Why military contracts are crucial for companies

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As Americans celebrate our independence this week, I am reminded of the intrinsic but perhaps little-understood connection between space and US national security.

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

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

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

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

The top pure space companies derive significant, if not the majority, of their revenue from military work through contracts from the US and its allies. And often these military space deals represent “we did it” moments for companies – period Rocket Lab CEO Peter Beck told me earlier this year when his company won a spot in the $10 billion PWSA Sweepstakes.

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

And the importance of military contracts is also moving further upstream as venture capital focuses more on startups that win and fulfill early military contracts.

Global conflicts, such as Russia’s invasion of Ukraine or rising tensions in China and Taiwan, further highlight the importance of space capabilities to the world’s militaries – whether the US or its adversaries.

So when you tuck into a few hotdogs tomorrow and look up at the local fireworks display, it’s worth remembering why what’s up there is so important to the military about what’s down here — and that includes seemingly unrelated parts of the universe, such as private space stations or back to the moon.

Happy Fourth of July!

• NASA and Boeing are delaying the Starliner’s return by “weeks” for further testing of the thrusters, the agency and company announced. They have not yet set a new target date and plan to wait until the completion of the spacecraft’s thruster technology test campaign at White Sands, New Mexico. – CNBC
• SpaceX and NASA misjudged the risk of space debris reaching earth, as the numerous incidents of debris surviving reentry highlight the need to re-analyze the problem of the “survival” of spacecraft parts. – Ars Technica
• Chinese company accidentally launches Falcon 9 rocket during testing: Space Pioneer was conducting a static fire test of the booster of its Tianlong-3 rocket, but the booster unexpectedly broke free and flew for about a minute before falling back to earth in a fireball. – SpaceNews
• SpaceX to use Dragon-based design for US Deorbit Vehicle, according to a NASA official, who said the company will need to make “some modifications and some changes to the hull” in order 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 did not pay the full amount before booking the expensive lunar trip to the moon. – Information
• Amazon postpones Kuiper commercial launches until Q4, after previously targeting the first half of this year. – Via satellite
• The report says Europe lags far behind the US in venture funding for space launchesand a survey of the EU credit arm found that venture capital investors in the regions have a negative view of fundraising. – SpaceNews
• The crew of the Mars simulator left the station after more than a yearafter 378 days they left the confines of their environment at NASA’s Johnson Center in Houston. – NASA
• Former cryptocurrency group SERA is planning a reality TV competition for seats on a Blue Origin space flightThe Space Exploration and Research Agency (SERA), formerly known as the Crypto Space Agency, has purchased a future New Shepard flight and will hold a public competition for six seats, the group announced. – Space.com

• SpaceX awarded NASA a $69 million 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 delivers Blue origin and Stoke to the OSP-4 launch program, operated by the Space Systems Command (SSC). OSP-4 represents a wide range of rocket companies bidding for contracts for experimental or small-payload missions. – Space Force
• Spanish rocket company PLD Space is offering free satellites on the first two launches as part of the company’s MIURA 5 Spark program. The company said small satellite organizations can submit bids to launch two demonstration flights of the MIURA 5 rocket in 2025 and 2026 with “standard launch services free of charge.” – PLD universe

• Virgin Galactic will regain compliance with the NYSE listing after the company completed a 1:20 reverse stock split last month. – Virgin Galactic
• Momentum the board members lend the company $500,000, with the six directors jointly issuing secured notes to be “first used to pay retained employees”. – Momentum
• Malfunction of German spy satellites manufactured by OHB: Two OHB satellites for the SARah network have 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, joins the company from Terran Orbital, where he was vice president of technology. – Aerospacelab
• Lee Levy joins advisory board of space mining startup Lunasonde, a former Air Force general who also served on a NASA advisory board. – Lunar probe
• Andre Douglas named NASA Artemis II backup astronaut, a role he will fill if one of the agency’s three main crews on a mission is unable to fly. Douglas graduated from the astronaut training program in March. – NASA

• July 4: Firefly Alpha launches NASA’s VCLS demonstration mission from California.
• July 7: SpaceX Falcon 9 launches Starlink satellites from California.
• July 7: A SpaceX Falcon 9 launched the Turksat 6A satellite from Florida.
• July 9: Arianespace Ariane 6 begins its inaugural flight from French Guiana.
• July 10: NASA’s Starliner astronauts hold a press conference in space from the International Space Station.