Proposed Legislation Directs Pentagon to Examine Long-term Satellite Leases

by

WASHINGTON — The House Armed Services strategic forces subcommittee emphasized efficiency and competition in procurement of space-related services in marking up its portion of the 2014 defense bill, calling for the consideration of multiyear leases of commercial satellite capacity and the “fair evaluation” of companies seeking to win military satellite launch contracts.

The subcommittee, which has oversight of U.S. military space and missile defense activities, appears to respond to industry complaints that the Defense Department’s typical practice of signing one-year satellite leases hamstrings their ability to plan for the future or invest in long-term infrastructure. The proposed language, which could find its way into the National Defense Authorization Act for 2014, calls for an analysis of the benefits and risks of a multiyear approach and of what would be necessary to make such changes happen. 

Lawmakers have made similar requests before. In 2006, the defense authorization bill included a comparable study, but the Pentagon continues to rely on short-term leases.

The proposed bill language would also prevent the Defense Department from entering into satellite services contracts involving certain countries without a waiver from the secretary of defense.

Subcommittee members were unhappy recently when Pentagon officials confirmed a leasing arrangement involving a company that is nearly 40 percent owned by the Chinese government.

The lease in question was for transponder capacity aboard the Apstar 7 satellite owned by APT Satellite Holdings Co. of Hong Kong. The capacity was acquired through Harris CapRock Government Solutions of Fairfax, Va. 

The subcommittee is also proposing a measure designed to ensure “the fair evaluation of competing contractors” in the U.S. Air Force’s Evolved Expendable Launch Vehicle (EELV) program.

National security launches currently are the near-exclusive province of Denver-based United Launch Alliance (ULA), a Boeing-Lockheed Martin joint venture that is prime contractor on the EELV program. 

The Defense Department last year authorized the Air Force to buy up to 36 rocket cores over five years from ULA while setting aside 14 missions for competition. Although the competitively awarded missions will give so-called new entrants like Space Exploration Technologies Corp. (SpaceX) of Hawthorne, Calif., an opportunity to win significant Pentagon launch business, ULA also will be allowed to bid on those missions. 

“SpaceX appreciates the Committee’s oversight of this program which is important to ensuring reliable and assured access to space,” Gwynne Shotwell, president and chief operating officer of SpaceX, said in a statement. “As the [U.S. Government Accountability Office] and others have noted, competition is the key to reducing costs, and SpaceX looks forward to walking onto a level playing field.”

The EELV block buy is part of the Air Force strategy to bring down the cost of a program whose projected price tag has risen significantly during the past decade. This increase has gotten the attention of Congress, which has stepped up its scrutiny of the program in the past few years and pushed hard for competition.

The proposed 2014 authorization bill language calls for the secretary of the Air Force to draw up a comparison of the cost, schedule, performance and mission assurance activities of each company bidding for satellite-launching contracts and to submit the comparison to Congress.

“Competition is welcome when new entrants are fully certified to compete using the same federal acquisition standards expected of ULA,” company spokeswoman Jessica Rye wrote in a statement. “We are uniquely positioned to continue to provide the lowest launch risk for critical, multi-billion dollar space investments.”

Other notable measures in the markup include:

  • The subcommittee requested that the Pentagon begin a review with the U.S. National Research Council of the “near-term and long-term threats to the national security space systems of the United States,” as well as a strategy to address those threats. Potential threats to U.S. military space systems have been a growing concern in recent years, leading the Pentagon to investigate ways to make its constellations more resilient.
     
  • The markup directs the Missile Defense Agency to conduct an analysis of alternatives for any successor to the Precision Tracking Space System program, a proposed constellation of missile tracking satellites that was canceled in the White House’s 2014 budget request. 
     
  • The markup authorizes procurement of 14 ground-based missile interceptors as soon as 2014. The interceptors are part of an effort to beef up the U.S. territorial missile shield announced by U.S. Defense Secretary Chuck Hagel March 15. As part of that plan, Fort Greely, Alaska, would get an additional 14 operational interceptors pending completion of tests to prove that they work as designed.

 

RELATED ARTICLES

Pentagon Renews Controversial Satellite Lease Arrangement

Lawmakers Seek To Curb EELV Block Buy

Air Force To Delay EELV Block Buy, Report Says

U.S. Air Force: EELV Block Buy Won’t Yield Excess Rockets

McCain Cites Conflict in EELV Block Buy Plan

Amendments Call for Tighter Scrutiny of EELV Program