he U.S. intelligence community will have more influence over procurements funded by the intelligence budget under a top-level agreement that some national security experts say likely will limit the discretion of the National Reconnaissance Office (NRO) in managing spy satellite programs.

Under an initial memorandum of agreement, signed March 11 by U.S. Director of National Intelligence (DNI) Mike McConnell and March 12 by Defense Secretary Robert Gates, the Pentagon and intelligence community will share what is known as milestone decision authority for programs funded wholly or primarily by the so-called National Intelligence Program. This includes programs executed by the NRO and its sister agencies, including the National Geospatial-Intelligence Agency, National Security Agency and Defense Intelligence Agency.

The memo, a copy of which was obtained by Space News, codifies the Intelligence Reform and Terrorism Prevention Act of 2004, the law that created the DNI. Before the memo, which had been under discussion for more that a year, the Defense Department wielded most of the decision-making authority because the law was not explicit about the DNI’s role. But experts said the memo represents a compromise because it also gives the Pentagon a formal place at the decision-making table even for acquisitions exclusively funded by the National Intelligence Program.

The memo’s impact on the NRO’s milestone decision authority – or power to move a program from one phase of the procurement process to the next – is a matter of interpretation. According to the memo, milestone decision authority for National Intelligence Program-funded efforts will reside with the acquisition chiefs at the Defense Department and the Office of the DNI. This has long been the case, but in practice the authority has been delegated agencies like the NRO.

Some intelligence experts say that no longer will be the case. They said the acquisition authority will no longer be delegated as a matter or course but only by explicit directive. The memo says milestone decision authority will be delegated “only after a thorough review has been conducted by the advisors” of the deputy director of national intelligence for acquisition and the undersecretary of defense for acquisition, technology and logistics. Those positions are currently held by Alden Munson and John Young, respectively.

The memo also says the Pentagon and DNI acquisition chiefs will conduct quarterly reviews of National Intelligence Program-funded procurements. For programs that are not meeting performance goals, the memo says, the Defense Secretary or DNI, “or their designees, may conduct a more detailed program review” of the program and take actions to improve performance.

“This is [the Defense Department’s] way of saying to the NRO, ‘you are not in charge anymore on these programs,’” said one former intelligence official who saw the memo.

A congressional source agreed. “The Department of Defense now has a lot stronger hand in all the NRO’s acquisitions than they have had in the past,” this aide said.

The NRO, for its part, responded positively to the memo. As part of a broader statement provided to Space News March 21, NRO Director Scott Large said: “This new agreement highlights the strengthening of intelligence and defense acquisition collaboration that will ultimately improve the delivery of critical space intelligence capabilities. It reaffirms the already strong bond that exists between the NRO, intelligence community and the Department of Defense men and women we have supported around the world by the collection and delivery of life saving intelligence for almost 50 years.”

The NRO statement goes on to say that milestone decision authority for acquisition programs will be delegated to the NRO and its sister agencies for some programs but not for others.

Like its counterparts in the U.S. Air Force, the NRO has struggled with some satellite acquisition programs in recent years, most notably the Future Imagery Architecture, a new generation of optical and radar imaging satellites. These problems forced the cancellation of the NRO’s contract with St. Louis-based Boeing Integrated Defense System for the optical portion of the program.

More recently, the NRO was stripped of its milestone decision authority, at least temporarily, on a program dubbed Broad Area Satellite Imagery Collection, which is in its beginning stages. According to two intelligence sources, the Defense Department and DNI have or are preparing to take similar action on two other NRO programs.

In its statement, the NRO said it has taken “great strides this year” to reorganize itself and improve its acquisition processes as well as to improve the quality and timeliness of its data products.