Colorado Springs is positioning itself for a bigger role in America’s aerospace and defense industry as the Pentagon moves to bring a major Space Force acquisition office closer to the companies and military installations already operating in the region.
The move comes as the Department of Defense prepares for a defense budget of more than $1 trillion in 2027. For aerospace and defense startups, gaining access to that spending is not only about having the right technology. Location can also matter, particularly when it puts companies closer to the officials deciding which projects receive funding.
Colorado Springs will soon become home to one of the nine Portfolio Acquisition Executives, or PAEs, created as part of a broader effort to change how the Pentagon manages military acquisitions.
The PAE office moving to Colorado Springs will oversee a $4 billion Space Force infrastructure portfolio and hold about 90% of the contracting and hiring authority for that budget.
The office is relocating from Los Angeles to Peterson Space Force Base, which has long been an important center for the US Space Force. Its arrival gives companies in Colorado Springs closer access to the government officials responsible for a significant portion of the Space Force’s infrastructure spending.
That could be particularly important for startups that are trying to break into the defense contracting system.
Colorado Springs already has a growing aerospace and defense ecosystem, with companies such as Bluestaq, True Anomaly and Caliola Engineering LLC pursuing and securing Department of Defense contracts. The presence of the PAE could give these companies and other businesses in the region a more direct connection to the people shaping future contracts.
The change also comes as the Space Force works to simplify a federal acquisition system that has traditionally involved several layers of review.
Military contracts can take months to move through different program offices and approval processes. For startups operating with limited resources, those delays can be difficult to absorb.
Under the new acquisition structure, a single office now controls the budget for an entire mission area. The Colorado Springs PAE will have around 90% of the contracting and hiring authority for its portfolio, reducing some of the layers that previously stood between companies and federal decision-makers.
READ: Vikram Manikonda named to Defense tech innovator GRVTY’s advisory board (August 14, 2026)
For businesses developing technologies for the military, being located close to that decision-making process could have practical benefits.
Companies near Peterson Space Force Base will be able to meet with contracting teams more easily and develop relationships with officials without having to make regular trips to Los Angeles.
Colorado Springs also has an established infrastructure for aerospace and defense companies. Peak Innovation Park, a 1,600-acre development, is home to companies including Northrop Grumman and Amazon. The park also includes Lockheed Martin’s Pulsar Guardian facility and The Aerospace Corporation’s Space Warfighting Center, which support testing, training and simulation for space missions.
The region’s transportation network is another advantage. Colorado Springs has its own airport and highway access to Denver, making it easier for companies to move employees, equipment and specialized materials.
But perhaps the biggest advantage is the workforce.
Colorado Springs has a large community of military veterans with experience in areas including space, cyber, intelligence and missile defense. The region also benefits from institutions such as the US Air Force Academy, the University of Colorado Colorado Springs and CU Boulder, which contribute to the area’s engineering and technology talent pool.
“Companies that compete for military contracts and defense work make up a large part of the innovation landscape in Colorado Springs. The region’s technology infrastructure and strategic location fuel their work with the U.S. government, but securing these contracts has required them to navigate a long contracting process with stakeholders across the country,” said Johnna Reeder Kleymeyer, President and CEO of the Colorado Springs Chamber & EDC.
“Now, with the PAE office located here, local companies will be able to bypass logistical steps that used to proceed winning hundreds of millions of dollars in contracts.”
The arrival of the PAE could be especially significant for startups that are still trying to establish themselves in the defense industry. Unlike established contractors, smaller companies often have fewer resources to navigate lengthy government procurement processes.
U.S. Congressman Jeff Crank of Colorado Springs told The American Bazaar that the new office could give startups closer access to the officials responsible for major military spending decisions.
“Startups get something money can’t buy on its own: closer access to the officials who are making the biggest financial decisions shaping the future of the U.S. military. Right now, if you’re a small company in Colorado Springs chasing a defense contract, you’re used to routing every conversation through Los Angeles and waiting for it to work its way back. With the PAE and its $4 billion portfolio sitting at Peterson, that conversation happens down the street instead. This office controls somewhere around 90 to 92 percent of the contracting authority for its portfolio, which means the people deciding what gets funded next are now working alongside the same companies, like Lockheed Martin, Northrop Grumman and Raytheon, that our smaller businesses partner with and compete against every day. For a founder trying to get a contract moving before the runway runs out, that’s an important shift.”
The region’s workforce will also be important if defense spending continues to generate new projects.
READ: Indian American Impact Fund endorses Hetal Doshi for Colorado AG (August 21, 2025)
“Colorado Springs has an advantage most of the country doesn’t: a veteran community of more than 52,000, plus an active-duty population that’s spent years working the exact space, cyber, intelligence and missile defense missions these companies are building for. That’s a workforce that already speaks the language these contracts are written in. Add in the Air Force Academy, which turns out some of the best engineers in the country, along with UCCS and CU Boulder feeding the civilian pipeline, and you’ve got a talent base that keeps refilling itself.”
Crank said the long-term goal should be to make Colorado Springs a national center for space and defense innovation.
“Five to ten years out, I want Colorado Springs to be the place people think of first when they talk about where America builds and protects its space capability. We already have five major military installations, leading defense contractors and a business park like Peak Innovation Park that’s drawn in companies like The Aerospace Corporation, Northrop Grumman and Amazon. Landing this PAE tells me the Pentagon sees what we’ve built here and wants to be closer to it. I want to see more of our own companies grow from a handful of engineers in an office park into the primes that win the next generation of national security work, and I want them to do it without ever having to leave Colorado Springs to get there.”
The PAE’s arrival could therefore have an impact well beyond the $4 billion budget it will oversee.
For Colorado Springs, it represents a chance to bring federal acquisition decisions closer to an ecosystem that already includes defense contractors, startups, military installations, research facilities and a large pool of skilled workers.
For startups, the opportunity is more direct. Being close to the people controlling billions of dollars in future defense spending could make it easier to compete for contracts and turn new technologies into operational systems.
As the Pentagon prepares to spend more than $1 trillion on defense in 2027, Colorado Springs is betting that being closer to where the money is allocated could help local companies capture a larger share of America’s next generation of aerospace and defense spending.