Air Force space consortium funding could grow to $12 billion over the next decade
WASHINGTON — The news that the Air Force is recompeting the management contract of its Space Enterprise Consortium took many by surprise. In a Request for Information posted Aug. 20, the Air Force Space and Missile Systems Center announced it is doing market research with the goal to select a new contractor next year to manage the consortium, known as SpEC.
The current manager of the SpEC, a company named ATI, received a five-year contract in November 2017. The contract is being recompeted three years early not because the company is underperforming but because the SpEC is growing much faster than expected, Col. Timothy Sejba, director of innovation and prototyping at the Air Force Space and Missile Systems Center, told SpaceNews.
The consortium’s membership and workload have jumped dramatically in less than two years due to rising demand for space technology prototypes, Sejba said. Given projections of even greater demand, the Air Force is considering expanding the SpEC management contract from five to 10 years, and increasing the funds available for projects from the current $500 million to $12 billion over the next decade. The consortium manages development contracts for pre-production prototypes of spacecraft, payloads, ground systems and other space technologies.
“SpEC is a huge success story,” Sejba said.
The consortium currently has 325 members, a mix of traditional defense contractors, startups and purely commercial space firms. To date SpEC has awarded 54 prototype contracts in 16 different project areas worth about $312 million. Sejba said there are additional projects that soon will be awarded worth $197 million.These include secure communications satellite prototypes and cyber defenses for ground systems.
The rapid growth of the SpEC has been driven in part by the addition of new customers. The consortium’s projects mostly are for Air Force organizations but SpEC also supports the Army and the Department of Defense. The contracts awarded by the consortium are so-called Other Transaction Authority, or OTA, deals where companies agree to partially fund projects. When large defense contractors win a contract, they are required to partner with nontraditional firms.
When the original contract was awarded to ATI in 2017, the funding ceiling for projects was $100 million. “It didn’t take long to realize the early ceiling was going to have to be raised due to the demand,” Sejba said. By 2018 it was increased to $500 million but that won’t be enough to fill anticipated requirements. “We recognize now that because of the great demand, we need a higher ceiling and a contract with a longer period of performance,” he said. “We’re contemplating a 10-year $12 billion competition. This will allow us to sustain the efforts that we started in the past two years over the long term.”