Private launch of Navy satellite

I watched the feed of ILS launching a US Navy communications satellite.
Does private industry normally contract for this sort of thing, or is it due to the shuttle being grounded?

The military stopped using the shuttle for satellite launches after the Challenger failure.

Military space launches are handled in various ways. The Air Force generally buys the launch vehicle and conducts the launch itself, with help from a contractor. Recently there has been a trend toward buying the launch as a service, rather than the actual vehicle, in which case the AF is less involved in the technical details and launch process. When the payload is particularly expensive or secret (i.e. a spy satellite), the AF exerts more control over the process. For small satellites, there may be very little involvement by the AF, except to conduct reviews of the contractor’s work prior to launch. I’m less familiar with how the Navy does it, although they seem to rely on contractors more heavily than the AF. They don’t launch enough satellites themselves to justify a big investment in in-house capability.

NASA does business the way the AF used to, that is, they buy the hardware and launch it themselves.