A new office within the Space Force’s procurement command will buck traditional military programs by only buying technologies that the space industry provides as a service.
“With so many new capabilities being provided by industry, commercial services are taking off in ways that we never probably imagined just a few years ago,” said Brig. Gen. Timothy Sejba, program executive officer for space domain awareness and combat power at the Space Systems Command.
The command’s Commercial Services Office, known as COMSO, was established earlier this year amid fears that the military is missing out on proven and promising technologies due to procurement bottlenecks and a culture that tilts toward developing government-owned systems.
“We need to figure out how do we go and buy not just satellite communications but things like space domain awareness — and other capabilities that are being turned into services — that we might want to leverage both in peacetime and certainly in time of conflict,” Sejba said Oct. 19 at the Space Industry Days conference in Los Angeles.
Jeremy Leader, a former U.S. Air Force space officer and procurement executive, was named director of COMSO in April. He said there is a push from the top to buy commercially available services — including satellite imagery, weather forecasting, space data analytics, inspace data relay and others that might emerge in the future — to augment or replace traditional procurements of military hardware.
The attitude is to “exploit what we have, buy what we can and only build what we must,” Leader told SpaceNews.
COMSO is part of the Los Angeles-based Space Systems Command but will operate primarily in the Washington, D.C., area with at least two planned locations in Northern Virginia.
The majority of commercial deals COMSO will award in the near term will be for satellite communications services, estimated at about $1 billion a year, he said. But over time, billions more are expected to shift from hardware procurements to a broader range of commercial services.
“The ‘buy what we can’ piece includes going to commercial space services already available before building exotic, one-off military-centric systems,” he said. “We have historically done programs of record only in the ‘build’ category, and our requirements and budgeting processes are built for that as well.”
COMSO will be keeping a close eye on where the market is going, Leader said, especially in dual-use areas where there is both government and commercial demand.
“When there’s new and interesting opportunities, I want to make sure that our office stays agile enough to capitalize on those,” he said.
ACCESS TO SATELLITE IMAGERY
One of COMSO’s locations in Northern Virginia will be in Chantilly, near the National Reconnaissance Office.
The location is not coincidental, said Leader, as COMSO is trying to take a page from the NRO’s commercial contracting playbook. The Space Force is particularly interested in learning how it can work more closely with the NRO to take advantage of the agency’s long-term deals with commercial providers of electro-optical, radar and radio-frequency satellite imagery.
The intelligence community is “a little bit ahead of us in this effort,” he said. “How the NRO structured their agreements is awesome. It allows the Space Force to actually use the contracts that are already there.”
COMSO wants to set up additional contract vehicles to support specific needs of DoD organizations for imagery and data analytics services. If a combatant command, for example, is not getting what they want from the intelligence community, Leader said, “we’ll have the ability to set up an augmented contract to help fill the gaps.”
The idea is to partner with the NRO, not to engage in bureaucratic turf battles, he added. “I’m less worried about who owns a mission area and more worried about delivering capability.”
COMSO will launch pilot programs in the coming year with combatant commands that have a growing demand for tactical intelligence, and experiment with different contracting approaches, said Leader. “If we need contracts to buy the analytics products in times of crisis or contingencies, then we need to have that menu for combatant commanders, versus them going off and trying to figure it out on their own.”
Chris Worley, vice president and general manager of Maxar’s defense business, said the industry is eager to see DoD take advantage of commercial data and analytics services. Maxar is the NRO’s largest commercial imagery supplier.
But for commercial companies to be able to support the government, “it’s important to be an integrated part of the architecture of how information is provided to the warfighter,” Worley said Oct. 25 at a Mitchell Institute for Aerospace Studies conference.
The market is constantly putting out new products, he said. Military users want these products, “but how are we going to bring them?” That is a significant question because providers need to know if they will be connected to the military’s mesh network, for example, or if they must bring their own systems.
“I think there needs to be a broader dialogue on policy and concepts,” Worley said.
SPACE DOMAIN AWARENESS
An emerging commercial services opportunity is data analytics for space domain awareness, said Col. Joseph Roth, director of innovation and prototyping at Space Systems Command. The Space Force buys data collected by private companies but also needs help analyzing the military’s own data acquired by the Space Surveillance Network sensors.
“We’re looking for analytical tools and capabilities to analyze information that the Space Force is collecting on a regular basis,” he said. “We have some of the most exquisite capabilities in the world when it comes to telescopes and radars around the globe,” he said. “The challenge that we face right now is in many cases, we cannot get all the data off of those sensors to take advantage of that exquisite information.”
Leader said space domain awareness, or SDA, is the next category of services, after satellite communications, likely to see growth.
An online SDA marketplace — a portal where companies can sell data to the government — was created by the Space Systems Command a few years ago and will transition to COMSO. The plan is to set up contract vehicles to make commercial data more accessible to any government organization, including the Department of Commerce’s emerging space traffic management office.
“We are doing a pilot program with the Office of Space Commerce,” said Leader. “COMSO will ensure that the data we buy from one place has the ability to be transitioned into the Department of Commerce.”
