early retirements, voluntary resignations and hiring freezes — roughly 780 civilian personnel — a significant hit to its acquisition and program support base.

The bottleneck matters, Harrison said, because contracting officers are the ones who "get the money moving and the programs flowing." In his view, additional funding or new program starts may only exacerbate the strain. "That's why I think right now that the last thing they need, actually, is more funding and more programs to start," he said, adding that the Space Force's budget has already almost doubled over the past five years.

Even if the service secures another funding increase next year, Harrison warned that new initiatives are likely to slip. "They're already having trouble processing what they have," he said.

FROM SPACENEWS

Managing an orbital economy as space grows more congested: In this episode of Space Minds, host David Ariosto talks with Chiara Manfletti, the CEO of Neuraspace and a professor of space mobility and propulsion at the Technical University of Munich. They discuss space debris, orbital logistics and managing a new orbital economy through new initiatives in Europe and around the world. Watch or listen now.

Pentagon's dependence on NOAA comes into focus on Capitol Hill

The National Oceanic and Atmospheric Administration, the civilian agency best known for weather forecasts and environmental monitoring, was praised last week as a critical national security asset amid proposed budget cuts.

At a hearing of the House Science, Space and Technology Environment subcommittee, a U.S. Air Force official explained why NOAA's satellites and data systems are considered indispensable to military operations.

Col. Bryan Mundhenk, the Air Force's chief of weather operations, described NOAA's capabilities as "critical and foundational" to Air Force missions worldwide and warned that key functions performed by the agency are "neither duplicated nor replicable at scale."

That reliance is the result of a long-running shift. Over the past decade, the Defense Department has pulled back from operating standalone military weather constellations. The once-central Defense Meteorological Satellite Program has aged out, and DoD has not replaced it with a like-for-like successor. Instead, military planners increasingly rely on civil and allied systems, with NOAA now serving as the backbone provider of space-based environmental data for U.S. forces.

Weather data is woven into nearly every stage of military planning. Commanders use forecasts to decide when and where operations are feasible, whether aircraft can fly, refuel, or land, and how ground forces can move and resupply. Cloud cover, winds, and atmospheric conditions also shape the effectiveness of sensors and weapons, while space weather data helps planners assess risks to satellites, communications, and navigation signals.

Cost savings for DoD

Mundhenk emphasized that NOAA's investments spare the Pentagon from duplicating those capabilities. Resources spent by NOAA are resources the Defense Department does not have to fund itself, he said, arguing that the current interagency arrangement delivers "significant cost avoidance" by providing sensing and data processing at a global scale the Air Force should not try to replicate.

That interdependence is now intersecting with budget politics. NOAA's funding was reduced in the Trump administration's proposal, though Congress has so far pushed back. The final outcome will be decided in ongoing appropriations negotiations.

At stake are both current operations and future satellite continuity. NOAA's Joint Polar Satellite System, including follow-on spacecraft such as JPSS-3 and -4, remains central to global weather forecasting. Tight budgets could squeeze those plans even as the military lacks a full replacement of its own.

New Space Force programs, including the Weather System Follow-on–Microwave and the Electro-Optical/Infrared Weather System, are intended to recover selected capabilities, but they do not match the breadth of data NOAA's polar-orbiting and geostationary satellites provide. In some cases, DoD has gone further, taking over operations of aging NOAA satellites or supporting their continued use to avoid gaps in military forecasting.

The result is that military operations that depend on accurate weather and space weather data are increasingly shaped by civilian budget and acquisition decisions, even as DoD's own replacement efforts remain incomplete.

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