Rocket Lab NASDAQ:RKLB rose 3.15% premarket after winning a $266 million firm-fixed-price contract from the US Department of War for suborbital launch services. The award covers 12 suborbital launch vehicles with six optional additional launches, all flown from the Pacific Spaceport Complex in Alaska, with work due for completion by December 31, 2028.
The Long Beach company won the contract through competitive bidding that drew three offers. Fiscal 2025 research, development, test and evaluation funds of $112 million are being obligated at award, with Space Systems Command at Kirtland Air Force Base in Albuquerque acting as the contracting activity.
For Rocket Lab investors, the firm-fixed-price structures put the cost risk on the company, meaning Rocket Lab absorbs any overruns but keeps the upside if it delivers below budget. The six optional launches, if exercised, would extend the value beyond the headline figure.