Big Contractors Also Poised for Shift to Disaggregation

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WASHINGTON — With the U.S. Air Force’s space leadership vowing to move away from a status quo dominated by large, exquisite satellite systems, an unlikely corner of the space industry is claiming to be perfectly suited to the change: the big contractors who for decades built those very systems.

Small and mid-size firms are quick to say the Air Force’s emerging vision for space that features smaller, less-complex satellites and hosted payloads would lead to more opportunities for them to compete, or at least get a foot in the door. But some of the top prime contractors, the ones who have largely established the status quo that Gen. William Shelton, commander of Air Force Space Command, wants to move away from, said they saw the same opportunities.

They too have been anticipating these changes, driven by declining budgets.

“Boeing is well positioned, and in fact we have extended our product offerings to include enhanced hosted payloads and nanosats in order to be prepared for disaggregation, which we have been anticipating for some time now,” said Jim Simpson, vice president of business development at Boeing Space & Intelligence Systems of Seal Beach, Calif. Boeing is “already under contract or operational on many of the key components of disaggregated space” with hosted payloads in orbit or in production, he said.

Recently, the company introduced the Phantom Phoenix line of satellite platforms that would range anywhere from several to 1,000 kilograms in weight and could be adapted for short-term experiments or operational missions lasting up to seven years or more.

During recent trade shows, Northrop Grumman officials have been pitching products aimed at a more cost-conscious government customer. Specifically, the company is shopping a protected satellite communications capability for tactical users that currently is available only from the Air Force’s large — and expensive — Advanced Extremely High Frequency (AEHF) satellite system.

“When [Shelton] talks about disaggregation, this is what he’s talking about,” said Rick Skinner, director of communication systems and business development for Northrop Grumman Aerospace Systems of Redondo Beach, Calif.

Most of the military’s large satellite systems, including the AEHF, are built by Lockheed Martin Space Systems of Denver. Officials with that company, while urging caution on disaggregation, say if that is what the government wants, they are prepared to deliver.

“Lockheed Martin fully supports the Air Force in their drive to reduce costs while making the missions more resilient,” said Mark Calassa, vice president and program manager of the AEHF program. “Disaggregation is a good thing depending on the mission. When analyzing the affordability of the system, cost impacts need to be considered for the total system including launch, ground and the satellite.”

Industry experts say they believe the Pentagon’s desire to change is real, but questioned whether it has the funding necessary to revamp its satellite architecture.

“We’ve seen these cycles come and go,” said Mark Albrecht, chairman of the board of U.S. Space LLC and former executive director of the National Space Council, a now-defunct government panel whose mission was to coordinate space activity across the military, civil and commercial sectors. “The one that makes this unusual is the abruptness of the shift in resource availability. It’s going to be really hard. There’s just no money. They’re going to have to get creative and I’m not sure how creative [the Department of Defense] can be.”

Albrecht said that as recently as two years ago the Pentagon was awarding long, cost-plus contracts to its traditional contractors. Under cost-plus contracts, typically used for large space development programs, the government assumes the financial risk of cost growth.

Even a transition to a more balanced approach — a mix of large, multimission satellites and smaller, simpler platforms — will not come easily, Albrecht said. Space companies will do whatever they can to hold on to their existing contracts.

One Pentagon official cautioned against pursuing disaggregation for disaggregation’s sake.

“Disaggregation and hosted payloads are a means to an end,” Richard McKinney, deputy undersecretary of the Air Force for space, said in an April 15 briefing with reporters. “The important thing is the end. What kind of capability are you trying to achieve? … We also have to be mindful of how much is that going to cost. Buying more and launching more could be higher cost. Or you could come up with some innovative techniques to reduce that cost.”

In a hearing before the Senate’s Armed Services strategic forces subcommittee April 24, Shelton said preliminary results from studies suggest disaggregation would in fact save money.

Cristina Chaplain, director of acquisition and sourcing management for the Government Accountability Office, said her agency’s own preliminary studies largely second that assertion.

But understanding how much money disaggregation might save requires understanding what programs currently cost, and that is something neither the Pentagon nor industry has a good handle on, according to several space executives.

Lockheed Martin and Northrop Grumman are engaged in a study in which they are sharing information about the actual lifetime cost of some disaggregated space programs. The study is expected to be released later this year.

Albrecht said cost is not the sole factor to consider when it comes to disaggregating space constellations. Air Force officials must also consider constellation, resiliency, industrial-base stability and technological obsolescence in deciding whether disaggregating missions makes sense.