What is Government Contracting’s Role in the US Space Race?

With a 30%+ year-over-year increase, space continues to be one of the fastest-growing defense budget areas. This figure was revealed by Kathy Warden, CEO of one of the most prominent defense contractors in the US, Northrop Grumman during the company’s first-quarter earnings calls

The two leading entities in the race for dominance in the space economy are Blue Origin and SpaceX, led by Jeff Bezos and Elon Musk, respectively. Both companies have been awarded monumental government contracts in the last couple of years, details for which can be seen in TenderAlpha’s global contract awards database, as NASA aspires to realize its ambitious plans for moon exploration and even for the landing of the first humans on Mars. 

"Our shared ambitions now are no less lofty than when President [John F.] Kennedy dared a generation of dreamers to journey to the moon.", NASA Administrator Bill Nelson said in announcing Blue Origin’s contract award for the development of a crewed lunar lander for delivering astronauts to the moon's surface later this decade.

The contract is worth just over $3.4 billion, but the effort is effectively a more than $7 billion project. This award levels the score between the Bezos-led conglomerate and Elon Musk’s SpaceX, which was awarded the first crew lander federal contract in 2021 (valued at nearly $2.9 billion) to develop a variation of its Starship rocket for Artemis missions. 

The Blue Origin-led team includes renowned government contractors such as Lockheed Martin and Boeing, as well as Draper, Astrobotic, and Honeybee Robotics. These companies’ active participation in the public procurement process speaks of the economic significance of the space market and could be seen as a hint at their own financial stability. 

Success in government contracting is known to be a predictor for solid financial performance and also for a positive impact on the awardees’ stock. The latter correlation has been tested and proved in a collaborative study between a research team from Penn State and TenderAlpha that resulted in the ‘Government Receivables as a Stock Market Signal’ white paper. 

The so-called space race is heating and no wonder - NASA’s budget increased by 3% in fiscal year 2022 to reach $24 billion. Then, the budget increased again in 2023 to reach $25.4 billion

On March 9, 2023, The White House released its federal budget request for fiscal year 2024, which allocates $27.2 billion to NASA, marking another 7% increase. The proposed budget would give NASA $8.1 billion for its Artemis program of moon exploration in fiscal year 2024. 

The increasing federal spending on space exploration opens up loads of opportunities on many levels. Businesses, for example, can get critical information available on TenderAlpha about the big players in the space market. The insights can inform their strategic decisions as they seek subcontracting opportunities within some hefty contracts. 

As mentioned above, investors can also benefit from detailed information about a company’s public procurement activity as it can have an impact on their stock performance. The use of government contract awards data is relatively new to the financial industry, which means that it can provide a value-adding perspective to which few other investors have access. 

Monitoring government spending in the ongoing space race is a must for anyone who wants to know which companies win billions of dollars as a result of obtaining government contracts. TenderAlpha can help you track the companies you are interested in and uncover lucrative opportunities for you with our data. Get in touch now to find out how! 

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