Barbara Golf, strategic adviser to the U.S. Space Force for space domain awareness, works with many startups and commercial companies that pitch products to the military. Her assessment of the industry, she told SpaceNews, is that it is “providing mature enough technology that it can be acquired as a service under contract.”
“We are doing this today,” she said. “However, we do not currently use or encourage the use of long-term, greater than one-year contracts in order to maintain competitive pressure on providers to continue upgrading and improving capabilities,” Golf added. “This is based on lessons learned from previous failures in incorporating commercial capabilities into operations.”
Transitioning to long-term service contracts will be easier said than done, she said. Some of the challenges will be “maintaining competition across the procurement and operations construct for commercial capabilities in order to avoid vendor-lock and limit price instabilities.”
Other hurdles ahead, said Golf, include “expanding funding lines and supporting infrastructure to enable the on-boarding of the rapidly advancing commercial capabilities demonstrated in our operations.”
DECIDING WHAT TO BUY COMMERCIAL
Although the idea of “buying what we can” seems straightforward, it can quickly get complicated, Leader said.
It’s a discussion around the question of what space capabilities should be “inherently governmental,” and which could be acquired commercially, he said. “And the answer often depends on who you talk to.”
The Global Positioning System that provides positioning, navigation and timing (PNT) is a case in point, Leader noted. “We see markets emerging for alternative PNT solutions even though GPS is inherently governmental today.”
Going forward, he said, “as we understand how commercial markets are evolving and where those services are at, I’m keenly looking at how we define what that inherently governmental piece is.”
Leader cautioned that the government has to be careful not to inadvertently “kill” a sector of the industry by funding in-house programs that compete directly with commercial services. “When a market starts to evolve, we need to get out of the way and let it grow.”
Market areas to watch will be weather data and SDA, where the Space Force is looking to buy commercial services but where the government also provides data at no cost to users. In these markets where there’s a lot of free data, companies compete by offering value-added services like analytics. Nevertheless, “we have to make sure that we’re not destroying the market before it has the chance to exist,” said Leader.
With satellite imagery, the NRO has shown a smart approach for negotiating data rights and user licenses, he said. The agreements allow the intelligence community to share imagery with allies and other government agencies but also ensure providers are compensated, he said. “I think that’s a great model for not killing the market and it has some applicability in other areas such as space domain awareness,” Leader said.
As COMSO works to get its house in order, an immediate task will be to set up a working capital fund where military customers will transfer money to pay for commercial services.
Congress in 2015 authorized DoD to set up a working capital fund to facilitate the procurement of satellite communications services. Leader said the existing working capital fund needs to be broadened so customers can buy other space industry services.
“For most people, this is kind of in the weeds, but it’s a very important piece,” he said. “What will make the commercial services office effective is having the right contractual and financial tools to do these things smartly and quickly. And a working capital fund is a huge win.”
A more grueling effort will be to realign funding in the Pentagon’s five-year budget plans. That will require shifting funds from “programs of record” that the Space Force traditionally would spend on new development or bespoke systems, to a separate funding line for commercial services. “We need a way to move the money so when commercial capabilities exist to meet requirements, program offices have the ability to move between the ‘buy’ and ‘build’ button,” Leader said.
In addition, the Space Force will have to articulate in so-called requirements documents why it makes sense to buy commercial service, he noted. “We have to develop the requirements process around commercial services,” he added. “The byproduct of that is how we budget directly for commercial, how we build a contractual infrastructure that will allow the combatant commands to go fast.”
CONTRACTING FOR WARTIME OPERATIONS
As it looks to buy commercial services, the Space Force wants to make sure there are agreements in place to ensure military customers are prioritized during a conflict or emergency.
The NRO’s version of that is the Civil Reserve Space Fleet, an agreement that allows the agency and DoD to request that commercial imagery suppliers collect data over a designated area for exclusive U.S. government use. DoD also has agreements with commercial airlines under the Civil Reserve Air Fleet to get additional airlift capacity during a crisis.
Roth said the Space Systems Command plans to meet with industry representatives in January to discuss concepts for a Commercial Augmentation Space Reserve.
This is an important topic, he said, because if the Space Force is going to rely on commercial industry, it needs to know they will be there in wartime and that “if it’s an unpopular conflict, that they don’t decide to turn their capabilities off.”
An industry day event on this subject will be held in the Washington, D.C., area early next year to allow White House and congressional participation, said Roth. “We definitely need the best and brightest minds working on that.”
Brig. Gen. Dennis Bythewood, deputy commander of the Joint Task Force Space Defense under U.S. Space Command, said commercial augmentation contracts are an area of growing interest, particularly since Russia’s invasion of Ukraine and the central role that commercial satellites have played in that conflict.
“What we really need to think through is what are the liabilities that are put on the commercial industry,” he said at the Space Industry Days conference. “A warfighting environment won’t be benign, and we need to make sure they are there to augment us,” Bythewood added. “So I do think there’s a lot of work to be done here.”
Leader said these discussions need to happen sooner rather than later given the unpredictability of world events. “The day you need a commercial service isn’t the day you start negotiating contracts or integrating the capability,” he said. “So all the more reason that we should have ways to onramp those capabilities.”
This article originally appeared in the November 2022 issue of SpaceNews magazine.
