Breaking Down the DoD’s $13-Billion pLEO Play
The summer slump got a jump in July 2023 when the Defense Information Systems Agency (DISA), on behalf of Space Systems Command’s (SSC) Commercial Satellite Communications Office (CSCO), rolled out a $900M IDIQ for proliferated low Earth orbit (pLEO) satellite services. The nearly billion-dollar cap seemed massive until, in a hold-my-beer-move, DISA jacked it up another 1,300%.
That’s right. In a little over a year, the award ceiling increased to a whopping $13B. For those of us who track DoD contracts like heat-seeking missiles, the surge was all but written in the Stars(hields). Back in June, Claire Hopper, the Head of the CSCO, highlighted the program’s runaway demand at the Milsatcom USA conference.
“We are burning through our procurement contract ceiling really quickly,” she said. “So, we are working with DISA right now to increase that ceiling well into the billions. We do view this contract as being a workhorse, and the demand for it is off the charts.”
Tell us you’re talking about Starshield without saying Starshield, Claire.
To clarify, the pLEO IDIQ would cover task orders for satcom services on the Starlink network, branded by the military as “Starshield.” This is distinct from the government-owned and operated satellites such as those that are now a part of the proliferated constellation that the NRO is deploying under a separate not-so-secret $1.8 billion-dollar deal with SpaceX.
If the pLEO contract is any barometer of demand, it is no wonder the military is “tripping over” Starshields. SpaceX has already snatched up 97% of the pLEO task orders. But what about the other 19 awardees?
We dove into the labyrinth of government contracting to identify who might be cashing in on this $13 billion-dollar kitty.
Teeing up a pLEO-Powered Marketplace
To level set, the pLEO IDIQ is more than just a funding vehicle. It’s foundational to the Pentagon’s vision of embedding commercial technologies into military ops. DISA and SSC’s CSCO launched the program in 2021 with an RFI and formalized it with an RFP in September 2022. The goal was to establish a marketplace of pre-selected vendors offering ready-to-deploy solutions across all military branches. Although most of the players chosen focus on low-latency LEO broadband, awardees like Inmarsat, SES, BlackSky, and AT&T round out the menu with complementary capabilities.
In three different award rounds that began in July 2023, DISA set up the marketplace with 20 vendors that would be eligible to compete for task orders. While each contract only guaranteed a $2,000 minimum, the total potential stood at $900M – now $13B – spanning a five-year performance period through 2028 with an optional 5-year extension.
The pLEO Roster: Who’s Cashing in?
While only five of the 20 awardees have received task orders under the pLEO IDIQ so far, it’s worth remembering that we have more than eight years and $12B left to go. A breakdown of the key contracts:
SpaceX: Dominating the field with 40 task orders totaling $631 million, SpaceX’s contract for services in Ukraine was pulled under the pLEO IDIQ in August and is worth an eye-popping $537M ($106M every six months).
RiteNet Corp.: The full contract value of RiteNet’s pLEO task orders to the U.S. Air Force totals just over $12M.
OneWeb Technologies: Including the base and all exercised options, OneWeb appears to have been awarded $4.1M across two pLEO task orders to provide satcom services to the U.S. Army.
Kuiper Government Solutions: There is little doubt the pLEO budget increase was partially motivated by the prospect of Amazon Kuiper coming online combined with the DoD’s desire to diversify its LEO broadband vendor base. In the interim, KSG clinched a one-time $450k antenna study with AFRL under the pLEO IDIQ.
Trace Systems: Landed a $39k task order from the U.S. Navy under the pLEO IDIQ.
The following 15 companies are in the bullpen, ready to compete for future task orders:
Arinc Incorporated (Collins Aerospace |RTX)
Artel, LLC
AT&T
BlackSky
Capella Federal
DRS Global Enterprise Solutions, Inc. (SES Space & Defense)
Honeywell Aerospace
Hughes Network Systems, LLC
Intelsat General Communications, LLC
Inmarsat (Viasat) Government, Inc.
Iridium Communications Inc.
Lynk Global
PAR Government
Satcom Direct Government, Inc. (SDG)
UltiSat, Inc.
Why the Pentagon’s Betting Big on pLEO
With its Daddy Warbucks-like budget ceiling, the pLEO contract could also serve as a strategic safety net. Existing contracts for military satcom services or satellite imagery and analytics could migrate to the pLEO IDIQ framework, especially those facing funding challenges or approaching the end of their performance periods.
The IDIQ could also support emerging technologies like direct-to-device (DTD) from AST SpaceMobile through its partner pLEO award recipient AT&T – a telco titan with billions in existing government contracts, including the FirstNET public safety broadband network.
Other key government contractors that are a part of the marketplace, including Inmarsat-Viasat and SES Space and Defense (via its subsidiary DRS GES), may see future task orders to integrate multi-orbit solutions such as O3b mPOWER into the pLEO architecture.
This ability to rapidly on-ramp existing services offers the DoD a streamlined path to operationalize the latest commercial tech to remain agile and responsive in an increasingly contested space domain. And even if SpaceX continues to feast at the head of this $13 billion-dollar table, the crumbs left could still satisfy quite a few appetites.
Government Contract Sources:
Federal Procurement Data System
GovSpeak Glossary:
DISA: the Defense Information Systems Agency – a support agency of the Department of Defense (DoD) that is working on behalf of Space Systems Command’s (SSC) Commercial Satellite Communications Office (CSCO) to manage the pLEO IDIQ.
IDIQ: Indefinite Delivery, Indefinite Quantity is a contract type that provides for an indefinite quantity of supplies or services during a fixed period of time.
pLEO: Proliferated LEO in this context refers broadly to the DoD’s strategy to build a resilient, redundant, cost-effective satellite architecture with a low Earth orbit (read: low latency, high data rate) satcom and/or satellite imaging (hence BlackSky & Capella’s inclusion) component.
RFI (Request for Information): A call to companies to ask what they have to offer.
RFP (Request for Proposal): A follow-up from an RFI where companies are asked to share their pitch, pricing, and execution details.
Starshield: As it relates to this pLEO procurement, the militarized version of Starlink satcom services and terminals that run on the commercial Starlink network, and not the government-owned and operated Starshield satellite constellation.
SOURCE: https://spacenews.com/pentagons-commercial-satellite-internet-services-program-soars-to-13-billion/