Remarks to the Space Enterprise Council
Thank you for the opportunity to be here today.
Unlike some of you, I do not spend a lot of my time on space.
I am a defense generalist, which means that one day I may be writing about undersea warfare, the next day about overseas arms sales, and the day after that about cyber security.
But space has a special appeal for me, because I came of age in the 1960s on a steady diet of Star Trek and science fiction writers like Robert Heinlein.
Back then, it was an article of faith among space enthusiasts that America would soon have a colony on Mars, and that over the long run mankind’s destiny lay in the distant stars.
For anyone who harbored such expectations, the intervening years have been filled with frustration.
This year marks the 40th anniversary of the last moonwalk, and instead of getting ready to go to Mars, we may be witnessing the final demise of the human spaceflight program.
The Space Shuttle is retired, NASA is in disarray, and the federal government is out of money.
The dreams of the generations that followed my own into adulthood shifted from the cosmos to the microcosm, so that space occupies a smaller place in popular culture now than at any time since I was born in 1951.
It wasn’t lack of imagination that did in my generation’s dreams about a future in space so much as it was the sheer physics of the proposition.
Few of us grasped that it would take 40,000 years for light to travel from our outpost on the edge of the galaxy to its center, or what would happen to anyone who sought to travel at that speed.
We were too romantic back then to grasp our limitations, and so we really believed a young president when he told us we could land Americans on the moon within a decade and return them safely to earth.
Today, we are realistic and world-weary in all the worst ways, so that we can’t take a manned mission to Mars seriously any more — even though it may be technologically less challenging for us than a mission to the Moon was in the Kennedy era.
I find that all very sad, not just because Mars is the only other place in the known universe that could plausibly host a self-sustaining colony of human beings, but also because the fossil record is so clear about what eventually will happen to us if we don’t find a second home beyond the Earth.
Fortunately for you though, I have not come here today to elaborate on my funereal assessment of the human spaceflight program, nor to speculate about what will become of NASA when the last astronaut retires.
Instead, I’d like to talk about a part of the space business where things seem to be improving after a period of decay.
I’m talking about national-security space, the part of the business where military and intelligence missions are accomplished.
Being a defense type, I have a better grasp of national-security space than I do of civil or commercial space — and what I know tells me that the key players in that segment of the market are going to do better in the years ahead than most analysts suspect.
I felt that way even before the President and Secretary Panetta last week highlighted the importance of space capabilities in the nation’s future defense posture.
So what I’d like to do over the next 15 minutes or so is discuss past, present and future prospects in national-security space, focusing on three questions:
— What went wrong during the Bush years?
— How has the government responded to the setbacks?
— And what does it mean for the future of key contractors in the sector?
I will conclude that the outlook for key players is better than at any time since the Cold War ended, and explain why now is a good time to be in the national-security segment of the space business.
What Went Wrong?
But let’s begin by going back a dozen years to the final days of the American Century, when George W. Bush was elected president with one of the thinnest national-security resumes in modern times.
Even Republicans were uneasy about the new president’s lack of experience in defense and foreign affairs, and so they sought to surround him with senior statesmen whose national-security credentials were beyond reproach.
It was that impulse that brought Donald Rumsfeld back to the Pentagon after a quarter-century absence from Washington — as chance would have it, just as Rumsfeld was wrapping up his role as chairman of a presidential commission looking into the management of national-security space.
Rumsfeld was pretty rusty on most aspects of military policy, but space was one area where he felt well-informed, so he was predisposed to make orbital systems a central part of the Bush Administration’s plan to transform the joint force for information-age warfare.
His affinity for space systems was reinforced by the fact that he had also recently participated in a panel on missile defense, and the dot.com boom was highlighting the role of commercial satcoms in networking the world.
What Rumsfeld didn’t fully grasp, though, was how the Clinton Administration’s efforts to reap a peace dividend had gradually degraded the national-security space community, to a point where it lacked the intellectual and material resources needed to support his transformation goals.
The report his commission issued in January of 2001 recommended a raft of organizational changes to clarify federal oversight of space activities, but its assessment reflected little awareness of how far gone the sector was in terms of talent and capabilities.
At the time, Lockheed Martin dominated the satellite segment of the business, because it had combined the operations of Lockheed, Martin Marietta and GE Aerospace to fashion an enterprise with a 75 percent share of the national-security spacecraft market.
Boeing had recently secured a huge contract to build the next generation of imaging spy satellites, but even with the assets of the recently acquired Hughes satellite business, it controlled less than ten percent of the market for national-security spacecraft.
