Space Development Agency awards $1.5 billion to Lockheed Martin and Northrop Grumman for 72 satellites

The Space Development Agency announced Aug. 21 it awarded contracts worth $1.5 billion to Northrop Grumman and Lockheed Martin to build and operate 72 satellites. The Space Development Agency (SDA), an organization under the U.S. Space Force, is building a mesh network of military satellites in low Earth orbit. The 72 satellites will make up a portion of SDA’s network known as Tranche 2 Transport Layer. SDA is building a large constellation called the proliferated warfighter space architecture that includes a Transport Layer of interconnected communications satellites and a Tracking Layer of missile-detection and warning sensor satellites. Northrop Grumman’s contract for 36 satellites is worth approximately $733 million. The agreement with Lockheed Martin, also for 36 satellites, is worth $816 million, SDA said. Transport Layer Tranche 2 “will provide global communications access and deliver persistent regional encrypted connectivity in support of warfighter missions around the globe,” the agency said. The 72 satellites ordered from Lockheed Martin and Northrop Grumman are the “Beta” portion of Tranche 2 Transport Layer. They will be deployed in orbital planes of 12 satellites each, with the first plane projected to launch in September 2026.

Rendering of the Space Development Agency’s Tranche 2 Transport Layer-Beta data transport satellites. Credit: Northrop Grumman

Commercial-like model

SDA uses a commercial-like model to acquire satellites, incrementally adding new technologies as they become available, in contrast to DoD’s traditional method of funding one large acquisition over many years.

“We are now solidly in the procurement phase for Tranche 2 of the PWSA to support a 2026 delivery,” said Derek Tournear, SDA director. “Tranche 2 brings global persistence for all our capabilities in Tranche 1 and adds advanced tactical data links and future proliferated missions.

The Beta variant of the Tranche 2 Transport Layer vehicles are similar to the 126 Tranche 1 Transport Layer satellites that SDA ordered last year from Northrop Grumman, Lockheed Martin and York Space.

The Tranche 2 contracts make Lockheed Martin and Northrop Grumman the largest awardees of SDA satellite contracts. In February 2022, SDA selected Lockheed Martin, Northrop Grumman and York Space Systems to each produce 42 satellites for the Tranche 1 Transport Layer. Northrop Grumman in July 2022 also won a contract for 14 missile-tracking satellites for SDA’s Tracking Layer Tranche 1.

To date Lockheed Martin has won SDA contracts for 88 satellites and Northrop Grumman has won orders for 92 satellites.