The ax has become an important part of the Space Force’s arsenal

This is Part 1 of a two-part series on the military's secretive Space Rapid Capabilities Office.

ALBUQUERQUE, New Mexico—For decades, America's big defense contractors have known they can count on a steady flow of business from the Pentagon. You win some, and you lose some. But don't fret. Inevitably, there's a new opportunity to get money from the world's largest military.

This paradigm is shifting with the launch of a wave of startups eager to deliver software, missiles, drones, satellites, and other services. It's no surprise that the US military is often the core market for these companies.

Since its establishment more than five years ago, the Space Force inherited many of the old ways of doing business ensconced at the Pentagon since World War II. Over the last half-century, numerous defense contractors merged and acquired one another, often escaping scrutiny by promising efficiencies that will result in savings for US taxpayers. Those efficiencies rarely materialized.

A fresh set of eyes

The newest military service wants to chart a new path in how the Pentagon buys weapons and services. Over the last decade, military officials have chartered organizations nationwide to seek new technologies that could give US forces the edge over potential adversaries like China and Russia. These include outfits like the Defense Innovation Unit, the Space Development Agency, and an organization named Space Safari.

One of these new enterprises is called the Space Rapid Capabilities Office (Space RCO). Headquartered at Kirtland Air Force Base in Albuquerque, New Mexico, the office is "charged with rapidly delivering first-of-their-kind operational space capabilities that protect space assets and defend joint forces from space-enabled attack," according to a Space Force fact sheet. "The office is organizationally optimized to deliver space systems on operationally relevant timelines, with the right authorities, structure, and talent required to do so."

Kelly Hammett, director of Space RCO, summed it up this way: "We're supposed to deliver the 'first of' capabilities that are operationally useful on an accelerated timeline. That's been very difficult to do. Space acquisition is a hard business for physics reasons, but also for security reasons, for tech-based reasons, supply chain reasons, all kinds of things.

"My experience in the last three years as a director of Space RCO is, both internal to our portfolio and across the greater space enterprise, we've done a pretty miserable job of delivering, on shorter timelines, the capabilities that we want," he said.

Earlier this month, Ars attended a Space RCO "pitch day" in Albuquerque. where government officials listened to briefings from 10 companies on how they propose helping future military satellites detect threats against them and potentially escape danger during a war that could extend to or start in space. Space RCO used the event to learn what cutting-edge technologies private space companies are already working on. The companies involved were Active Vigilance, Turion Space, Digantara, Anduril, Geost, Impulse Space, Raptor Dynamix, True Anomaly, TRL11, and BlackVe.

Officials told Ars this was the first time a journalist has attended one of these Space RCO events. We'll have another report Friday detailing why the Space Force thinks it needs these capabilities and what the companies proposed. It was an enlightening affair because the government has long kept much of what the Space Force and Space RCO do under wraps.

"Most of what we do is highly classified," Hammett said. "We are getting to the point where we are now delivering systems and capabilities, and my ability to talk about some of those things is being restricted a little bit more due to operational security considerations."

So, don't expect an answer to what Satellite X is doing in space right now. However, as Ars has previously reported, the Space Force is getting more comfortable talking about plans for protecting its satellites in orbit, and potentially attacking other spacecraft owned by adversaries. Space assets are already part of the military's surveillance network, providing early warning, navigation, and secure communications to US and allied forces since the dawn of the Space Age. These are all robotic platforms. The Space Force doesn't have its own cadre of astronauts.

Out in the open

What's new is, it's now more fashionable to discuss the prospect of space warfare in public, a rhetorical shift that seemed to take off last year. That doesn't mean the Space Force is ready to give up the goods. Space RCO's budget is classified, and it has disclosed only a handful of its programs, such as a new cloud-based architecture to command and control military satellites and an effort to develop portable ground terminals with commercial technology to jam enemy satellite signals.

Space RCO is modeled on the Air Force Rapid Capabilities Office, whose programs include the X-37B spaceplane and the B-21 Raider strategic bomber.

"A lot of what I do is not disclosable in the public until we make a shift, which the department is in the process of," Hammett said. "We'll take the lead from this administration. ... We're, as a department and as a service, working through how can we talk about more of this stuff more publicly. But we don't have all that guidance in effect. So that can hamstring some of the conversations."

