<body><div><ul><li>Space Force initiated a new missile defense satellite project in 2021 called the Proliferated Warfighter Space Architecture program.</li><li>More than half a dozen companies have so far won contracts on this program, whose value is soaring well past $10 billion.</li><li>Space Force will soon open bidding on Tranche 3 of the project, and could award contracts in excess of $4 billion.</li></ul>It costs a lot of money to build a missile defense satellite system. For space stock investors, that's good news.It's been four years since the U.S. Space Force (or more precisely, the Space Development Agency within USSF) announced it was building a new missile defense system out of concentric planes of orbiting "tracking" and "transport" satellites. Since then, it's only launched 27 satellites -- roughly 6% of the 477 it wants.This slow start isn't discouraging Space Force from awarding even more contracts, however.To date, the Proliferated Warfighter Space Architecture, or PWSA, program has awarded contracts for just under 500 satellites to be deployed through "tranches" numbered 0 through 2. Tranche 0 satellites are mostly all deployed now, and Tranche 1 launches should begin next year, with Tranche 2 to follow in 2026.Before the vast majority of those satellites even launch though, Space Force invited America's space companies last week to begin preparing bids for a third tranche of PWSA satellites, which could grow the fleet to nearly 700 satellites. (The number will then begin trending down, as Tranche 0 and 1 satellites begin to age out of service and are removed from orbit.)As SpaceNews reported last week, Space Force plans to begin accepting bids on Tranche 3 next year. Judging from past tranches, this promises to be a sizable contract -- probably on the order of $4 billion or more -- and with multiple winners. <figure><img src="https://img.particlenews.com/image.php?type=thumbnail_580x000&amp;url=2KP7op_0wET3cgm00" alt="https://img.particlenews.com/image.php?url=2KP7op_0wET3cgm00" width="2000" height="1054" ><figcaption>Image source: Getty Images.</figcaption></figure><h2>Building a missile defense system will be a step-by-step process</h2>Tranche 0: PWSA began with the Tranche 0 satellites that started launching in April 2023. In total, it includes 20 transport layer communications satellites built by York Space Systems and Lockheed Martin (LMT -6.12%) and eight tracking layer satellites built by SpaceX and L3Harris (LHX -1.30%). Tranche 1: Tranche 1 satellites will begin launching later this year, or perhaps in early 2025. Eventually, Tranche 1 will include 126 transport layer satellites, built by York, Lockheed, and Northrop Grumman (NOC -1.78%). Thirty-five tracking layer satellites will be built by Northrop, L3Harris, and RTX (RTX -0.29%). An additional 18 "experimental" tactical demonstration satellites (called T1DES) are also planned. Tranche 2: Things really kick into high gear with Tranche 2 launches in 2026. In total, this part of the project will add approximately 270 transport layer and tracking layer satellites, according to USSF. Lockheed and Northrop were tapped to build the first 72 transport layer satellites -- 36 each -- for $1.55 billion. Rocket Lab (RKLB -0.89%) subsequently won a contract to build 18 transport layer satellites for $515 million. Then Lockheed was awarded 18 more satellites (for $890 million), as was L3Harris (for $919 million), and also privately held Sierra Space (for $740 million). Tranche 3: If you add all of the above up, we're now at 477 satellites total -- and rising. Tranche 3 will grow the fleet by a further 200 satellites, with launches beginning in 2028, as Space Force introduces new and improved satellites featuring better "coverage, sensitivity, and accuracy of missile warning, tracking, and defense capabilities; coverage, resilience, and capacity of tactical data links," as well as resilience, accuracy, and autonomy. (This last point appears to imply that artificial intelligence will be involved.) Assuming Tranche 3 is awarded as the previous rounds were, the work -- and the revenue -- should be parceled out fairly even-handedly across a wide variety of space contractors.<h2>So how much money are we talking about here?</h2>It's hard to say exactly how much this part of the project will cost, as each contract awarded up till now has been for a different value, depending on who won the contract and how many satellites they were asked to build. There doesn't appear to be a comprehensive list anywhere of who won how much money to build what. We do know that Lockheed's and Northrop's first Tranche 2 satellites averaged about $21.5 million per satellite. Rocket Lab's cost, on the other hand, was closer to $28.6 million per satellite, while L3Harris will be paid the princely sum of roughly $51 million per satellite.Investors can therefore safely assume the Tranche 3 awards will average at least $21.5 million per satellite. With 200 satellite contracts up for grabs, that makes this next tranche a $4.3 billion revenue opportunity -- minimum. And with $21.5 million being only the lowest price paid so far, it's likely the money will be even bigger than that.Plus, SpaceNews notes that the Space Force's expected lifespan for each of these satellites is only about five years. So even if the entire constellation maxes out around 500 or 600 satellites (it won't, by the way, because a Tranche 4 is contemplated after Tranche 3), the long-term revenue opportunity here would presumably be in the neighborhood of $2.15 billion per year (500 satellites, times $21.5 million per satellite, divided by five years).Again, minimum.All of which is to say that, while we don't yet know who will win the Tranche 3 contracts, we do have a good idea of who will be bidding on them -- Lockheed, L3Harris, Northrop, Rocket Lab, RTX, and York -- and how much money is at stake. With hundreds of millions of dollars in annual revenue likely for each of the winners, I'll be watching closely to see which companies win, and how much.</div></body>

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Space Force Prepares to Spend Billions More on Its Multibillion-Dollar Missile Defense System

Space Force initiated a new missile defense satellite project in 2021 called the Proliferated Warfighter Space Architecture program. More than half a dozen companies have so far won contracts on this program, whose value is soaring well past $10 billion. Space Force will soon open bidding on Tranche 3 of...