Northrop Grumman claimed almost all the rest, mainly as a result of its work on missile-warning and signals-intelligence satellites.
Rumsfeld and his fellow commissioners failed to appreciate that each of these companies had secured contracts for next-generation satellite constellations by submitting lowball bids on programs of unprecedented complexity, in the process unseating seasoned incumbents with much greater understanding of the technical challenges which lay ahead.
For instance, Boeing had made off with Lockheed Martin’s forty-year franchise in imagery satellites, and Lockheed Martin in turn had deprived Northrop Grumman’s legacy TRW operation of its similarly long-running franchise in missile-warning satellites.
Because the government seldom awarded next-generation satellite contracts to incumbents during the Clinton years, there was a huge gap between its price and performance expectations for future satellites and the ability of successful bidders to execute the contracts they had won.
One reason Rumsfeld and company didn’t see this was that the Clinton Administration had eliminated much of the in-house technical talent at places like NRO and the Air Force’s Space and Missile Systems Center, so few acquisition personnel grasped just how unrealistic the government’s plans were.
Rumsfeld actually made the problem worse once he was at the Pentagon by allowing subordinates to impose a whole new layer of complexity on already over-extended contractors in the name of military transformation.
For instance, the Transformational Communications Satellite program known as TSAT sought to leapfrog past the next generation of secure communications satellites to develop a system that was a hundred times more capable than the latest Milstar satellites, even though contractors were struggling to develop one that was ten times more capable.
And Space Radar, the other big transformation initiative in space, proposed to develop a complicated “system of systems” that could revolutionize the tracking of moving ground targets while satisfying the diverse collection needs of military commanders and intelligence analysts.
Given what I have already said about the unrealistic goals for TSAT and Space Radar, you can just imagine what kinds of performance requirements the new administration wanted to levy on next-generation spy satellites, especially after 9-11 shifted the focus to elusive, non-traditional targets.
Well, you know what happened next.
One by one, all of the next-generation satellite programs began drifting over budget and falling behind schedule as developers ran into unforeseen technical challenges.
Several of the most important programs ended up being canceled, including the Future Imagery Architecture, Space Radar, TSAT, and a new weather satellite.
And the programs that survived, such as the Space Based Infrared System, Advanced EHF communications satellite, and GPS IIF were delivered years later than planned.
This meltdown in sector performance spawned a series of near-crises as warfighters and intelligence analysts faced the prospect of gaps in missile-warning capability, imagery collection, and GPS signal integrity.
The worst such problem arose when the final Defense Support Program satellite, DSP-23, failed in orbit during 2008 while successor satellites were being delayed by software concerns arising out of the earlier failure of a spy satellite.
It is no exaggeration to say that if legacy missile-warning satellites had not continued operating years beyond their expected design lives, the nation’s nuclear posture might have been severely compromised.
Long before these problems arose, though, a Defense Science Board task force had explained why the Bush Administration’s plans for national-security space were doomed to failure.
In May of 2003, the task force issued a report detailing mis-steps made during the Clinton years, and what they meant for the performance of the sector in the years ahead.
Among other things, the task force found that the Clinton Administration had…
— Imposed unrealistic performance requirements on developers.
— Dismantled the government’s ability to effectively manage contractors.
— Allowed cost concerns to eclipse other facets of program management.
— Competed new contracts in a manner that favored less qualified bidders.
— And assumed levels of commercial space demand that never materialized.
The science board noted that these errors occurred against a backdrop of industry consolidation and growing dependence on space systems to accomplish a wide array of missions.
In other words, the government had scaled back its funding and expertise for national-security space at precisely the same time that it was preparing to rely more heavily on space systems in its future defense posture.
It sought to reconcile these divergent trends by making increasingly optimistic assumptions that raised the level of risk associated with next-generation spacecraft programs.
Interestingly enough, the task force did not find systemic problems in the space industry itself; rather, it described shortfalls in industry performance as a consequence of government incompetence.
Other studies came to similar conclusions, and so the Bush Administration was forced to craft a rescue plan for its faltering space efforts.
How The Government Responded
In retrospect, the government’s response to the crisis in national-security space resembled the triage concept applied in combat by military doctors….
— Some spacecraft programs were in good enough shape that they could be stabilized by changing management practices.
— Others needed immediate surgery in order to be saved.
— And still others were just too far gone to survive.
The best-known casualty of this process was Boeing’s Future Imagery Architecture, which the company had won in 1999 by promising to greatly exceed the performance of longtime incumbent Lockheed Martin.
FIA, as it was called, was supposed to replace both the optical and radar imaging satellites in Cold War spy constellations with a system of systems offering faster revisit rates, lower spacecraft launch weights, and a host of other advances.
