The Pentagon, headquarters for the U.S. Department of Defense. Photo: DoD.

The U.S. Space Force is moving to shift a traditional 50-50 cost-plus versus fixed-price development contract split even more toward the use of fixed-price contracts with low non-recurring engineering costs and two to three year development cycles, a top service official said on Tuesday.

“If fits in the modality of getting us into a good space of good acquisition principles — short, sweet, quick, rapid, and delivery of that capability,” Space Force Maj. Gen. Stephen Purdy, acting assistant secretary of the Air Force for space acquisition and integration, told a National Security Space Association (NSSA) conference in Reston, Virginia. on Tuesday. “If anything, think of us continuing those efforts, but doing it more aggressively,” he said.

The White House has yet to announce a nominee to replace the Biden administration’s space acquisition executive, Frank Calvelli, and Purdy has stepped into the role.

In a discussion with reporters after his address at NSSA, Purdy said that Calvelli had moved to the use of more fixed price contracts but “left a few as cost-plus, and I’m re-looking at some of those, not because he made the wrong choice but because life has changed and the situation has changed.”

“There’s not too many cost-plus programs left,” he said. “There are some big ones that are in the cost-plus realm that we never did switch out. Everything is screaming, ‘We need to get faster. We need to make sure that we get commercial, that we don’t get locked in.’ That’s what I’m asking, to step into each one of those and talk to the requirements side to figure out if there’s some kind of requirements that’s driving it and see if there’s something we can do. Sometimes, the requirement is such that, if you need a post-nuclear exchange communication — there’s a lot of requirements like RAD-hardened; etc. there’s not a lot of commercial for that. That’s a straight up military domain. That’s fine. We understand that, but I want to be able to explain it to any senior leader coming along, that we’re going down a cost-plus [path] and here’s the reason why we couldn’t go down a commercial [path because of military-specific requirements] or because we couldn’t break it apart and get commercial sub-pieces. I want to double down and make sure we’ve done all the rigor that we can. ”

Before the NSSA audience, Purdy also brought up Calvelli’s stress on accountability.

“Accountability is a two-way street,” Purdy said. “As of May 2022 to today, we’re at about 14 major acquisition programs that have had contracts or entire programs restructured or cancelled. Why? Typically, due to performance. Costs have skyrocketed. We aren’t getting the capability we need. Unlike the Space Force acquisition of old, we’ve stopped just piling money into that. We’ve stopped these contracts and re-competed them, for the most part, across the board. This includes unclassified and classified activity.”

“We’re also looking at taking action against poor performing U.S. government program managers — first to give them help and provide guidance and additional acquisition help, and then, if it’s not making it, get rid of the roles,” he said.

The Space Force acquisition executive oversees a more than $24 billion research and development portfolio. The latter includes 59 unclassified major acquisition programs — 38 traditional Major Capability Acquisitions, 12 Middle Tier Authority, 8 software pathways, and one Quick Start — the Resilient Global Positioning System (R-GPS) by Space Force’s Space Systems Command (SSC) to launch up to eight R-GPS satellites by 2028.

Astranis, Axient, L3Harris Technologies and Sierra Space have been working on the R-GPS concept design phase.

Troy Meink, the principal deputy director of the National Reconnaissance Office who spurred acceleration of the use of fixed price contracts at the agency, is Pres. Trump’s pick to become Air Force secretary.

“We’re really looking to explore risk exposure on our programs,” Purdy said on Tuesday. “There are a couple of programs that we have that I would declare are nearly unbounded risk exposure — they’re sitting in a cost-plus environment, there’s really difficult technology, and, basically, this is like future Nunn-McCurdys.”

“We’re gonna look hard at figuring how to get out of that,” he said. “That’s gonna be painful on all sides. We’re gonna have discussions like how do we convert this to fixed price? How do we start breaking this apart. I wanna give a fair warning to industry out there because we’ve already given it to our program managers, and I’ve already started diving on a couple of key programs that are in that shape. That’s a multi [step] evaluation process. We’ve got to look at the requirements. A lot of times that’s one of our key problems.”

This story was first published by Defense Daily