U.S. defense officials frequently sing the praises of space entrepreneurs and other nontraditional players as technological disrupters bringing much needed innovation into the defense market.
But the question for many in the space sector is when the Pentagon will put its money where its mouth is.
To be sure, there are growing efforts across the military to attract nontraditional suppliers. Tech incubator programs and projects such as the Air Force’s “Pitch Day” and Space Enterprise Consortium are drawing praise from small businesses.
The big-money satellite procurements, however, remain firmly in the clutch of established prime contractors. Nowhere is this reality more apparent than in missile defense satellite programs. The largest is the next-generation Overhead Persistent Infrared constellation, known as Next-Gen OPIR, which is projected to cost billions of dollars to develop and deploy over the next several years. Most of the work for Next-Gen OPIR Block 0 has been contracted to Lockheed Martin and Northrop Grumman.
The Air Force requested nearly $1 billion in 2020 funding for Next-Gen OPIR satellites, including $817 million for the development of three geosynchronous missile-warning satellites being built by Lockheed Martin under a $2.9 billion sole-source contract awarded last year. Northrop Grumman received a $107 million contract to start work on two polar-orbiting satellites.
To keep the program on schedule, the Air Force recently asked Congress to add $161 million to the $703 million appropriated for 2019. Looking ahead, the Air Force projects large funding increases for Next-Gen OPIR over the next several years to accelerate the program: $2 billion in 2021, $2.2 billion in 2022, $2.6 billion in 2023, and $3 billion in 2024.
“It’s an amazing amount of money,” said Bill Gattle, president of L3Harris Space & Intelligence Systems.
Gattle said the industry is closely watching what the Pentagon is doing to diversify its supplier base in space programs. The Missile Defense Agency (MDA), specifically, has been studying options to develop a so-called space sensor layer to defend the United States and allies against ballistic missiles and hypersonic glide vehicles being developed by China and Russia. The newly created Space Development Agency (SDA) also has floated plans to design large constellations of satellites to detect and track enemy missiles.
These are only early concepts. MDA has only funded sensor layer studies. The fledgling SDA is waiting for Congress to approve funds so it can hire people and get spun up.
“They’re talking about hypersonic and ballistic tracking space sensors, and all these other layers. But the money is going to Next-Gen OPIR Block 0,” Gattle said. “We’re all trying to understand how is that going to work.”
Both the MDA and SDA have said they want to work with nontraditional companies, but Gattle said it’s not clear the money will follow. “Do they really want nontraditional input given where they ended up on Block 0?”
Gattle said the rhetoric from MDA and SDA suggests there could be fresh opportunities for companies to challenge incumbents. The proof will be in the budget proposal the Pentagon puts forth for 2021 and beyond — as well as in future decisions on program requirements and who gets what contracts.
The first satellite in Next-Gen OPIR Block 0 is scheduled to launch by 2025. The Air Force Space and Missile Systems Center is studying alternatives for the follow-on Next-Gen OPIR Block 1, which could open the door to new suppliers.
Whatever direction the Air Force takes for the next version of missile warning satellites, Gattle said, “they need to give nontraditional suppliers a chance.” As SMC studies the way ahead for Block 1, he said, the hope is that it will look for ways to “bring in nontraditional thinking.”
Whatever the name, shape or form of future missile defense space layers, L3Harris and others will be hoping for a chance to break the stronghold of incumbents.“It’s a very dynamic market,” Gattle said.
Like the rest of the industry, he said, “we’re trying to figure out who are the winners, who are the losers, who will own these things and who will influence these decisions.”
“On National Security” appears in every issue of SpaceNews magazine. This column ran in the Oct. 7, 2019 issue.
Sandra Erwin covers military space for SpaceNews. She is a veteran national security journalist and former editor of National Defense magazine.