In typical fashion for programs awarded during this period, the ground segment was progressing fine but the spacecraft segment was faltering badly, mainly because a contractor with little relevant experience had made overly optimistic assumptions about price, schedule and technical performance.
Faced with a looming shortfall in imagery collections, the National Reconnaissance Office awarded Lockheed a contract in 2005 to build two gap-filler optical imaging satellites, and then terminated Boeing’s role in constructing next-generation satellites utilizing similar technology.
Boeing was allowed to continue building radar-imaging satellites that can see through clouds but offer considerably less resolution, however the “better-faster-cheaper” imagery architecture that the Clinton Administration had conceived a decade earlier was effectively scrapped.
Lockheed Martin forecast two years ago in public disclosures that it would probably win a contract in fiscal 2012 for the restructured next-generation overhead imagery architecture, and that is indeed what has now happened.
The government’s willingness to restore Lockheed’s long-running imagery franchise was no doubt bolstered by the responsiveness that the company showed in producing the gap-filler satellites, the first of which was delivered two years earlier than expected for $2 billion less than planned.
The quick turnaround averted a potential nine-month gap in the collection of high-resolution satellite imagery, and no doubt reinforced policymaker perceptions that Lockheed Martin was uniquely qualified to integrate next-generation imagery spacecraft.
Judging from recent developments in the signals intelligence part of the spy network, it has come to much the same conclusion about the need to keep Northrop Grumman’s Space Park in the lead on eavesdropping satellites.
Once the Bush Administration grasped how over-stressed national security space was, there was widespread sentiment among policymakers to kill two other big reconnaissance programs — Space Radar and the Space Based Infrared System (widely known as “Sbirs”).
The Air Force and OSD had gotten into quite a dust-up over whether future tracking of moving ground targets should be accomplished from space or the air, and that disagreement contributed to cancellation of the Air Force’s preferred solution, a next-generation radar plane designated the E-10.
But loss of the airborne solution did not secure the support of Air Force programmers for an orbital alternative, so when warfighters and intelligence analysts failed to resolve differences over how Space Radar should reconcile their divergent requirements, the military service was happy to offer up the program as a bill-payer for more pressing needs.
The public story is that the program was finally canceled in 2007, although I suspect that a descoped effort continues in the black world today.
Looking back now, it seems obvious that Space Radar was a bridge too far in terms of technical challenges and budgetary burdens, so if it hadn’t been canceled during the Bush years it almost certainly would have bitten the dust under Obama.
SBIRS, on the other hand, ended up with a very different fate, even though the 2003 Defense Science Board task force had described it as “a case study of how not to execute a space program.”
The basic problem with the next-generation missile-warning system was that the Clinton Administration had burdened it with 18 key performance parameters — four times the desirable maximum, according to the task force — and then awarded it to a non-incumbent contractor who bid aggressively to win.
That contractor was Lockheed Martin, which bid only half of the government’s already optimistic cost estimate, and then found itself with the daunting task of integrating spacecraft that must not only detect enemy missile launches, but also satisfy the diverse infrared-detection needs of warfighters, intelligence analysts, and the missile-defense community.
Lockheed did an impressive job of developing the ground segment, so much so that it materially aided the success of U.S. military forces in Iraq by generating timely tactical intelligence from legacy Defense Support Program satellites.
But the SBIRS satellites were another story, suffering from all the management defects described in the DSB report: excessive requirements, funding instability, high staff turnover, weak government oversight, etc.
By the time FIA was killed, the Air Force was seriously considering the same fate for SBIRS too — but then it discovered it didn’t have enough time to develop an alternative before legacy missile-warning satellites would begin failing at an unacceptable rate.
Some of those satellites were already in so-called “single-string” status when SBIRS encountered software problems during the second Bush Administration, so as I said earlier, the failure in orbit of the newest Defense Support Program spacecraft in 2008 created a crisis.
The Air Force had little choice but to press on with the program, and to Lockheed Martin’s credit it finally made the system work without abandoning any of the original performance requirements.
It may not be the latest technology given all the delays, but SBIRS now is proving its worth in both geosynchronous and elliptical polar orbits, assuring that there will be no shortfall in the nation’s future capacity to detect hostile missile launches.
Another troubled Lockheed program, the Advanced EHF successor to Milstar secure communications satellites, has also worked through technical challenges, and will presumably be a crucial communications node for decades to come given the Obama Administration’s termination of TSAT.
