"to chart a path to deliver in-space transportation and logistics capabilities to the U.S. government on a managed-service basis — ultimately giving the government flexible, on-demand access to orbital logistics without the cost and schedule of owning and operating the mission spacecraft," DIU wrote in a Aug. 14 LinkedIn post announcing new awards.
Three contractors: D-Orbit, Firefly Aerospace and Katalyst Space
The Defense Innovation Unit (DIU) and the Space Development Agency (SDA) have awarded contracts to D-Orbit, Firefly Aerospace and Katalyst Space to design — and potentially demonstrate — spacecraft that can capture and safely remove dead satellites from orbit as part of a Deorbit-as-a-Service (DaaS) effort. The immediate awards are small, totaling $8.4 million to cover delivery of "preliminary" designs by the end of the year, one Pentagon official told Breaking Defense. Each contract includes options for future work; D-Orbit said on Aug. 13 that its DIU contract has a potential value of $24 million.
DIU and SDA: evaluation criteria, schedule and the 2028 target
DIU and SDA will jointly evaluate each vendor’s design for "technical maturity, mission approach, schedule, and affordability" before deciding which solution goes forward to a full on-orbit demonstration, according to DIU's announcement. The broader end-goal of the project is to launch a prototype spacecraft and begin de-orbiting services in 2028, a Pentagon official told Breaking Defense.
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End the scrambleTechnical approaches: rendezvous, capture, refuel, repair and deorbit
Although each company envisions a slightly different modus operandi, the spacecraft being designed share core capabilities: rendezvousing with satellites that were not specially equipped for servicing, capturing or otherwise controlling them, then moving them to a disposal trajectory or providing on-orbit services such as refueling, repair, inspection or repositioning.
Katalyst Space stressed that its NEXUS spacecraft "is capable of multiple types of missions" and noted an existing NASA contract to boost the Neil Gehrels Swift Observatory to a higher orbit. D-Orbit said a successful demonstration under the DIU-SDA project will enable it "to accomplish other critical LEO logistics missions for the US government such as refueling satellites, repairing satellites, inspecting satellites, re-positioning satellites, etc." Firefly CEO Jason Kim said the firm’s Elytra vehicles "can deorbit satellites of vastly different sizes and configurations to help mitigate the growing space debris challenge our industry is up against."
SDA's earlier Starfish Space award and the expanding commercial pool
The DIU-SDA awards come after SDA in January issued a first-of-its-kind $52.5 million contract to Starfish Space to use its Otter spacecraft to dispose of expired satellites within SDA’s planned Proliferated Warfighter Space Architecture. Starfish, at the time, said it "expects to launch next year." The new DIU-SDA step is explicitly an effort to expand the pool of commercial vendors that can provide deorbiting and on-orbit logistics services.
What this means for DIU, commercial vendors, and nation-state actors
- DIU and SDA: will use the preliminary designs and options to choose a demonstrator, relying on the joint evaluation of maturity, approach, schedule and affordability — and aim to move toward an on-orbit demonstration that could start services in 2028.
- Commercial vendors: gain access to a managed-service procurement model that DIU says gives the government "flexible, on-demand access to orbital logistics" without owning spacecraft outright; small immediate awards signal an iterative approach with further business available via contract options.
- Nation-state actors and defense planners: DoD officials have earlier warned that spacecraft with capture and tug capabilities can be dual-use — usable to remove debris or to move, disable or otherwise render another spacecraft ineffective. The Pentagon has repeatedly cited the Chinese SJ-21, which in 2022 tugged a defunct Chinese satellite in geosynchronous orbit to a graveyard orbit, as an example of a capability that could serve as a space weapon.
DIU’s February solicitation framed the rationale plainly: as proliferated constellations expand, satellites that experience anomalies or reach end-of-life "persist in orbit as hazards that constrain maneuver space, increase collision risk, and degrade mission resilience." The current awards are a modest, deliberately staged step toward answering that problem with commercial services rather than government-owned fleets.
The immediate facts are concrete: three contracts, $8.4 million in initial awards, evaluation across maturity and affordability, and a stated aim — by a Pentagon official — of beginning prototype de-orbiting services in 2028. The path from preliminary designs to an on-orbit demonstration will test both technical concepts for handling uncooperative satellites and the government's appetite for buying space logistics as a managed service rather than as traditional procurement of spacecraft.
