The following was adapted from May 4 remarks at the 9th Reinventing Space Conference in Los Angeles.

We are all aware that, during recent decades, national security space capabilities have become essential to America’s military forces, intelligence operations and foreign policy. We also know that important aspects of our national economy, industrial activity and public safety depend on commercial satellites as well as on dual-use space systems developed and operated by the U.S. military and other federal agencies. It has been estimated that space systems and related products and services directly contributed over $150 billion to our country’s gross domestic product in 2010; the indirect impact on public services and private businesses enabled by space probably generated economic value amounting to several times this total. As a result, our economic well-being as well as our national security and international standing depend on space systems to an extent that would have been unimaginable 50 years ago, at the dawn of the space age.

However, the last 10 or 15 years have pointed out some serious problems in recent national security space system acquisition programs. These problems have prevented space capabilities from being as accessible or effective as they might have been in the near-term, and continue to threaten their continued vitality and relevance in the longer term. Despite recent improvements by both government and industry, these problems persist today in many major space acquisitions and are likely to be exacerbated by increasing federal budget pressures and a less friendly space operational environment in the decade ahead. 

There are three basic manifestations of these problems:

First, while many of our national security space programs produce highly capable systems with impressive technical performance, this often comes at the expense of complexity in the individual satellites and brittleness in their overall architecture. As a result, several important mission areas are vulnerable to one-failure losses, putting us just a single problem away from serious gaps in critical capabilities. This situation is likely to become of even greater concern in the years immediately ahead, as an increasingly contested space environment reflects our adversaries’ attempts to reduce the advantages the U.S. enjoys in space. These may include direct attacks on our satellites and ground systems, as others also realize the fragility of many of our vital space systems.

Second, many of our space programs are characterized by excessively long development cycles and infrequent technology upgrades. It is common for large programs to take a decade or longer to deliver a satellite, and to miss their expected deployment dates by three or four years. In some cases, major systems end up using technology that lags a generation or two behind the available commercial state-of-the-art. The opportunities to incorporate technological advances often are few and far between. As a result, one of America’s strongest sources of competitive advantage — technological innovation — is undermined, especially in an era when security threats are rapidly evolving.

Third, many national security space programs have very high and inherently unpredictable acquisition costs. In recent years, some individual satellites have cost well in excess of $1 billion, partly the result of average unit cost overruns greater than 100 percent in the 10 largest space programs. The costs of intermediate and heavy launchers have also escalated rapidly. Altogether, there have been over 15 Nunn-McCurdy breaches in the 10 largest satellite and rocket programs during the past decade alone, undermining the credibility of our industry in the Pentagon and Congress. Looking ahead, budget pressures are likely to become even more severe. As Defense Secretary Robert Gates has made clear, the “defense spending gusher” has been turned off, where it is likely to remain for years to come. Therefore, what are now viewed as potential 10 to 15 percent cuts to the Air Force’s 2012 modernization funding request are only a preview of the 25 to 30 percent reductions from today’s levels that we may see by mid-decade.

Of course, no one would argue that the space professionals making and implementing system acquisition decisions in the 1980s and 1990s were not experienced or dedicated. Rather, the opposite was true: The technical, operational and fiscal circumstances in past decades — from early dependence on the space shuttle for space access, to the achievable performance from available technologies, to the newly emerging strategic and tactical demands for space capabilities — drove them to a completely logical and consistent set of choices for space system architectures and acquisition programs. But today new realities require new thinking and different actions.

Fortunately, we now have a better way to select the architectures and manage the acquisitions of national security space systems. It involves fundamental changes in both what is purchased and how it is bought. Adopting these changes in a manner so as to maintain the continuity of existing critical functions will not be easy, nor will the inertia of the status quo naturally give way to new ideas. But the imperatives for change demand that we embrace new ideas and adopt new approaches, as the prospects for severe budget cuts and truly contested space operations are real and immediate.

