Josh Madrigal (Photo Curtsey of Millennium Space Systems)
Today’s national security space acquisition focuses on speed, cost and performance. Millennium Space Systems’ success in these areas is due to factors like their small sat production line and common core products. A less commonly known success factor is contracting. Millennium Space Systems’ Vice President of Contracts Joshua Madrigal shares how contracting plays a critical role in acquisition.
What’s your view on DoD changes to move more quickly on both launching and acquiring satellite services?
When Millennium was first founded, small satellites weren’t at the forefront of customers’ minds, but fast forward to today and we’re following Hon Kendall’s Operational Imperatives, Hon Calvelli’s 9 Space Acquisition Tenets and Gen Guetlein’s Resiliency by 2026. As a result, we’re seeing the rapid acquisition of small satellites. Not only is this in RFP language, but also actions, immediately awarding of contracts through vehicles like other transaction authorities. This demand for high-performance small satellites is why we built our Small Sat Factory.
But, keep in mind, this isn’t just about the satellites. It’s also about launch and ground systems, which are clearly outlined in Hon Calvelli’s 9 Space Acquisition Tenets. Additionally, we see a lot of new entrants across the board that are giving customers a diverse base to work with and it’s also lowering costs and adding capacity.
What type of contracts does Millennium work under?
Millennium executes a wide variety of contract types, including cost-plus, fixed-price agreements, other transaction authorities and indefinite delivery/indefinite quantity. We’re able to execute various contract types because of our flexibility and the way we partner with customers to find solutions for their mission needs.
What is Millennium’s experience with fixed-price agreements?
We typically see fixed-price contracts when the goal is to deliver a satellite in a condensed schedule. A good example is with Tactically Responsive Space missions – where speed of delivery is key.
Our contracts team has extensive experience with government contracts so we have the knowledge base to implement fixed-price agreements on time and on budget. We also set up programs for success by clearly defining requirements and the scope of work on, for example, mission assurance, quality control and testing.
We know fixed-price agreements are more relevant with customers. Assistant Secretary of the Air Force for Space Acquisitions and Integration Frank Calvelli recently emphasized fixed-price contracts in his 9 Space Acquisition Tenets. But there are a variety of contracting methods based on what is best for the customer, industry and the mission.
The DoD often uses Other Transaction Authority contracts. What is Millennium’s approach to OTAs?
OTAs align well with how we do business. Millennium Space Systems is a hybrid company that combines the best of commercial and traditional industries, including government and commercial contracting best practices. We have decades of experience partnering with national security customers and we can take advantage of Boeing’s extensive commercial contracting experience to move fast and efficiently.
Tetra-1, which we delivered in under 15 months from authorization to proceed, is a good example of a successful OTA. From a contracting perspective, we adapted certain processes to help us go faster under the OTA construct. These are processes that now carry over to how we execute rapid-delivery contracts.
The DoD also uses indefinite-delivery/ Indefinite quantity contracts to purchase small satellites as-needed. What advantages do you see with IDIQs?
Customers need speed and flexibility. One way to enable that is through an IDIQ contract, which offers a speed factor. We negotiate the terms up front, and then we’re just negotiating statement of work, cost and schedule for individual satellites. Customers can simply request additional satellites via delivery order based on the capability needed at a particular time. It’s efficient because we don’t have to negotiate terms every single time for a new satellite or a new capability that the customer needs.
IDIQs also provide flexibility. Our customers can tech refresh or add new capabilities to the existing satellite already on contract by exercising another delivery order under the existing IDIQ agreement. And because of its success, customers are now setting up IDIQs with large contract ceilings.
How does your team support program success?
We are shoulder-to-shoulder with our customers from Day One. We work with them to understand the mission objectives and the requirements they have in mind. Then we partner to define the scope of work, timeline and costs.
Once the program is up and running, our contracts specialists meet with customers every week. And since several of our customers are located near our West Coast headquarters and East Coast office, we have many opportunities to interface in person. We pride ourselves on our customer relationships, and our team understands that the mission comes first. We’re there to support that mission in every aspect.
How do supplier relationships impact the ability to deliver small sats at speed?
Supplier relationships are crucial to ensuring a steady delivery of components. One way we strengthen relationships with key suppliers is through vehicles like long-term agreements. LTAs are critical to our ability to scale manufacturing. The agreements provide assurances to suppliers that allow them to forecast for their long-range business planning. It’s a win-win because we guarantee a certain amount of business for our suppliers, and in return, they provide us with the parts needed to build large constellations quickly.
