U.S. military looking to build lasting relationships with commercial space industry

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Aerospace Corp. created a Commercial Space Futures organization to serve as a bridge between the government and the private sector

WASHINGTON — The U.S. military wants to buy more products and services from commercial space companies. This is easier said than done, however, as the Pentagon is still trying to figure out how to work with the new space sector and attract suppliers that have not traditionally pursued government contracts, officials said Dec. 14 at TechCrunch Sessions: Space 2021.

“The pace of innovation on the commercial and industry side is such that in order to be good stewards of the taxpayer dollars, we need to find better ways to leverage commercial innovation,” said Lt. Col. Tim Trimailo of the U.S. Space Force Space Systems Command.

“You’re seeing these smaller satellites; smaller, more more capable components, supercomputing, all the technology that’s coming out of the industry side,” he said. The U.S. military needs to capture that innovation sooner rather than later, Trimailo added. “The U.S. government is not the only government around the world that sees the explosion in innovation that is possible to leverage.”

Trimailo runs a Space Force program known as CASINO — short for commercially augmented space inter-networked operations — that is exploring ways to bring commercial technology into military space systems.

For decades, the military has procured satellites made by defense contractors to bespoke specifications but is now rethinking that approach. 

At Space Systems Command, Trimailo said, “we’re laser focused on the threat and we recognize that we need to kind of shift our mentality to more of a ‘buy before we build’ sort of construct.”

“Traditionally we’ve augmented bespoke custom solutions with commercial capability when we needed to,” he said. “We’re trying to flip that a little bit for certain missions, where we look at the commercial landscape that’s out there and see how much of the requirement we can meet with that first.”

‘Commercial Space Futures’

Steve Isakowitz, president and CEO of the Aerospace Corp., said the military wants to buy commercial products but needs better ways to communicate its needs to the growing ecosystem of space startups and small businesses. 

“The government is very interested in the commercial opportunities. But from the industry standpoint, it’s hard to figure out what door to walk through, and how to make that contact,” said Isakowitz.

Aerospace, a federally funded research and development firm that advises  U.S. government agencies, created an organization inside the company initiative called Commercial Space Futures to serve as a bridge between the government and new commercial entrants. 

This will help address “major obstacles” that currently prevent the government from accessing the commercial industry, he said.  

As a nonprofit, Aerospace can operate as a gatekeeper on behalf of the government. Commercial Space Futures is about “making sure that those entities [that are offering technologies to the government] will, in fact, succeed,” said Isakowitz.

Aerospace will investigate, for example, a company’s finances, business plans and technologies.

Some areas of concern are the origins of a company’s supply chain, cybersecurity capabilities and whether it gets foreign investment, Isakowitz said. 

Conversely on the industry side, “we want to build confidence” in the government as a customer, he said. 

Aerospace would help facilitate companies’ access to facilities to prototype products, he said. “So we’re hoping that through our Commercial Space Futures, we’re going to be able to directly address those things, to work with our government partners to make sure that industry has the best shot” at winning new business.

Startups should build ties with government

Jordan Noone, space industry entrepreneur and co-founder of Embedded Ventures, said he advises startups to pursue “early engagement with the government” to learn the intricacies of doing business with agencies and also to position their companies for future opportunities. “It’s about relationship building,” he said. 

Embedded Ventures backs dual-use technology companies that work in the defense and commercial sectors. The venture firm recently signed a cooperative agreement with the U.S. Space Force to provide insights on VC investment practices and   discuss ways for the government to better leverage privately funded technology.

“We work in a very difficult sector, a very regulated sector,” Noone said. “The government opportunities are very difficult to navigate. And that can be something that almost can be a negative signal to the venture investors that don’t have an interest in defense.”

By the same token, space startups sometimes struggle to tell their story to potential investors and customers, he said. “They make it so complex that they can’t understand what the company’s doing, and that can be really troubling.”

Lt. Col. Walter “Rock” McMillan runs a new Space Force organization called SpaceWERX that was created to work with the emerging space industry. 

McMillan said the military will have to adjust its procurement ways to keep up with fast-paced commercial innovation. 

“In the government we’ve always been accustomed to simply identifying our requirements, putting our requirements on the street, and expecting industry to respond to those requirements,” said McMillan.

“With the pace of innovation, with the pace of new developments specifically in the early stage startup community, that approach of just simply releasing requirements and expecting an immediate response is not the best approach anymore,” he added.

McMillan said the agreement with Embedded Ventures is to create a “framework to have a two-way dialogue.” That means “signaling the things that we want to get after, and having a dialogue with the wider community so they understand where we want to drive the space architectures.”

SpaceWERX uses Small Business Innovation Research funds for projects aimed at attracting space startups. SBIR contracts are small, however, and usually don’t transition into long-term programs that generate steady revenue. McMillan said the companies that have a better chance of winning long-term defense deals are those with dual-use technologies that already serve a commercial market and are not entirely dependent on government funding.