In contrast to tanks, ships, and planes, a disproportionate share of the life-cycle cost in space acquisition is in the research and development phase. Indeed, upfront development cost typically is 20-40 percent of space programs’ life cycle cost compared to other ACAT 1 programs that are often 10 percent or less. Moreover, space systems historically have been bought in limited quantities, 3-4 year production breaks are common, and orders tend to be spaced erratically.
The Cold War was of course the initial catalyst for the investment, invention, and innovation required to create defense and intelligence space capabilities. Confronted by the Soviet threat, the U.S. government gave the national reconnaissance and defense space programs the highest resource priority and was very tolerant of the risks involved in development. Indeed, the original Corona imagery intelligence satellite program was sustained through numerous initial failures.
Program managers were able to obligate substantial funds at an early stage of the program to purchase the materials for a robust development and test program, thereby allowing multiple flight tests per year, even in the face of repeated failures. As the national security space program matured and policymakers, commanders, warfighters, and intelligence analysts became increasingly reliant or dependent upon space assets over the following decades, however, the federal government became considerably less risk tolerant.
That was from the National Security Space Association’s report, “Acquiring Space Capabilities with Agility and Discipline at the Speed of Relevance.” HT: Pete M. Read the whole thing, it’s pretty short, with a total of 16 recommendations.
Note that the Space Force also announced its new organization. There will be three primary commands: Space Operations Command (SpOC) for supporting the combatant commanders; Space Systems Command (SSC) for acquisition space systems; and Space Training and Readiness Command (STARCOM) for training personnel. Underneath the commands will be “Deltas” led by the rank of an O-6 (colonel).
Back to the National Security Space Association’s recommendations:
The Corona program started in 1956 and was accelerated in 1960, before Robert McNamara’s sweeping reforms which would have made such risk-tolerant development impossible. I was surprised that the budget section of the NSSA’s report didn’t mention budget line item consolidation into capability portfolios, which was the Space Force’s top priority and turns back the clock on McNamara’s ill-conceived reforms. Instead, the only budget matter they focused on was removing full-funding requirements for satellite procurement:
… budget flexibility is constrained by “full funding” financial rules requiring the entire cost of a satellite to be budgeted in the year in which it is ordered, even though production typically takes 5-8 years. This impedes funding production satellites given that a single vehicle’s cost can consume 20 percent or more of the entire space procurement budget.
Of course, Navy aircraft carriers are the only exception to that rule for procurement. A single carrier would approach half of the Navy’s total shipbuilding procurement account. And I think it’s generally a good idea to have a similar waiver for satellites. But as the NSSA stated earlier, procurement isn’t exactly a biggest deal for space systems. Procurement is less than $2.5 billion in the FY21 request compared to $10.3 billion for RDT&E. A bigger impact would be connecting space RDT&E to real portfolios that allow for agile development processes.
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