In my view, the better alternative for space architectures — which define “what” is to be bought and deployed — is to disaggregate capabilities among smaller, less complex and more numerous platforms. This would reverse the trend of concentrating major capabilities on larger, more powerful but fewer spacecraft. Such a distributed approach would feature single or at most dual payload systems optimized for a specific mission. It would apply advanced payload and platform technologies to simplify systems and reduce their costs, instead of pushing for the last 10 percent of possible technical performance. It would naturally conform to faster, less risky development cycles and would allow for more frequent opportunities to update key subsystem and payload technologies. It would also lead to smoother, more continuous production programs and more predictable demand for the supply chains of space system integrators. Because individual satellites would be smaller and less expensive, launch vehicle lift capacity would not be pushed to the upper bounds of performance and cost. For similar reasons, mission assurance activities would be more affordable as well. Finally, such disaggregated and distributed architectures would be more survivable and flexible, and in some cases more conducive to international participation.

In a similar way, the better alternative for acquisition practices — the “how” of such purchases — would be based on the relevant directives in Pentagon acquisition chief Ashton Carter’s recent efficiency guidelines, foremost among them being the emphasis on affordability as a first-order factor in military purchase decisions. In this regard, the space industry will have an obligation to identify those system designs that can achieve “90 percent solutions” in return for substantial cost savings. For their part, government agencies will have a related obligation to fully consider commercial systems and practices, which will usually mean reducing government-unique technical standards and low-added-value compliance requirements, reviews, reports and audits. Similarly, industry will need to be prepared to stand behind its cost and schedule commitments with commercial-type contracts that put its profit on the line for poor performance, and government will need to structure procurements in ways that promote effective competition within a more diverse and innovative industrial base.

There are reasons for cautious optimism that these kinds of new system architectures and acquisition practices can effectively perform a wide range of major national security space missions, and can begin to do so within the next five years. There is also compelling evidence that such approaches will be substantially more affordable and adaptable than those of current main-line space programs. And if we are smart and disciplined in the way we go about managing them, I believe it will be possible to avoid the mistakes of “acquisition reform” attempts in the 1990s, including unacceptable reductions in mission success for the military and inadequate program profitability for industry.

Here are three examples of recent progress in alternative architectures and acquisition practices that strongly suggest to me that practical, affordable and resilient capabilities can be fielded on a large scale by the second half of this decade:

First, important technology advances have occurred during the last 10 years in a range of mission payloads that enable less-complex and less-expensive approaches to demanding national security missions. These advances have been wide-ranging: from staring infrared sensors and large, agile focal plane arrays, to adaptive mirror technology and space-qualified electronically steered antennas, to space-to-space and space-to-ground laser communications, and massive on-board data processing and storage.

Second, successful technology demonstrations and operational adjunct missions have been carried out by various government agencies and their industry partners over the last five years, with several more due for launch in the months ahead. These programs, a number of which have achieved quite impressive results, have not only raised the readiness levels of key payload technologies, but also have reconfirmed our ability to conduct fast-cycle, lower-cost acquisitions that produce serious new military and intelligence capabilities.

Third, commercial satellite platforms have continued to improve in efficiency, reliability and longevity, while their manufacturing processes and operations methods have also steadily improved. By quickly incorporating incremental technology advances and building 12 to 15 satellites a year on two- to three-year order-to-delivery cycles, the three primary U.S. commercial spacecraft builders — Boeing, Loral and Orbital — have reduced the capital cost to produce and deploy a unit of communications capacity by an average of 10 to 12 percent a year for the last 30 years. Having built Orbital’s business for almost 30 years at the crossroads of commercial, civil government and national security space markets, I have seen the powerful effects of this “virtuous circle”: regular design and manufacturing cadence, steady product improvements, robust supply chains, short cycle times, and disciplined cost and schedule management have resulted in a 25-fold improvement in the cost-per-transponder-year of satcom capacity since 1980.

Now it is time to consolidate and apply these advances more broadly to our national security space programs. The daunting challenges the space community faces today — especially the likelihood of a historic downturn in federal spending and the emergence of serious threats by adversaries to our space operations — are fortunately well-matched by exciting possibilities that are before us — possibilities based on new technologies, new architectures and new acquisition approaches. Together, these factors make this the perfect time to “reinvent space.”


David W. Thompson is chief executive of Orbital Sciences Corp.