Report Highlights Need for Better Cost Recovery as Commercial Space Launches Surge

In a new report issued to Congressional Committees, the U.S. Government Accountability Office (GAO) sheds light on the Department of Defense's (DOD) evolving space launch strategy and the mounting strain on federally operated launch ranges as commercial activity in space intensifies. The report, titled "National Security Space Launch: Increased Commercial Use of Ranges Underscores Need for Improved Cost Recovery", credits lead author Jon Ludwigson and his GAO team with a thorough examination of the DOD's Phase 3 strategy for national security space launches.

The GAO’s study comes at a critical moment in space operations, where both national security demands and private sector launches are converging on limited federal launch infrastructure. Over the past decade, commercial activity has exploded, driven in part by the ambitions of SpaceX, Amazon, and others building massive low-Earth orbit satellite constellations. The GAO found that commercial launches at federal sites have quadrupled since 2021, and this growth is putting immense pressure on infrastructure that was originally designed with far fewer launches in mind.

To meet rising national security launch requirements, DOD has adopted the “Phase 3” acquisition strategy through the U.S. Space Force. This dual-lane model is designed to balance innovation with assured access. Lane 1 opens the door to emerging providers—offering flexibility and encouraging competition—while Lane 2 assures mission success by securing proven launch providers for high-priority payloads. Together, these lanes aim to preserve resiliency, reduce costs, and avoid reliance on any single launch vendor. Notably, the Space Force recently awarded significant Lane 2 contracts to SpaceX, United Launch Alliance (ULA), and Blue Origin totaling more than $13 billion for 54 launches through 2029.

But the GAO’s report is not just a roadmap of DOD’s procurement strategy—it sounds a clear alarm about cost recovery shortfalls. Historically, DOD has only recouped “direct costs” from commercial providers, such as utilities or labor directly supporting a launch. Indirect costs—like maintenance of roads, security, and range modernization—were not reimbursed until recently. Even now, GAO found that the Space Force lacks a reliable, transparent methodology for calculating and collecting these costs. The result: millions of taxpayer dollars at risk of being unreimbursed, even as private entities benefit from government-supported infrastructure.

Moreover, the study reveals that the logistical burdens imposed by higher launch cadence and new vehicle types—like methane-fueled rockets and reusable boosters—are complicating range operations. Oversized vehicle movements have led to traffic hazards, infrastructure degradation, and even safety incidents. DOD’s own planning acknowledges these stresses, with infrastructure funding of $1.4 billion in projects at Cape Canaveral and Vandenberg Space Force Base slated through the 2030s under the “Spaceport of the Future” initiative.

Another major concern is payload processing. As the report notes, DOD struggles to coordinate launch schedules due to lack of insight into commercial providers’ plans. Without shared data, DOD cannot fully optimize its payload integration facilities. GAO recommends that the Space Force issue solicitations to increase visibility and centralize scheduling across program offices—essential for managing payload capacity amidst rising demand.

GAO concludes with three clear recommendations: update financial regulations to define direct and indirect cost recovery; prioritize efforts to improve launch schedule coordination; and centralize national security payload processing to avoid delays. DOD has concurred with all three recommendations, signaling willingness to address the issues.

As the space launch ecosystem rapidly evolves, the GAO’s findings emphasize the importance of proactive infrastructure management and fair cost sharing. This report not only provides oversight but also offers a call to action: to modernize policies, enforce accountability, and ensure that national security and commercial innovation can thrive side by side.

Disclaimer: This blog post is a summary of the GAO-25-107228 report. It is for informational purposes only and does not constitute legal or financial advice. While every effort has been made to ensure accuracy, readers should consult the original GAO report or agency contacts for authoritative guidance.