House Armed Services Committee denies funding for Space Development Agency

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The committee cited concerns about the "turmoil surrounding the Space Development Agency."

WASHINGTON — The chairman and ranking member of the House Armed Services Committee have denied a Pentagon request to allocate $15 million to the Space Development Agency in fiscal year 2019. They made that decision based on concerns about a leadership upheaval at the four-month-old agency and confusion about what it is supposed to do.

“The committee denies the proposed $15 million increase to SDA Space Technology Development and Prototyping in its entirety,” Chairman Adam Smith (D-Wash.) and Ranking Member Mac Thornberry (R-Texas) wrote in a July 3 letter to Pentagon Comptroller David Norquist. The HASC completed its review of DoD reprogramming requests for fiscal year 2019 that totaled approximately $518 million over a number of fiscal years.

Fiscal year 2019 ends September 30 and it’s unclear when Congress will pass a new budget for 2020. The HASC decision to reject the reprogramming request for the SDA essentially cripples the agency which is scheduled to host an Industry Day later this month to discuss upcoming projects with interested contractors.

The existence of the HASC letter was first reported by InsideDefense.com. SpaceNews obtained a copy of the letter.

“The committee is concerned about the turmoil surrounding the Space Development Agency and uncertainty about program plans and leadership, shortly after its establishment in March 2019,” said the letter.

“Specifically, the committee is concerned about the abrupt resignation of the director and the apparent change in direction for this proposed program, contrary to planned activities that had been briefed to the committee and contrary to what the committee supported,” the letter said. Former SDA director Fred Kennedy resigned June 19. Sources said Kennedy quit following clashes with Undersecretary of Defense for Research and Engineering Mike Griffin over how the agency should be run.

The HASC letter noted that the requested reprogramming of $15 million would be an “initial downpayment on a total cost of $558 million,” that DoD projected to request for the SDA over five years. “Due to this abrupt change in direction and confusion with regard to the SDA, the request for $15 million is denied,” the committee leaders wrote.

According to DoD sources, troubles at the SDA had been brewing and were accelerated by the sudden resignation of the agency’s champion Patrick Shanahan as acting secretary of defense.

Under Kennedy, the SDA laid out an ambitious agenda to design a large constellation of small satellites in low Earth orbit using commercial products. Griffin was counting on Shanahan to ensure reprogramming of funds from other accounts for SDA to get off the ground. In the March 12 memo that created the SDA, Shanahan wrote that Griffin would work with the DoD comptroller to reprogram funds during fiscal year 2019.

After Shanahan departed, one DoD official said, “I don’t see anyone pulling the levers to shift money.”