Air Force initiative getting the attention of commercial satellite companies

December 1, 2013

Commercial satellite companies that have long pushed for a greater role in military operations are hoping to gain a new foothold with an Air Force competition now underway.

But traditional government contractors aren’t walking away, submitting their own proposals in hopes of holding onto business.

The Air Force is evaluating bids for what’s known as its hosted payloads initiative, meant to provide government organizations the ability to put payloads — meaning space-bound equipment such as electronics and sensors — on commercial satellites.

In a statement provided in response to questions, the Air Force said the “combination of increasing threats and decreasing budgets” led the service to pursue new ideas.

The Air Force said hosted payloads “can provide quicker and cheaper opportunities” by allowing the Air Force to avoid paying for a launch vehicle, spacecraft bus and ground infrastructure.

Commercial satellite companies, who have long pressured the government to give more consideration to commercial options, are hailing the initiative as a sign of increased openness to moving beyond government-specific programs.

“It actually is the first and best sign that the Air Force in particular — but [the Defense Department as well] — is taking steps toward real reform in [commercial satellite communications] acquisition,” said Andrew Ruszkowski of Xtar, a Herndon-based commercial satellite operator.

In the past, he said, the government has preferred to have “complete ownership and operational control.” Today, “people are thinking more creatively, and that has a lot to do with the fact that they don’t have the money that they did in the past.”

Ruszkowski argued that relying on different platforms and launches would allow the Air Force to diversify — making it more resilient should one space program run into budget or operational difficulties. Using commercial options would avoid “putting all of your eggs into one or a few baskets,” he said.

The Air Force said in its statement it did considerable market research before issuing the solicitation, including meetings with a wide range of vendors. However, the service declined to comment on the kinds of companies that submitted bids.

There are signs that government contractors see themselves as critical parts of this new work. Mark Valerio, vice president and general manager of military space systems for Bethesda-based Lockheed Martin, said Lockheed submitted a proposal, laying out how it could act as a liaison between spacecraft operators and the government.

There’s a group “of contractors that have the capability to ... do that difficult integration of that payload onto that satellite as well as design and build the system to get the data down to the ground and disseminated where it needs to go,” Valerio said.

Executives at contractors and commercial companies alike remain cautious about what the contract could bring. It is planned as a contract vehicle, meaning winning a spot will then open the door to actual task orders.

“We don’t expect the floodgates to necessarily open,” said Skot Butler of Bethesda-based satellite company Intelsat General. But “we know the opportunities are out there.”

The Air Force said it expects to announce contract winners in June.

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