Commercial Firms Press Case for More Government Space Work

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COLORADO SPRINGS, Colo. — Commercial firms are poised to offer U.S. government agencies a variety of new products and services to meet growing demand for imagery, communications and launch capabilities, but their efforts are being impeded by restrictive acquisition rules and budget policies, according to industry executives speaking April 14 at the National Space Symposium here.

“I am absolutely convinced there is a golden opportunity here,” said Michael Hamel, a retired lieutenant general and former commander of the U.S. Air Force Space and Missile Systems Center who is now senior vice president for strategy and development at Orbital Sciences Corp. “Federal budgets aren’t going to grow, but the government’s appetite for space capability will grow inexorably. It is imperative for the commercial sector to deliver more government services.”

U.S. government agencies already rely on private companies to provide high-definition satellite imagery as well as 80 percent of the satellite bandwidth used for communication in military theaters of operation, said Josh Hartman, a senior fellow for technology and public policy at the Center for Strategic and International Studies in Washington. In the future, commercial firms may offer additional services to help government agencies monitor weather on Earth, space weather or satellites in orbit, Hartman said.

When the government relies on private industry for products and services, one of the primary advantages is rapid access to new capabilities, according to members of the panel. “Despite the Defense Department’s dependence on military frequency communications, it cannot procure capacity in the right bandwidths fast enough to meet its needs,” said retired Air Force Maj. Gen. Craig Weston, chief executive of U.S. Space LLC of Dulles, Va., a business established last year to build and launch satellites to provide communications on dedicated military frequencies.

An increasing reliance on commercial firms also would free up government agencies to focus on those projects they are uniquely qualified to tackle. Private industry is not going to build the James Webb Space Telescope, Hamel said. “The government should focus on state-of-the-art,” added retired Gen. Lance Lord, former commander of Air Force Space Command and chief executive of Astrotech Space Operations of Titusville, Fla. “Industry should do the rest.”

Several speakers pointed to NASA’s plans to pay commercial firms to ferry cargo to the international space station as an example of a successful public-private partnership. “There is no question that we have found success in the marketplace largely because of the investment that the government provided,” said Gwynne Shotwell, president of Space Exploration Technologies Corp. (SpaceX) of Hawthorne, Calif. NASA is paying SpaceX and Dulles, Va.-based Orbital to develop new launch vehicles under the Commercial Orbital Transportation Services program. The space agency also awarded the two companies Commercial Resupply Services contracts with a combined value of approximately $3.5 billion to conduct space station cargo flights.

That initial government support has helped SpaceX develop launch vehicles to serve both government and commercial customers. “We are seeing sales coming through,” Shotwell said. “We have got 32 Falcon 9 missions on our manifest.” The Falcon 9 is scheduled to make its inaugural flight in May. SpaceX also has seven missions on its manifest for the Falcon 1, a smaller rocket that has conducted two successful flights, Shotwell said.

In spite of the government’s strong support of commercial launch providers, industry officials said there remain significant obstacles to selling new products and services to government agencies, including detailed federal acquisition regulations and budgetary guidelines that discourage agencies from making multiyear commitments.

“The government spends $600 million a year to purchase commercial satellite bandwidth on the spot market — a very expensive proposition,” Weston said. “But they find it very hard to get their heads around committing to leasing a military-frequency satellite that will be built two-and-a-half years from now. Somehow the government is not able to make that shift in contracting.”

Another obstacle is the government’s aversion to risk, members of the panel said. While commercial firms buy insurance to cover launch losses or premature failure of a spacecraft, government customers try instead to structure programs to guard against any possible failure. That approach adds to the complexity of spacecraft designs, lengthens development cycles and increases cost, Hamel said.

Nevertheless, strong leadership in Washington could help pave the way for greater government reliance on commercial products and services, the panelists said. There are creative ways to structure long-term programs while still complying with federal acquisition regulations, Hamel said. Weston added that Congress could help smooth the way for new public-private partnerships by including language in support of those projects in authorization bills. “I think the Congress can certainly provide some encouragement,” he said.