SpaceX Starshield Contract with US Military Made Under Unique Terms

SpaceX has received a contract for $70 million from the US Space Force to provide specialized satellite communications to the military as part of the company’s new Starshield program. It includes “unique terms and conditions” not included in commercial contracts.

Last week it became known that SpaceX had received its first contract from the US Space Force to provide specialized satellite communications to the military as part of the company’s new Starshield program. SpaceX’s one-year contract for Starshield was signed on September 1, according to Air Force spokeswoman Ann Stefanek. The contract, with a maximum amount of $70 million, “provides for Starshield end-to-end service via the Starlink constellation, user terminals, ancillary equipment, network management and other related services,” she said. By September 30, SpaceX will have committed approximately $15 million to fund 54 “mission partners” across the Army, Navy, Air Force, and Coast Guard, she said.

The Starlink service, Starshield, provided under this agreement is SpaceX’s trademark for its military product line.

“The task order for Starshield services is provided by the Starlink satellite constellation but is differentiated from the commercial Starlink service based on unique Department of Defense terms and conditions that are not found in commercial service contracts,” the command said in a statement to SpaceNews.

The $70 million contract is an order under an indefinite delivery/indefinite quantity (IDIQ) procurement vehicle. It will be used for proliferated low Earth orbit (PLEO) satellite services the Space Force announced in July. SpaceX is one of 16 selected suppliers that will compete for up to $900 million in orders over the next 10 years.

The SpaceX contract is the first and only order awarded to date under the new PLEO IDIQ.

It should be noted that Space Systems Command did not specify what unique terms are included in the Starshield contract. However, there is an assumption that it is taking full responsibility for using the service for any military purposes. By entering into the contract, the US Space Force relieves SpaceX of the burden of responsibility for making critical military decisions.

The contract with the US Space Force provides some insight into what SpaceX intends to do with its Starshield product line, said industry consultant Andrew Chanin, who runs the Procure Space ETF investment fund. The company introduced Starshield 10 months ago, listing “secure satellite network for government entities” as one of its offerings.

“They are bifurcating the pure play commercial business and the one for highly sensitive government and military customers,” Chanin said. “This could very well be a way of telling militaries and governments that they can buy this service however they choose to use it.”

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