The Space Force's greater openness and an appetite for cost-cutting are combining to imperil the grip of the nation's major defense contractors. If programs aren't as secret, space companies don't need the highest security clearances to bid on contracts. And many of these startups are backed by wealthy founders or venture capital.

The question Hammett asks today is: Why should the government pay for something billionaires are already funding?

While SpaceX led the way in revolutionizing the commercial launch business, a new wave of companies is vying to supply the military with missiles, interceptors, surveillance data, and, as Ars learned at the recent Space RCO pitch day, sensors, propulsion, and space-based AI to shield satellites from attack.

Unafraid of the blade

The 10 companies that participated in the recent pitch day are relative newcomers to the space industry. All but one are under eight years old, and most have fewer than 200 employees.

In preparation for the event, Hammett said his office culled a list of 62 interested companies down to 10. The initial list included small firms and traditional military contractors, often called "defense primes" in the arcane world of government acquisition. While Hammett didn't name those companies, chances are you've heard of them. For reference, the Pentagon's five largest contractors are Lockheed Martin, RTX (formerly Raytheon), Northrop Grumman, General Dynamics, and Boeing.

"All those traditional primes opted out of this event, every single one," Hammett said. "We're cultivating an A-team who's willing to work with us, who's hungry, who wants to bring affordability and speed, and it's not the existing industry base."

Hammett's office didn't set out to banish the big defense contractors. Simply put, he said they haven't performed or aren't interested in going in the direction Space RCO wants to go.

“I’ve terminated 11 major contracts in less than three years," Hammett said. "Eighty-five percent of those were with traditional defense primes." Most of these programs are classified, so it doesn't become news when a contract is canceled.

"We try to fix the programs," Hammett said. "We work with the performers, but if they can't get right, and if we have program baselines where they're now exceeding it by 100 percent in cost or schedule... we're going to fire them and start again."

At the same time, venture-backed companies seem to emerge every day from the ether of Silicon Valley or one of the nation's other tech corridors.

"There's a lot of opportunity to bring other performers into the portfolio, but there are lots of barriers," Hammett said. One of those barriers is that leadership at many startups don't have a security clearance. Many small companies don't use the certified accounting systems the government usually requires for federal contracts. 

"You have to be willing to modify your approach, your acquisition strategies, those types of things, so I have directed my team to open the aperture, to find the A-team, wherever the A-team lives, because it doesn't seem to be in our current portfolio," Hammett said.

There's still a place for the Pentagon's incumbent contractors, according to Hammett. Small companies like the ones at Space RCO's pitch lack the national, or even global, footprint to execute the military's most expensive programs.

"We're trying to build the first of something new, different, at a price point that we can accept," Hammett said. "That's what these types of companies are trying to do. And we're not having to pay the lion’s share of the cost for that because VC [venture capital] firms and others are kick-starting them."

Executives at Lockheed Martin, Northrop Grumman, Boeing, and other traditional defense companies have become warier of bidding on government programs, especially fixed-price contracts where financial risk is transferred from the government to the contractor.

The CEO of L3Harris, another established defense contractor, said in 2023 that his company has also declined to bid on fixed-price development contracts. L3Harris leads development of a software system called ATLAS to manage data from a network of sensors tracking rocket launches and objects in orbit. The program is over budget and was supposed to be ready for action in 2022, but it still isn't operational.

RTX is in charge of another troubled military space program. The Next-Generation Operational Control System, known as OCX, is designed to allow military forces, including airplanes, ships, and ground vehicles, to access a jam-resistant GPS signal that satellites have been beaming from space since 2005. Twenty years later, the military's weapons systems still haven't widely adopted this M-code signal because of OCX delays.

Both programs are managed by Space Systems Command, the unit that has traditionally been responsible for buying hardware and software for military space programs. SSC, too, hasn't shied away recently from taking the hatchet to some problem projects. Last year, SSC confirmed it kicked RTX off a program to develop three next-generation missile warning satellites because it was over budget, behind schedule, and faced "unresolved design challenges."