How Industry and Government Can Make Commercially Hosted Payloads Work
[Via Satellite 03-30-2016] During his time working with the U.S. Air Force, Earl White, former Air Force senior executive and intelligence advisor at the U.S. Space Security and Defense Program, says that he saw three major unsolicited hosted payload proposals come through Air Force Space Command (AFSPC), each of which “would have leveraged large commercial investments in a primary mission, and potentially provide the government access to capabilities at costs far lower than through dedicated government satellite programs.” Each proposal involved significant time and resource commitments from the companies involved. And, more importantly, each failed.
Flying government-hosted payloads on commercial satellites can help government agencies, such as the U.S. Air Force, leverage cost and schedule savings. In July 2014, the Air Force signaled it was finally working to make commercially hosted payloads a reality when it awarded 14 companies contracts through the Hosted Payload Solutions (HoPS) Indefinite Delivery, Indefinite Quantity (IDIQ) contract. Some programs have been successful, such as the Commercially Hosted Infrared Payload (CHIRP) flight demonstration with SES Government Solutions, which launched in 2011. But even CHIRP, which was extremely successful in helping to track the landing place of Russian Phobos-Grunt Mars mission that failed to leave Earth’s gravity correctly, faced its own challenges. The Air Force had to create its own software for infrared data because available solutions were proprietary.
There are still several challenges, however, that prevent government and industry from taking advantage of these scenarios, including the struggle to sync government and industry timelines, a lack of confidence, and more agile regulation.
“In essence, two timelines collide,” explained White. “Government satellite acquisitions programs are years in the making and balance needs against budgeted resources. If a hosted payload is to be more than a demonstration project, then the place to be considered is at a specific point in the government acquisitions process — and for DoD that is the Analysis of Alternatives (AoA). Industry timelines in contrast are driven by business decisions, and it would be coincidental if the two decision timelines matched. Normally, that means the government has a competed and awarded contract in place when industry comes forward with an unsolicited proposal. The government is essentially being asked to re-compete in the middle of an acquisitions program, and this is no easy thing legally or politically.”
White believes that if the hosted payloads community is more involved in the appropriate AoA, these contracts stand more of a chance, but admits it would be impossible for every satellite company with available Size, Weight, and Power (SWAP) to participate in the AoA process.
“A possible solution to this problem, I think, is found in the example of the Commercial Cell of the Joint Space Operations Center (JSpOC): The Commercial Cell was created by several competing GEO Comsat companies to represent them at the JSpOC. Each member has access to company proprietary information, and represents all the companies to the government. A similar arrangement might allow the wider satellite industry to be represented in the AoAs,” White offered.
This arrangement may also help in circumstances where security concerns can also impede potential contracts. In some cases, satellite programs are classified and therefore the government is barred from revealing the program’s existence to industry. White said he experienced this issue with the Geosynchronous Space Situational Awareness Program (GSSAP), in which a hosted payload proposal presented “an excellent case” for hosting SSA sensors on commercial GEOSATS, but security concerns prevented the government from telling the hosted payload community that the Air Force was building the GSSAP for the same mission.
“Industry continued to invest their resources in a proposal that had no chance of success, and the government was unable to let them know,” said White. “If industry did create a sufficiently small commercial cell to participate in AoAs, the government might be willing to clear these few individuals into classified AoAs to ensure consideration of hosted payloads, and may be able to steer investments away from unproductive areas.”
Lack of Confidence
As the U.S. reliance on space grows, the National Security Space (NSS) program builds systems that it is confident it will need to provide services. Commercially hosted payloads will have to meet
similar standards when it comes to this level of confidence, but face additional challenges when it comes to the government’s level of responsibility in the program, White explained.
“The availability of the hosted payload depends on a strong, well-executed business plan by the company operating the bus and primary payload. With the example of Iridium in mind, the government is justifiably concerned with some business plans,” said White, noting that this type of arrangement comes with a litany of questions. “Will every hosted payload program come with an implied commitment for the U.S. to save or buy the company in case of a business failure, particularly if the alternative was a sale to a high bidder from a country not particularly friendly to the U.S.? How will the federal budget process cope with that kind of insurance? Will industry approach cybersecurity in a way that keeps an intruder from getting to the government data by going through linked commercial systems?”
In order to address this lack of confidence, White suggests that companies remain cognizant of the businesses health while working to be more transparent, allowing governments to access and assess the program’s business plan and technologies. He also suggests that industry could sell services to the government instead of hosting a government-funded payload.
“That could mean selling services from commercial payloads that also meet government needs, as we see in the commercial GEOINT market, or it could mean a company investing in specialized payloads just for government products and services in the expectation of meeting a future need,” White said.
Laws and Regulation
In order for businesses to sell services to the government instead of hosting a government-funded payload, however, would require an adjustment in regulations, as current acquisition legislation allows for the government to purchase hosted payloads, but not services from future satellite systems.
“One of the proposals I saw involved a commercially funded satellite constellation with possible great benefit to the U.S. government,” White told Via Satellite. “Although the business plan was largely commercial, the investors wanted some confidence that the U.S. government might be interested in the kinds of services the system could provide. They asked for a letter of interest — not a commitment, but some confidence that they would be able to compete for services when they were flying. The government, unfortunately, wasn’t able to generate a letter that passed legal review.”
The Judge Advocate General’s Corps (JAG) felt that if the wording was sufficient to provide investor confidence, then it could probably be used against the government in the event of a business failure and, in the end, the company did not build the system and the U.S. lost what might have been a valuable service.
White also notes that the inability to contract for future services was also an issue, since a government organization cannot commit funds they do not yet have, as budgets remain uncertain. “It may have been advantageous to the government, but there was no legal or regulatory mechanism available that we were aware of,” he said.
Lastly, cybersecurity also presents a concern for the government, as “White Hat” hackers have found their way into commercial satellites valuable to government use rerouting services in a way that could have national security implications. According to White, the government has no legal mechanism to force the commercial company to fix instances of cybersecurity breaches.
“Laws and regulations need to allow the government to obtain services and be confident they have the legal and regulatory tools to ensure continued service,” said White.
Despite these issues White said he is encouraged by many “positive trends” he believes are emerging.
“As someone concerned with resilience, I am excited about the large LEO and MEO cross-linked constellations in development. I can see hosted payload opportunities in them for many of the national security space missions,” said White.
He also believes that, from here, it is a natural extension for the Department of Defense to engage with Silicon Valley in other technology areas, which will push new acquisition processes.
“As this partnership develops, the government will have to build the agile acquisitions processes that will then allow them to tap into the NewSpace industry,” White said, noting that the DOD space leadership is “as good as I’ve ever seen it,” and many of the senior leaders have spoken eloquently about the need to work better within all of the space industry.
With new pulls from dynamic NewSpace, government organizations will be forced to adapt or lose out to new technology.
Earl White is the former Air Force senior executive and intelligence advisor for U.S. Space Security and Defense Program and his views expressed in this article do not reflect those of the government or any other organization.