With no satellites in production and U.S. government spending expected to recede in the coming years,Spacecraft Systems and Services is betting that more military and civil space agencies will see the value of buying commercial satellite services instead of owning and operating their own spacecraft.
The U.S. National Geospatial-Intelligence Agency has successfully applied this model to buying commercial satellite imagery, and there are several other modalities where it makes sense for the government to do the same, said Tom Wilson, vice president and general manager of Beltsville, Md.-based ATK Spacecraft Systems and Services.
Wilson’s ATK division brings in about $140 million per year and employs 560 people. The company has a group in Monterey, Calif., that does advanced satellite signal processing. It also maintains engineering support teams at NASA’s Goddard Space Flight Center in Greenbelt, Md., Langley Research Center in Hampton, Va., and the Jet Propulsion Laboratory in Pasadena, Calif.
The bulk of its work force is in Beltsville, where the company integrates and tests spacecraft and builds thermal management components that are used by almost all U.S. government satellites.
In April 2010, ATK shipped the satellite platform it built for the Pentagon’s ORS-1 intelligence and surveillance satellite, which was the first satellite the company built for operational use. ORS-1 launched in June and is based on a design ATK developed for the Air Force’s experimental TacSat-3 hyperspectral imaging satellite.
ATK does not have any unclassified satellites in the pipeline, but it is doing design work for several classified satellites, Wilson said. The company is spending a lot of time and energy working on new hybrid-commercial business models for satellite services, he said. The primary focus has been on a new satellite servicing venture called ViviSat. ATK and its capital partner, U.S. Space LLC of Dulles, Va., in January unveiled plans to develop a robotic spacecraft that could dock with and provide propulsion for commercial spacecraft in geostationary orbit. The company will face competition from MacDonald Dettwiler and Associates of Canada, which also plans to offer satellite servicing, albeit with a different technical approach.
ATK also has its eye on providing space-based environmental data to the U.S. government as a service. The National Oceanic and Atmospheric Administration needs to replace an aging satellite called the Advanced Composition Explorer that provides early warning of solar storms, but it has so far been unable to find the money to do so. ATK and its capital partner, Sentinel Satellite Inc., have proposed building and launching a small space weather satellite with no upfront investment from the agency.
Space-based radar imaging is another service ATK would like to sell to the government. Wilson spoke recently with Space News staff writer Turner Brinton.
ORS-1 has been on orbit for more than a month. How is it doing?
We had a very successful launch and have since that time been conducting initial operations and checkout with our prime contractor, Goodrich Corp. That’s been going very well. We expect that the Air Force will turn over the satellite to U.S. Central Command in mid-August.
What is your outlook for the U.S. government’s demand for small satellites?
The market looks promising for the future. Our adversaries are very aware of the asymmetric advantage that space systems create for us, resulting in a growing threat to our systems. Increasing reliability and survivability can be achieved by disaggregating missions and relying on an architecture of both large and small satellites.
I think we will go through potentially a bit of a flat market for a few years. As budgets contract, one would think that would force the government to find new ways of doing business and acquire less-expensive systems. In reality the government will have to continue to support the large systems that are essential to national security and everyday life. So there will be very little money to start new things.
That’s part of why we’ve come at this from a hybrid-commercial model perspective. The government doesn’t need to spend the development dollars. We’ll spend the development dollars. It can pay for the service, which is three to four years down the road. I feel pretty good about that market strategy.
Do you foresee consolidation in the small satellite market?
I don’t know about consolidation. In this marketplace, it may be some just go out of business. I do believe there will probably be enough niche demonstration missions between NASA and the Defense Department for most of us to stay in business for the next few years. There are a number of opportunities in the classified community that are just starting to develop that look promising in terms of technology demonstration.
What are most of the people in Beltsville working on these days?
A lot of what we’re doing is working to create our future. We are working on some innovative programs that are akin to the public-private partnerships that Europe is doing. We’re looking at developing systems to solve our customers’ compelling needs and selling to them on a fee-for-service basis. We’re looking at developing capabilities from space weather to remote sensing to on-orbit satellite servicing.
Which of these new initiatives is the most mature?
ViviSat, our satellite servicing initiative, is the furthest along. We’ve actually developed a fixed-price offering, our design is mostly complete, and we are talking to several commercial satellite operators about pricing. This is about a simple, reliable way to extend the life of your satellite if it’s going to be running out of propulsion or if there is a problem with the propulsion system.
We think there absolutely is a future market for many types of robotic satellite servicing, but we wanted to take a crawl, walk, run approach to that marketplace by establishing a presence in one of the core missions, which is life extension based on propulsion. We focused on a system design that would dock with a satellite’s apogee kick motor and take over attitude control. When we’re done, we can take it to a graveyard orbit and grab another satellite, so this is a new approach to fleet management. Our Mission Extension Vehicle would have enough fuel to last for as long as 16 years.
How much would the service cost, and how soon could it be available?
We could have a vehicle on orbit within three years of contract. What I can tell you is when you look at the cost of putting a new satellite on orbit to replace a satellite that’s running out of fuel, our service will be less expensive than that. We’ve been through a lot of discussions with the satellite operator community. Originally we went into it thinking we would take a percentage of the revenue that the satellite would continue to generate. But it turns out that’s not exactly how the satellite operator community thinks about it. They think about it in terms of a capital deferment, where they don’t have to pay to put up a satellite. From that perspective, we only need to be cheaper than replacing the satellite itself. Because we haven’t sold one yet, we’re still working out the market pricing, and I wouldn’t say we have it locked down.
Why do you think you haven’t sold one yet?
I think operators are looking at something that is very new. We and they are trying to understand not just how to use ViviSat to extend the life of one satellite, but how to use it for fleet management. You have to look at the entire fleet, what they have coming out of service, where they want to open up new markets, and what frequency allocations they have. Then you have to decide how many and what makes the most sense. It’s complicated, and it’s new. So it’s taking time. And we just finished our initial design to the point where we were able to wrap this into a fixed-price offering in June. So it’s only been recently that we’ve been able to go back to these companies with final pricing and been willing to sign on the dotted line.
Has the U.S. government shown any interest in your satellite life extension service?
It turns out that the U.S. government has done pretty well on propellant management, and a lot of its satellites don’t have that issue. There are a few, and we’re talking to the U.S. government about those. But I believe that commercial industry will probably lead the way on this one. Part of the reason is because they need it more. There’s more of a market out there.
We are in discussions at the policy level for how to actually employ a commercial business model for satellite servicing with a government customer. The National Geospatial-Intelligence Agency has successfully done it with electro-optical imagery, but the government hasn’t figured out how to do that in other segments.
How are you proposing to sell satellite radar imagery to the government?
We’re not going to get out in front of the government there, but we do believe there’s a market for commercial radar information.