Trump Air Force nominee arranged satellite contract in manner that favored Musk's SpaceX, sources say

Washington: President Donald Trump's nominee as Air Force Secretary, currently a top official at the national spy satellite agency, arranged a multibillion-dollar contract solicitation in a way that favored Elon Musk's SpaceX, according to seven people familiar with the contract.

Changes to the requirements for the classified contract led the inspector general of the agency, the National Reconnaissance Office, to investigate whether the official, Troy Meink, had improperly directed the transaction toward SpaceX, two of the people told Reuters. Musk's space venture ultimately won the contract in 2021. It isn't clear whether the inspector general concluded a report or if any investigation remains underway.

Neither the allegations related to the contract, nor the inspector general's probe, have previously been reported.

A spokesperson for the NRO said by email the agency "does not have any knowledge of any allegations, protests or wrongdoing related to the procurement" referred to by Reuters. It declined to comment on "details related to contractual relationships with industry partners or specific activities."

The inspector general, Terrence Edwards, through the NRO spokesperson said his office "does not provide any information regarding possible complaints or investigative activities."

The claims come as Meink, an engineer and former military officer who has served as principal deputy director of the NRO since 2020, awaits confirmation for his nomination to lead the Air Force. His nomination, two of the people told Reuters, followed a recommendation from Musk, the billionaire entrepreneur turned Trump advisor who has influenced White House appointments and caused uproar over potential conflicts of interest because his various companies, including SpaceX, conduct extensive business with the federal government.

Neither Musk nor SpaceX responded to requests for comment for this report. A spokesperson for the Air Force referred queries to the White House. The White House press office didn't respond to Reuters' requests.

During Meink's time at the NRO, SpaceX cemented a strong relationship with the agency, the people familiar with the contract told Reuters. The 2021 contract was to develop hundreds of spy satellites to collect and relay high-resolution imagery of military and intelligence targets worldwide.

It was a pivotal transaction for SpaceX, deepening its ties with U.S. defense and intelligence services. Initially valued at $1.8 billion, the contract is expected to total several times more as the satellite network gets deployed. Reuters was unable to view the contract, which is classified; the government hasn't made details about it public nor confirmed SpaceX's involvement.

While competitive bids were being prepared by several other contractors, four of these people said, Meink changed a portion of the contract that in effect made SpaceX the company best suited to fulfill it. The changes, they added, had to do with a type of inter-satellite communications that SpaceX could offer for the spy satellite network because of Starlink, its commercial broadband service, with some 7,000 satellites in orbit.

Reuters couldn't determine if the change was a deliberate attempt to preclude other bidders or if SpaceX, the biggest and fastest-growing private space company in the world, would have won the contract even without it. Whatever the case, the result was that "no one could compete with (SpaceX) because no one else had a commercial constellation that they could plug into," said one of the people with knowledge of the contract.

At the time, the sources said, some of the people involved in the bidding process complained to NRO officials, ultimately leading to the inspector general probe. In the case of L3Harris Technologies, a contractor upset by the changes, Meink spoke directly with the company and said future business with the agency could be hurt if it filed a formal protest, three people familiar with the interaction told Reuters.

L3Harris didn't answer detailed questions from Reuters about the contract process. In an emailed statement, a spokesperson said the company "has watched the NRO transform under Troy Meink's leadership" and "we look forward to working with him as the new Secretary of the Air Force."

The classified constellation of spy satellites represents one of the U.S. government's most sought-after developments in orbit. Designed to offer the most persistent, pervasive and rapid coverage of activities on Earth, the satellites are a crucial element of American efforts to outmaneuver China, Russia and other rivals for military and geopolitical advantage in space.

Over a hundred of the satellites for the constellation have been launched since last year, according to public space-tracking data and people familiar with the program. The spy constellation, deployed by SpaceX's Starshield unit, is distinct from Starlink, a commercial communications network with over four million customers. But the two satellite systems are designed to communicate with one another in space.