Pentagon Report Says Space Systems Are Taking Longer To Develop

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WASHINGTON — A new report by the U.S. defense acquisition czar appears to confirm what many in the space community have long suspected: It takes longer these days to develop space capabilities than it did in the past.

The study, “Performance of the Defense Acquisition System 2013,” found that development times for space programs have grown by 18 months on average since 1995. The report was released June 28 by the office of Frank Kendall, undersecretary of defense for acquisition, logistics and technology.

Though not focused exclusively on space acquisition, the report’s authors reviewed 18 space contracts awarded between 1970 and 1995 and found that the average development time lasted 7.3 years. The corresponding number for 19 contracts awarded after 1995 was 8.8 years, the report said.

Lengthy development cycles is a particularly thorny issue for U.S. Defense Department space programs. By the time complex military satellites are finally ready to launch, they are often carrying outdated technology, which the users are then stuck with for what in many cases can be 10 or more years.

The study also noted that development times for space programs were 1.7 years longer on average than for nonspace programs.

“We can shorten the development times, no doubt about it,” Gen. William Shelton, commander of Air Force Space Command and the service’s top uniformed official for space, said at an event here July 16.

Shelton has stressed in recent months the possibility of moving several core space capabilities from large, complex platforms to smaller, less exquisite satellites that might take less time to design and build.

“You get to the place where you’re not developing a one-of-a kind in every case,” he said.

Shelton said the commercial space industry can complete a satellite project’s development in about three years.  He said the Air Force and its contractors to aim for that level of efficiency.

Loren Thompson, chief operating officer at the Lexington Institute, a think tank in Arlington, Va., said the problems listed in the report most likely date to the Clinton administration and do not take into consideration recent improvements.

For example, one of the most notoriously troubled Air Force satellite development programs, the Space Based Infrared System for missile warning, was put on contract in 1996. The first satellite did not launch until 2011, some nine years later than expected.

“I think the Air Force, in general, has fixed its acquisition system,” Thompson said in an interview.

Thompson pointed to the work done by former Defense Secretary Donald Rumsfeld to correct the acquisitions process and undo what he characterized as a pervasive “lack of discipline.” He also credited the Obama administration for refusing to allow superfluous requirements to overburden and delay several programs.

As proof he pointed to remarks in 2011 by officials at the National Reconnaissance Office (NRO) that each of their space programs were on time and on budget. NRO builds some of the most complex satellites, and while the vast majority are classified, the agency has had well-publicized acquisition debacles in the last two decades.

Meanwhile, the report also suggests that fixed-price contracts, deals in which companies must absorb any cost overruns, might not be as universally beneficial to the customer as is widely assumed. Government satellite contracts are typically cost-plus — meaning the customer is responsible for cost growth — because of the complexity of the technology, but fixed-price deals, which are standard in the commercial space industry, are being increasingly touted as a less-costly alternative that makes sense in a constrained budgetary environment.

Rob Strain, president of Ball Aerospace & Technologies Corp. of Boulder, Colo., for example, recently told SpaceNews in an interview that approximately 40 percent of the company’s government contracts are fixed-price.

Boeing Space and Intelligence Systems of El Segundo, Calif., has also used fixed-price contracts for some of its major military space programs including the Air Force’s Wideband Global Satcom communications satellite system and the GPS 2F navigation constellation.

But the study, which focused on fixed-price contracts as a whole and not exclusively on space programs, suggests caution.

“Contract type alone (e.g. fixed price or cost reimbursable) does not predict lower cost growth in development or early production contracts,” the report said. “This suggests that relying on contact type alone to achieve better affordability outcomes will likely not be successful.”

Thompson said fixed-price contracts can lead to cost savings, but that the format is only successful when both parties negotiate with full transparency. Without such honesty and the full sharing of information, he said, companies may bid too optimistically, rush to test products that aren’t yet ready or customers can ask for capabilities that the contractor may not be able to deliver.