Commercial Innovation Can Transform Space Acquisition

“To be frank, the government approach, and our approach to space acquisition operations, and our approach to our relationship and partnerships with the industrial sector — while they’re strong — have to be relooked at, renewed, refigured, and refreshed.”

Major General Thompson, Vice Commander, U.S. Air Force Space Command, June 2 at the U.S. Chamber of Commerce

It is widely acknowledged that government agencies can spend 30% or more for government-specified items than the private sector. This is commonly understood as the compliance burden of federal contracting. There are many reasons for such a markup, namely the requirements mandated to ensure reliability and predictability in the decision-making process. All of these are important factors to consider when, for instance, sending a person into space.

An array of new challenges confront our country, not the least of which reside in low Earth orbit and beyond where a new frontier is emerging with an entirely new set of vulnerabilities for the United States. U.S. national security and commercial reliance on space-based assets cannot be overstated. From GPS systems underpinning aerospace and maritime navigation to satellites that link business and personal communication devices, use of space technologies are a prerequisite for a 21^st century society in the same way that seafaring and shipping lane access was in the 18th and 19th centuries.

Sadly, the United States has slowly lost its focus on space over the past decade, most poignantly illustrated by shutting down manned spaceflight from Cape Canaveral in mid-2011. Today, we pay an extraordinary sum to Russia to provide American astronauts seats aboard their Soyuz capsules. The country that led the way into the space age is now just a passenger.

Increasingly, U.S. government acquisition is out of step with the fundamental driver of the U.S. and worldwide economy: technology. As a stark example, the Department of Defense’s (DOD) share of global R&D is only 5 percent today as compared to prior decades when such innovation investments dominated entire industrial sectors.

History is instructive here. During the Cold War, the federal government exerted control over the elements of the private sector engaged in the space economy through a number of mechanisms, largely contractual incentives to assist in developing new technologies and applications for use in military hardware. This pairing of interests witnessed the rise of American economic growth in parallel to its military prowess. Back then, the pace of government acquisition of cutting edge systems matched the pace of technological development. The government’s identified needs pushed the technological envelope in materials science, communications, electronics, design, and many other areas.

However, today, that alignment has fundamentally shifted and the DOD is trying to harness the commercial sector to ensure the efficacy of its future systems. As the 21^st century has unfolded, government procurement has slowed due to erratic funding and steady bureaucratic accretion, while the speed of technological development continues to accelerate. As the possibilities and opportunities for tapping the resource of space develop rapidly, including the return to manned flight in the near future, we must re-emphasize the role of robust competition and innovation to support future commercial and government applications.

The original Space Act of 1958 bypassed standard procurement rules and regulations and gave broad authority for NASA to seek, develop, and acquire the capabilities the Mercury, Gemini, and Apollo programs required. While detaching future space program acquisition from the burdens of existing compliance regimes has its risks, it would also provide great boons to execution: namely reducing funding requirements and accelerating the pace of engineering, manufacturing, and development (EMD). The pivotal issue for decision makers is determining when that risk outweighs the economic and national security threat posed by the decline of American space dominance.

In this era when the United States has stepped back from manned missions on U.S. soil, the time has come to once again unleash the private sector in pursuit of our national space objectives. Hitching a ride to the space station notwithstanding, the United States remains at the forefront of space development, but we won’t be for long as competition grows by other spacefaring nations. If we don’t step up our game using our greatest asset – the private sector – we risk being left behind.