Challenges and Success Factors
What are the challenges and success factors for commercially hosted payloads? Beyond the individual technical challenges, there are procurement, regulatory, and security policy issues that need to be addressed on a case-by-case basis. Federal Acquisition Regulations (FAR) complexities, export and munitions controls need to be addressed. "The current procurement policies make it an exception to do something along the hosted payload lines. The contracting is different. It is somewhere between government contracting and commercial contracting," says Freidman. "There are certain elements of our spacecraft design and build process that for the [Department of Defense] to take full advantage of they need to reorient their thinking from the way they have traditionally acquired satellites, and look to how the processes we have can be accommodated within their FAR process," says Demers.
Unlike the purchase of a space system, hosted payload programs require the buying agency to manage a more complex effort involving three business relationships, including the payload supplier, spacecraft manufacturer and spacecraft operator. To fly packages on commercial satellites, military space planners have to synchronize their requirements with the engineering design requirement of the commercial operator. "If a government agency wants a particular orbital slot, they’ve got to coordinate with our primary mission, engineering and scheduling, and that’s not traditionally the way they’ve worked," says Demers.
For example, trying to impose military standards could negatively impact the competitiveness of commercial satellite systems. "For more hosted payload programs to occur, more acceptances of commercial standards will be required," says Simpson. Protected communications is a similar issue. "The technology exists to provide assured information and protected communications on commercial spacecraft. The issue is not technology but initial investment. Either the government would have to pay in advance, or the contractor/service provider would have to go at significant risk, since there are no current long-term lease arrangements that would justify the service providers to invest up front," he says.
Dealing with Industry
What do government agencies interested in hosted payloads need to know about commercial industry practices? "We do everything as firm, fixed price, so that’s why there are cost-savings the military can know up front. They can figure their budgets in a more cohesive way. The builder takes risk providing us a firm, fixed price bid to sell us the satellite, but ultimately the most risk and greatest investment lies with the satellite operator," says Demers.
"A hosted payload provides planners with rapid space access because commercial satellites are launched in 24-to-36-month cycles," says Brown. "That also means that government space planners need to work closely with the commercial satellite operators to ensure that they take advantage of that rapid space access."
The agency also has to communicate what it needs, when and where, and communicate to the satellite operator and manufacturer early on in the process, even if funding has not yet been secured. "In the preceding 18 months before satellite construction, each operator does a market survey, in a sense, of present customers for a replacement satellite. If it is a new orbit location it has to build a business case for that location," says Demers. This is a critical time window for communicating and firming up the government’s requirements.
Brown is still cautious. "While the advantage of commercial satellites is the speed and frequency of their launch, it also means that government space planners may not have the luxury of allowing a space mission to be delayed by years for budgetary or technical reasons." With other revenues riding on the satellite and tied to delivery schedules, a commercial operator may be unwilling to accept delays in its mission caused by delays in the government payload program without adequate compensation, or may not be able to afford any delay."
"If the government customer comes along to weigh in on every test, decision and action, we then end up with the same schedule dilemmas found on government-type programs," says Demers. "In their own space programs they are the only customer. In commercial hosted payloads they are one of many customers." Commercial satellite customers want to be confident that the government payload will be done on time.
Future Opportunities
Hosted payloads are not a panacea nor a substitute for dedicated satellites and national space systems, but "our goal is to help put extra science in the sky or communications for the warfighter. By putting these kinds of payloads on commercial satellites, the government has the chance to get important projects on orbit within a couple of years, instead of maybe waiting a decade for a new satellite opportunity to arrive," says Freidman. In the current fiscal climate, it may be more advantageous than ever for military space planners to explore their options for hosted payloads.
Dan Freyer owns AdWavez Marketing, a marketing firm serving the satellite industry. He may be reached at dan@adwavez.com.
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