Space Exploration Technologies Corporation (SpaceX) is a spacecraft manufacturer, launcher, and satellite communications company founded by Elon Musk in 2002. The company is known for flagship programs like the Starlink constellation satellite, the Falcon orbital launch vehicle series, and the Dragon crew and cargo spacecraft series. SpaceX has approximately 12,000 employees and is headquartered in Hawthorne, CA with offices across the U.S. located strategically near launch facilities including, but not limited to, Cape Canaveral, FL and Boca Chica, TX.
SpaceX’s Primary Federal Customers
SpaceX’s top federal customers by spending value are the National Aeronautics and Space Administration (NASA), the U.S. Department of the Air Force’s U.S. Space Force, and the Space Development Agency (SDA). As of October 2022, SpaceX is the second largest NASA contractor (by contract spending), behind only the California Institute of Technology (Caltech). SpaceX has already managed to achieve a meaningful market share in both civil and military space markets.
Outside of these three customers, SpaceX’s federal contracting footprint is understandably limited.
A sample of SpaceX’s top federal contracts include the following:
- National Aeronautics and Space Administration (NASA), Kennedy Space Center (KSC), Gateway Logistics Services (GLS) Contract – In March 2020, the National Aeronautics and Space Administration (NASA) awarded a 15-year, $7 billion ceiling value contract to SpaceX for Gateway logistics services. SpaceX will deliver critical pressurized and unpressurized cargo, science experiments and supplies to the Gateway, such as sample collection materials and other items the crew may need on the Gateway and during their expeditions on the lunar surface. The Gateway is a vital component of NASA’s Artemis program and will serve as a multi-purpose outpost orbiting the Moon providing essential support for long-term human return to the lunar surface and serving as a staging point for deep space exploration.
- National Aeronautics and Space Administration (NASA), Kennedy Space Center, Commercial Crew Transportation Capability (CCtCap) Contract – In May 2020, NASA awarded a seven-year, $2 billion IDIQ to SpaceX for commercial crew space flights to the International Space Station (ISS). The Commercial Crew Transportation Capabilities (CCtCap) contract encapsulates human space flight operations conducted through commercial methods on behalf of NASA. SpaceX will use its Dragon Spacecraft to conduct operations and is currently developing Dragon v2 with the backing of NASA.
- U.S. Department of the Air Force, U.S. Space Force (USSF), Space Systems Command (SSC), National Security Space Launch Phase 2 Contract – In August 2020, the United States Space Force (USSF) awarded SpaceX a seat on an eight-year, $3.3 billion IDIQ for space launch services supporting the National Reconnaissance Office (NRO). Under this contract, SpaceX was assigned the USSF-67 launch, which successfully delivered a military communications satellite into orbit in January 2023.
- U.S. Department of Defense, Space Development Agency (SDA), Vandenberg Space Force Base Launch Services – In December 2020, SpaceX was awarded a 2.5-year, $150 million contract to provide launch services from Vandenberg Space Force Base for the SDA’s Tranche 0 Transport and Tracking Layer satellites. In April 2023, SDA announced the successful initial launch of the satellites using SpaceX’s Falcon 9, which provide low-latency communication links to support the warfighter.
Space Launch Market Dynamics
SpaceX versus the Competition
A key differentiator between SpaceX and other competitors in this space (namely, Boeing and Lockheed Martin through their United Launch Alliance JV) is SpaceX’s focus on reusability. While most rockets are designed to burn up upon reentry, SpaceX rockets can withstand the reentry process and land back on Earth to be used again, reducing the cost of launch significantly.
In addition to more advanced reusability, SpaceX has seen increased market share due to failed launch tests by the United Launch Alliance (ULA). ULA has launched just one rocket this year, compared with nearly 50 launched by SpaceX. This has caused federal customers to ask SpaceX to step in to perform the mission because of delays from failed tests.
Recently Approved Launch Site
In April 2023, SpaceX won approval from the U.S. Space Force (USSF) to add a fifth U.S. rocket launch site at Vandenberg Space Force Base. SpaceX already operates one launchpad from this site, which they have used since 2013. In addition to these two launch sites, SpaceX utilized their own private Starbase site in Boca Chica, Texas along with sites at the Kennedy Space Center and Cape Canaveral Space Force Station in Florida. The company uses their headquarters location in Hawthorne California for their build facility.
Acquisition of Swarm Technologies
In August 2021, SpaceX announced the acquisition of Swarm Technologies, a satellite data start-up, in hopes to strengthen the growing Starlink internet service. Swarm operates a constellation of 160 small satellites providing internet-of-things services. These satellites primarily provide two-way communications at low data rates for markets such as agriculture, energy, and transportation. Swarm is SpaceX’s first and only publicly announced acquisition in the company’s 21-year history.
Prior to the acquisition, one of Swarm’s biggest challenges in terms of speed of deployment and growing its satellite network was the ability to launch its satellites. Under the SpaceX umbrella, Swarm has greatly enhanced its access to launch services. Being about the size of a sandwich, Swarm’s satellites can hitch a ride on SpaceX launches used for other customers.
SpaceX and Swarm have an overlap in their customer base, which may allow for cross-selling opportunities. Further, we may see a pairing of the Starlink system and Swarm’s satellite network sometime in the future; however, Swarm’s satellites operate in a different frequency band than SpaceX’s Starlink satellites. It has been speculated that SpaceX’s new argon-powered Hall thrusters (as opposed to xenon-powered), which power the Starlink V2 mini satellites, were developed using the expertise and intellectual property brought on by Swarm.
The FedSavvy Strategies Takeaway
- SpaceX has scooped up a significant market share with NASA’s launch services contracts over the past decade supporting missions related to cargo delivery, commercial crew spaceflights and more.
- They have realized success in both civil and military space markets.
- SpaceX is poised to continue dominating the launch market, with many of the nearest competitors still years behind in developing their own reusability technologies.
- Competitors like Boeing and Blue Origin still struggle to routinely facilitate launches.
- The Swarm acquisition adds talent and intellectual property which are likely leveraged to improve SpaceX’s Starlink constellation.
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