Exclusive-Northrop Grumman working with Musk's SpaceX on U.S. spy satellite system

By Joey Roulette and Marisa Taylor

WASHINGTON (Reuters) - Aerospace and defense company Northrop Grumman is working with SpaceX, the space venture of billionaire entrepreneur Elon Musk, on a classified spy satellite project already capturing high-resolution imagery of the Earth, according to people familiar with the program.

The program, details of which were first reported by Reuters last month, is meant to enhance the U.S. government's ability to track military and intelligence targets from low-Earth orbits, providing high-resolution imagery of a kind that had traditionally been captured mostly by drones and reconnaissance aircraft.

The inclusion of Northrop Grumman, which has not been previously reported, reflects a desire among government officials to avoid putting too much control of a highly-sensitive intelligence program in the hands of one contractor, four people familiar with the project told Reuters. "It is in the government's interest to not be totally invested in one company run by one person," one of the people said.

It's unclear whether other contractors are involved at present or could join the project as it develops. Spokespeople at Northrop Grumman and SpaceX didn't respond to requests for comment.

Northrop Grumman is providing sensors for some of the SpaceX satellites, the people familiar with the project told Reuters. Northrop Grumman, two of the people added, will test those satellites at its own facilities before they are launched.A t least 50 of the SpaceX satellites are expected at Northrop Grumman facilities for procedures including testing and the installation of sensors in coming years, one of the people said.

In March, Reuters reported that the National Reconnaissance Office, or NRO, in 2021 awarded a $1.8 billion contract to SpaceX for the classified project, a planned network of hundreds of satellites. So far, the people familiar with the project said, SpaceX has launched roughly a dozen prototypes and is already providing test imagery to the NRO, an intelligence agency that oversees development of U.S. spy satellites.

The collection of imagery hasn't been previously reported.

In a statement, an NRO spokesperson said the agency "has always worked with a diverse group of partners to deliver the most capable, diverse, and resilient space-based intelligence, surveillance, and reconnaissance capabilities." The spokesperson declined to comment on specifics of the satellite network or identify any companies that may be involved.

The network's imaging capabilities are designed to have superior resolution over most existing U.S. government spying systems.

It's also designed to address another concern: Currently, U.S. defense and intelligence agencies gather considerable amounts of imagery from drones and reconnaissance aircraft in other countries' sovereign airspace, which poses risks, especially in conflict zones. Placing that image-collection in Earth's orbit reduces the risk, U.S. officials have said.

For SpaceX, known for its rapid launches of reusable rockets and commercial internet satellites, the project is its first known foray into intelligence surveillance services, long the domain of the government and established space contractors.

Since SpaceX began operations over two decades ago, Musk and other company officials have resisted working with established aerospace and defense contractors, many of which they have criticized as bureaucratic and slow.

But even as space and intelligence agencies work more closely with SpaceX, people familiar with the contract said, officials want to ensure that other partners are included. Northrop Grumman has a long history as a defense and intelligence contractor, already providing the U.S. government with products and services including military satellites, maneuverable spacecraft and space-based communications.

Once the new spy satellite network is fully deployed, the people told Reuters, it will be equipped with an array of different sensors, including optical and radar technology. The system will also feature relay satellites that can transmit the imagery and other data across the network, two of the people added.

(Editing by Paulo Prada)