Losing GPS could cost billions, so the Space Force is having companies like Astranis build a backup network

The U.S. Air Force began deploying the Global Positioning System – better known as GPS – satellites nearly fifty years ago, which have become critical infrastructure for both the military and the economy.

Since then, GPS is estimated to have generated more than $1.4 trillion in economic benefits, according to a Department of Commerce study. But the agency warned that an “outage could potentially have an economic impact of $1 billion per day.”

Pentagon leaders believe these losses are a conservative estimate, leading the U.S. Space Force to initiate a roughly $2 billion satellite program known as the Resilient Global Positioning System. The program, simply called R-GPS, is intended to provide an alternative backup network to the current satellite system.

“[GPS is] vital to everything we do every day, from the stock market, to the timing of every transaction, to the crops we grow,” Lt. Col. Justin Deifel, R-GPS leader at the Space Force's Space Systems Command, told CNBC.

“It's just like water and electricity. … It is a utility of the economy and a utility of a warfighter that we need to make sure is available,” Deifel added.

The importance of the existing 31 GPS satellites in orbit, as well as the potential threat in space from US adversaries such as Russia and China, has led the Pentagon to prioritize building the alternative R-GPS network – and the Space Force has turned to the commercial space industry to do this.

Last month, the industry awarded contracts for R-GPS design concepts to four companies: Astranis, Axient, L3 Harris and Sierra Space.

For startup Astranis, which launched its first 'MicroGEO' spacecraft last year, the R-GPS program marks an expansion from satellite internet into the market for positioning, navigation and timing, or PNT, services.

“We are starting to see a huge push toward proliferation in higher orbits by the U.S. national security community,” Astranis CEO John Gedmark told CNBC. “Now the Department of Defense has recognized all the great things we can do in high orbits with a next-generation small satellite approach.”

As the company expands, Astranis announces its new Nexus product line of PNT satellites, the answer to the R-GPS program. Gedmark noted that they use the same type of spacecraft as the company's broadband satellites.

Additionally, because R-GPS satellites will operate in medium Earth orbit like the current GPS constellation, the Nexus product line marks an expansion of the areas where Astranis plans to deploy and operate its spacecraft.

The company, which has raised $750 million since its founding in 2015, has announced deals for 12 of its internet satellites, 10 of which are expected to be launched into geostationary orbit late next year.

“We knew pretty early on that this platform we were developing could be used for missions other than broadband telecommunications and the Resilient GPS program has just proven to be a perfect example of that,” Gedmark said.

Gedmark sees R-GPS as “a multi-billion dollar opportunity” as Space Force looks to build a full constellation of at least 20 satellites.

Space Force used a new Pentagon funding authority called “Quick Start” to get the R-GPS program going.

In less than six months, the program received approval from the deputy secretary of defense, conducted market research, hosted companies for an industry day, solicited bids and awarded initial contracts — a process that the military says often takes up to three years for space programs. .

“The speed with which they implemented this program is unprecedented. … We have never seen the Department of Defense act so quickly,” Gedmark said.

R-GPS has distributed a total of $40 million to fund the design studies. The companies will have an eight-month phase zero period to begin their work, ending in the spring, SSC's Deifel explains.

“The total current budget, if you just think about the recurring engineering costs, we're looking at $50 [million] up to $80 million per satellite and the purchase of more than 24 satellites. So the quick calculation is $1.2 [billion] up to $1.9 billion for 24 satellites, over the next five to six years,” Deifel said.

Although the budget currently does not include “one-time engineering costs,” Deifel expects these expenses to be significantly less than the design costs.

Space Systems Command plans to purchase and deploy the R-GPS satellites in batches of eight, with the first set launching as early as 2028.

Now that design reviews have been completed, SSC plans to select one or more of the companies to move the program forward into the construction phase.

While Astranis' first satellite malfunctioned last year due to a third-party problem with its solar panels, the company's experience operating in distant geosynchronous orbit gives Gedmark confidence in its chances in the R-GPS program.

“We are the only company that has proven a spacecraft of this class in orbit – at a low cost, [radiation]-hardened high-orbit satellite,” Gedmark said.