Space industry group warns DoD suppliers are at risk, proposes stimulus measures

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DoD space launch, intelligence collection, satellite manufacturing and other activities are hugely dependent on small companies that are becoming financially strained.

WASHINGTON — In an effort to influence a future coronavirus rescue package, the National Security Space Association has issued a list of proposed actions to help stressed companies in the space sector.

“The long-term ramifications of the COVID-19 virus have yet to be determined but the crisis has already created significant impacts and threats to the national security space industrial base,” NSSA said in an email distributed to government officials and association members on April 11.

NSSA executive director Steve Jacques told SpaceNews that he is hearing growing concerns from the Pentagon and from space industry executives about “unintended consequences down the supply chain” from the pandemic crisis. Jacques noted that DoD already has taken significant actions to aid suppliers, but more specific measures aimed at the space sector should be considered as the COVID-19 economic fallout continues.

“We don’t know how long this will last,” he said. For the Pentagon, the question is what could happen to markets it relies upon like the space industry. DoD space launch, intelligence collection, satellite manufacturing and other activities are hugely dependent on companies that are becoming financially strained, said Jacques. He noted that the national security and commercial space industries use common technologies, share supply chains and depend on a relatively small but highly skilled workforce.

Disruptions to existing contracts and production lines, and shrinking capital markets are imperiling the “new space economy,” the NSSA email said. “The economic and national security threats to the space industrial base from the pandemic are clear and present. Companies lacking cash reserves will furlough their workers, declare bankruptcy, or become targets for foreign capital or takeover.”

The NSSA proposal includes a mix to direct funding actions for space programs and regulatory changes to speed up contract awards.