Sometimes, you find the darnedest things buried in the Pentagon’s daily digest of contract awards.
Take Oct. 30’s list for example. Among nearly $600 million in defense contract awards described, there was a brief mention of Orbital ATK (NYSE: OA) winning $34 million to build a “long duration propulsive evolved expendable launch vehicle secondary payload adapter” for the U.S. Air Force Space Command. The Pentagon let on that this vehicle would be used “for rideshare,” and would utilize “previous propulsive evolved expendable launch vehicle secondary payload adapter development” in its construction — but told us little else about the contract.
Earlier this week, we finally got the details.
Can somebody give this guy a lift? He wants to go…up. Image source: Getty Images.
What ESPA is
Disk-shaped, with receptacles to house up to six “hosted” satellite payloads, or room to attach up to 12 satellites that can be detached to enter separate orbits, the “Long Duration Propulsive Evolved Expendable Launch Vehicle Secondary Payload Adapter” (ESPA) is designed “to carry small payloads or deploy small satellites” into orbit for the Air Force.
More than a month after winning the ESPA contract, Orbital ATK got the all-clear to issue a press release describing it. As Orbital explains, ESPA is an “innovative platform, positioned between the launch booster and a primary space vehicle.” In this position, ESPA basically hitchhikes up into space, nestled between a rocket’s booster and the main payload or capsule atop the rocket.
Once the booster falls away, the main payload heads off into orbit, detaching ESPA along the way — so that ESPA can enter its own orbit, and/or deploy its attached satellites into their own orbits. In the former case, ESPA would use its own “power, pointing, telemetry, command and control” capabilities to host and support satellites onboard. Thus, ESPA offers the Air Force a “modular, cost effective and highly capable platform for hosting technology development and operational payloads.”
What it means for Orbital ATK
Orbital ATK was awarded $34 million to build the first ESPA, which it has trademarked as “ESPAStar.” Assuming the Air Force likes the first one, it has options to order two more from Orbital, presumably at similar prices — turning this into a $100 million program in relatively short order.
Even without the options, the $34 million initial contract is worth nearly 1% of Orbital ATK’s annual revenue (according to data from S&P Global Market Intelligence ), which makes this an important award for Orbital. But the more I think about it this contract, the more I think it might be even more significant than meets the eye.
Read those capabilities again: “Power, pointing, telemetry, command and control.” A “modular … platform for hosting … payloads.” ESPA sounds to me a lot like another of Orbital ATK’s whiz-bangier space projects, namely, the ” Mission Extension Vehicle ” (MEV) that Orbital is building to service in-orbit satellites as a sort of space tow truck service .
Back when that project was announced, Orbital described MEV as a spaceship capable of attaching itself to defunct or glitching satellites, and repairing or refueling them — or of simply providing power and guidance to push a satellite back into its proper orbit. ESPA, with its ability to start off with attached satellites, and “host” them through ESPA’s own systems, sounds sort of like a MEV — perhaps a “pre-loaded” MEV, rather than one that arrives in orbit empty and has to find itself a customer. But the principle is the same.
Assuming it works as the Air Force hopes it will, ESPA could bring Orbital ATK one step closer to building Earth’s first orbital space tow truck service — and give Orbital’s soon-to-be new owner Northrop Grumman a new revenue stream to boot.
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Rich Smith has no position in any of the stocks mentioned. The Motley Fool recommends Orbital ATK. The Motley Fool has a disclosure policy .
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