U.S. Air Force Awards Contracts To Study Outsourcing of Satellite Operations

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WASHINGTON — With possible budget cuts on the horizon, the U.S. Air Force has contracted with at least four companies to examine how they might pick up the slack should the service elect to shutter one or more of its satellite-operating facilities, according to industry officials.

The Air Force in September awarded contracts of an undisclosed amount to Intelsat General Corp. of Bethesda, Maryland, Northrop Grumman Corp. of Falls Church, Virginia, Universal Space Network of Horsham, Pennsylvania, and Raytheon Intelligence and Information Systems of Dulles, Virginia, sources said.

The contracts, which the industry source said are relatively small, come as the Air Force faces shrinking budgets and the potential return of the across-the-board spending cuts known as sequestration.

Gen. John Hyten, the commander of Air Force Space Command, told SpaceNews Sept. 8 that if sequestration returned for fiscal year 2016, the service likely would be forced to shutter some of its satellite ground-based architecture. A 2013 budget compromise eased some of sequestration’s more severe impacts for 2014 and 2015, but the law remains in effect.

For years, commercial operators have told Air Force leaders they could handle the work of the service’s stations at a significantly reduced cost.

The recently awarded study contracts call for the selected companies to price out several scenarios, including how they could fill the gap if the service closed one or more of the seven sites that comprise the Air Force Satellite Control Network (AFSCN).

The network, which is centered at Schriever Air Force Base in Colorado, is staffed by Air Force personnel with support from government contractors like Honeywell Aerospace and Harris Corp. By all accounts, the infrastructure is antiquated, inefficient and badly in need of modernization.

Industry officials believe that with automation and other commercial techniques the number of personnel required to operate the Air Force’s satellites could be reduced by anywhere from 50 percent to as much 80 percent. They also note that several companies own their own satellite-operating infrastructure.

The companies will examine concepts that would “allow the Air Force to contract for a satellite command and control service at a fraction of the cost of operating the AFSCN today,” Eric Moltzau, senior principal director at Intelsat General, said in a Sept. 22 statement.

In a report sent to congressional defense committees in April, the Air Force said it expected to award three contracts to examine options for commercializing its satellite operations. Ultimately, the service awarded at least four study contracts, industry sources said.

“This information will allow the Air Force to determine the best approach to offloading contacts to a commercial network,” the report said. “Ultimately, the solution will enable the Air Force to define levels of contract services, reducing dependency on a unique Air Force network for routine operations.”

Industry officials say it would take two to three years to begin taking over some Air Force satellite operations from the time of a decision to do so. Should that happen, an actual request for proposals likely would not be released before 2016, they said, with the transfer of some assets to commercial networks following three to five years later.

In the June solicitation that resulted in the study contracts, the Air Force asked industry to examine and price out four options: operating the service’s research and development satellites; operating its geosynchronous-orbiting satellites; operating a limited number of geosynchronous satellites; and picking up the responsibilities of a single shuttered Air Force ground station.

John Williams, president and chief executive of Universal Space Network, which operates government and privately owned satellites on a contract basis, said the Air Force’s savings would depend on how much of the network the service turns over to commercial businesses. He nonetheless described the potential savings as “significant.”