'Space Force' Windfall Unclear for Eager Defense Companies

COLORADO SPRINGS, Colo. — As the Pentagon reorganizes its oversight of space and figures out the right mix of its future satellites, a similar transformation is going on with companies who build the spacecraft, rockets, and technology the Defense Department seeks.

Traditional large defense firms and small commercial startups are  watching closely to see whether Congress will approve the Trump administration plan to create a Space Force, a new sixth branch of the military, and how the new Space Development Agency plans to create a web of hundreds of new military satellites in low-earth orbit.

“We’re in a really critical transitional time, it’s very transformational for something that we all know that we all feel every day,” Bill Gattle, president of Harris Corporation’s Space and Intelligence Systems segment, said in an interview at the Space Symposium, a trade show of military, civilian and commercial space professionals. “It’s changing pretty radically.”

Pentagon efforts to develop new satellite constellations are fragmented, however, and there remains a debate about what kinds of satellites the military should use. In recent years, there have been warnings that China and Russia are building weapons that could shoot down, jam, or hack the Pentagon’s larger navigation, communications, missile warning, and weather satellites. Those intelligence predictions have prompted a call for smaller and cheaper satellites that are closer to Earth and could serve as backups to the larger satellites in higher orbits.

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Fred Kennedy, who has been put in charge of the Space Development Agency, has been tasked by Acting Defense Secretary Patrick Shanahan with coming up with a plan, or architecture, for this new generation of satellite constellations.

“We’re going to be operating a little differently,” Kennedy said at a Tuesday briefing. “If you want to operate with the SDA, we’re trying to move quicker.

“If companies can be flexible, it’ll be better. And if they can’t, well, we’ll see what happens,” he said.

Speed is the name of the game right now.

“Today we just have a lot of ‘we gotta move, go,’ Harris Corp’s Gattle said. “That’s helping, but as industries mature, structure has to come. And the structure has to not kill the speed and affordability.”

Air Force officials say stripping bureaucratic policies will allow them to launch new missile-warning satellites more than three years faster than planned. But only after the get the OK from Congress to realign $623 million to buy hardware for the satellites.

“I think industry has gotten the clear indication that speed matters and that the biggest problem is not on their side of the table with the engineering work, it’s on our side of the table to delegate authority down so that our program managers are managing their programs and not managing the Pentagon,” Air Force Secretary Heather Wilson said.

Some company executives  already are seeing the Pentagon award contracts faster. Among them, Boeing and Hughes, who are building a secure ground stations for military communications satellites. The companies were recipients of one of the first Pentagon contracts awarded using new rapid buying authorities from Congress.

“It seems like the [Defense Department] is holding true to its word that it is simplifying and speeding up its acquisition cycle,” said Richard Lober, Hughes vice president and general manager of defense and intelligence systems.

“I think it works well, particularly for programs like communications where commercial technology is just rapidly moving. It may not make sense for the next aircraft carrier or the next fighter jet … but for communications [and] networks, doing things quicker makes a lot of sense.”

At the same time, legacy companies already in the space business are looking to retool the way they’re structured to get ready for the boom in new satellite buys and the rockets needed to launch them. Among them is Aerojet Rocketdyne, which builds engines for the Atlas V and Delta IV rockets widely used for military space launches.

“I think to some degree, the heritage companies who all have proven track records are being viewed as expensive and relatively slow,” said Jim Maser, senior vice president of the company’s space business unit. “I think we’re kind of lumped into that.”

Part of the way Maser plans to change the stereotype is by partnering with other companies like Sierra Nevada.

“One of the ways I want to accelerate our ability to go fast is to build relationships with some of the entrepreneurial companies and to team with them so that jointly we can go faster,” Maser said. “They can build their reputation based on having an organization and a team that has proven capability, and we can build on their reputation and their culture by going fast and eliminating bureaucracy and slow decision making and get velocity into the system.”

Planet, a California-based company with more than 300 small imaging satellites orbiting Earth, is acquiring Boundless Spatial, a St. Louis-based geospatial software company, to create a subsidiary for its government business. (The National Geospatial-Intelligence Agency is among the company’s defense customers.)

The addition of Boundless Spatial will allow the government and Planet “to have high-bandwidth conversations and come up with good architectures to understand what we feel comfortable [with] about being open in commercial, and how do we create the new pathways and pipes in order to make sure that we can actually get information to those who need it the most, quickly,” said Robbie Schingler, co-founder and chief strategy officer of Planet.

Harris plays in both the large military satellite world, building components on new GPS III satellites, and builds smaller, quick response satellites, so Gattle created two units, one for the large satellites and one for the go-fast ones.

He compared his internal struggle — managing two workforces with different mindsets — to the Pentagon disputes over how best to buy satellites. The Air Force has purchased its large, expensive satellites, which usually take decades to field, through the Space and Missiles Systems Center. But it also  can buy one-off satellites to address urgent battlefield needs through the Space Rapid Capabilities Office (much of their work is classified). Now there’s the new Space Development Agency, eyeing small, cheap constellation satellites.

“What we see from our perspective that both SDA and SMC have a role to play,” Rajeev Gopal, vice president of advanced programs at Hughes. “In some areas, big satellites make sense. In some areas, a lot of small satellite make sense. We are ready to support both of them because we can leverage our commercial experience and technologies.”