MBIE, NZ Space Agency awarded space contract to Silicon Valley startup LeoLabs without competitive tender

MBIE, which includes the NZ Space Agency, awarded a multi-year contract to Silicon Valley startup LeoLabs in August without a competitive tender, an Official Information Act response to the Herald reveals.

The ministry concedes it did not even advertise the contract, after claiming an exemption from Government procurement rules, and that there was no shortlist and no proposal evaluation criteria.

MBIE has also refused to reveal the value of the contract – despite its separate claim that there was no viable commercial alternative (implying that the usual commercial sensitivity around rival firms not applying).

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On August 6, MBIE said a multi-year agreement between the New Zealand Space Agency and LeoLabs had been signed “to develop the world’s most advanced Space Regulatory and Sustainability Platform. The platform will improve the ability to implement responsible stewardship of space by commercial and public sector space entities”.

“Our partnership with LeoLabs has allowed us to better understand what’s in space, which is key to upholding our duties as a launching country and ensuring the responsible use of the space environment,” MBIE GM of science and innovation Peter Crabtree said.

LeoLabs’ network of tracking stations includes a radar facility near Naseby in Central Otago that was opened in October 2019 and is billed as the only phased-array in the Southern Hemisphere. As well as tracking satellite launches, and providing real-time monitoring of satellites in orbit via a cloud-based platform, it can keep tabs on space junk as small as 2cm.

Naseby was LeoLabs’ first foray outside the US. It also operates tracking stations in Texas and the US territory of Costa Rica.

Like so many players on the aerospace scene, LeoLabs has received military backing.

The US Department of Defense said in a recent statement,”As part of the national response to Covid-19, the Department of Defense entered into a [US]$15 million agreement with LeoLabs Inc. to ensure the continued viability of space surveillance capability through the operation and maintenance of a worldwide highly capable phased-array radar network.”

The DoD added, “The ability to surveil and analyze spacecraft in low Earth orbit is essential to national defense.

“LeoLabs is the only domestic commercial supplier with demonstrated capability in this critical area.”

MBIE determined the US firm, founded in 2015, was the only option full-stop.

In an OIA response to Herald questions about the procurement process, NZ Space Agency policy manager Andrew Johnston said:

“We also considered the use of the US government’s online Space-Track service. While this service provides freely available SSA [space situational awareness] data, it was rejected as an option given the manual nature of the service. The increasing number of launches from New Zealand and growing catalogue of objects in orbit meant that manually monitoring each satellite for compliance would impose increasing costs over time and ultimately become unsustainable. “

Johnson added, “We obtained an exemption from the open advertising requirement (Government Procurement Rule 14) on the basis of clauses 14.9.c.i: only one supplier – for technical reasons there is no real competition, and 14.9.g: Exceptionally advantageous conditions.

“As we did not openly advertise this contract, there was no shortlist.

“While there was no proposal evaluation criteria, some of the factors we considered in the negotiation of this contract included:

• Meeting the ministry’s purpose in contracting this service
• Cost
• Ability to provide comprehensive coverage of low earth orbit
• Ability to present the compliance data in an accessible and a user friendly format
• Ability to make improvements to the platform over time as additional regulatory needs/use cases develop.

“We are withholding the value of the contract under section 9(2)(b)(ii) [of the Official Information Act], in that it will prejudice the commercial position of the person who the information is about,” Johnson said.

In June this year, LeoLabs closed a US$65m Series B financing round, taking its total funds raised since it launched five years ago to more than US$100m.

In a statement accompanying their raise, CEO and co-founder Dan Ceperley said there were approximately 250,000 dangerous bits of space debris that went untracked by government systems.

He expected the problem to get worse as the number of satellites increase as more nations, and more private companies, gained launch capability.

The funds were earmarked for expanding LeoLabs’ LEO (low-Earth orbit) and SSA (Space Situational Awareness) platforms.

Research, Science and Innovation Minister Megan Woods heaped praise on the US startup at the opening of its Central Otago station, tweeting, “@LeoLabs_Space
are just the sort of businesses we want to attract to New Zealand – R&D intensive & innovative. This radar is the first of its kind and the first constructed by LeoLabs outside of the United States. I’ve seen what these guys do from Silicon Valley to Naseby!”

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