The Bush Administration could never quite bring itself to kill TSAT despite weak congressional support and big technical hurdles, because the notion of global, internet-like connectivity for all warfighters was so central to its transformation vision.
But the Obama Administration wasn’t party to that vision, so it had no problem when the Air Force offered up TSAT as a bill-payer in the 2010 budget build, and now plans to use a combination of evolved AEHF and Wideband Global System satellites for future military communications.
The latter satellites, based on a Boeing commercial satcom design, are turning out to be one of the few major military successes in spacecraft development of the Bush years.
Setting aside programmatic specifics, what were the basic principles that the Bush Administration embraced in trying to get national-security space back on track?
I think the Bush changes came down to five broad points…
— First, improve the government’s capacity to assess and manage the performance of contractors by rebuilding organic expertise.
— Second, be rigorous and realistic about limiting the number of performance requirements expected from new spacecraft.
— Third, stabilize funding for programs so that managers can plan budgets and schedules without fear of frequent restructures.
— Fourth, lengthen the tenures of government program managers and give them the authority needed to enforce standards.
— And five, don’t accept excessive risk as a way of making overly ambitious plans fit within current budget constraints.
Obviously, sound principles and honest estimates aren’t going to make much difference unless competent people are put in management jobs and organizational arrangements support effective oversight.
But despite the distraction of two recessions and two wars, the Bush Administration did manage to turn around the national-security space program, leaving it in far better shape than it was when Rumsfeld and his subordinates inherited it in 2001.
To take a few examples of how things have improved…
— After a decade of mis-steps and meltdowns, every single spacecraft program NRO manages is now on budget and on schedule.
— The spy agency has successfully completed its most intensive period of launch activity in 20 years, including orbiting the biggest satellite ever constructed.
— Wideband Global and AEHF satcoms are exhibiting exceptional performance, bolstering prospects that they can be evolved to meet future connectivity needs.
— And the next-generation GPS III satellite is halfway through its development cycle having consumed only three of the 220 days in safety margin set aside to mitigate risk.
Although all of these improvements have occurred under President Obama, they were made possible by the program adjustments and management changes of the Bush years.
That brings me to my final topic, which I will address briefly: why the outlook for national-security space in the current decade is more encouraging than many observers realize.
What It Means For The Future
You could easily conclude from the litany of problems I have described that national-security space faces a difficult future.
With threats receding and defense budgets growing tighter, the business seems destined for a decaying orbit in the decade ahead not unlike what happened during the Clinton years.
However, I actually think the future looks pretty bright for a variety on reasons.
First, policymakers understand how dependent the joint force and the intelligence community have become on orbital systems.
President Obama and the Pentagon’s top managers emphasized the importance of space last week in rolling out the administration’s new Pacific-centric strategy.
It’s not just that the vast distances in the Pacific favor heavier reliance on space for communications and reconnaissance, but also that the U.S. will need to depend more on overhead assets to monitor developments in regions where it is drawing down — such as the Persian Gulf.
Second, business practices in the sector have improved markedly over the last several years.
Most major spacecraft programs now rest on a sound financial and technical foundation, while the government customer is moving to stabilize the launch segment with smarter purchasing policies.
The quality of management at the leading contractors is also about as good as it has ever been, with executives like Joanne Maguire and Craig Cooning running tight ships.
Third, the pace of overseas economic and technological progress suggests the federal government will need to keep investing in new orbital systems so America can maintain its edge in space.
As the spectrum of missions expands and the ranks of adversaries grow more diverse, AEHF, WGS, SBIRS and other programs will need to be continuously evolved to keep up with national-security needs.
Meanwhile, the need for next-generation navigation and reconnaissance constellations looks all too clear in light of recent foreign developments.
Fourth, threats to the security of U.S. space capabilities that the Rumsfeld panel predicted a dozen years ago have begun to materialize.
China has tested an anti-satellite weapon, cyber actors are attacking ground networks on a daily basis, and a series of unexplained anomalies in spacecraft performance raise questions about what America’s adversaries may be doing to degrade overhead capabilities.
That implies that the military will need to invest a good deal of money on improving its ability to monitor developments in space, fielding active and passive defenses of spacecraft, and enhancing the security of space-related networks.
Finally, there is the matter with which I started — the waning of NASA’s human spaceflight effort, and the broader decline that the civil space program faces as program costs rise and the space agency retreats into high-risk fantasies about how to secure future launch services.
As NASA’s decline continues, the national-security space program will have to take on greater responsibility for sustaining launch capabilities and other technical competencies, leading to budget gains and employment increases not currently in administration plans.
So things are looking up in national-security space, especially when compared with how civil space is faring under the current administration.