Gen. William L. Shelton, the new leader of Air Force Space Command, once famously remarked USAF’s space programs had become “the poster child” for “late and expensive” US defense projects.
Shelton did not then—and does not now—think the label is justified. “It’s not fair that we get painted with the same broad brush—[as if] all space programs are over cost and well beyond schedule,” he says. “There are challenges in the acquisition community across the board. Pick a domain. Pick a platform.”
Even so, Shelton would be the last to deny that some space programs face serious problems. In a recent interview, he voiced concern about high-cost rockets and satellites, as well as cracks in the space industrial base.
It is a matter of record that significant turbulence in US space programs in the past decade or so generated cost increases and schedule delays of an often spectacular nature.
Shelton emphasizes, however, that USAF’s critics should pay attention to an often overlooked fact: The Air Force acknowledged these problems in the space enterprise years ago, and ever since has been taking steps to get on top of them.
“I think we’ve made a reasonable start,” said the general. “There has been broad recognition for the past several years that this is a problem … controlling the cost of space programs.” He argues USAF’s unheralded actions have led to improvements. “We are starting to see them pay off,” Shelton says. “No one can predict the future, [but] I would like to believe that we have turned the corner.”
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A United Launch Alliance rocket boosts the Advanced Extremely High Frequency satellite into orbit. ULA boosters have chalked up an outstanding launch record. |
Among the prominent examples supporting Shelton’s claim:
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Recent launches of the first Advanced Extremely High Frequency jam-resistant communications satellite and the first Space Based Infrared System missile-warning satellite, two spacecraft that had become notorious for cost growth, busted schedules, and disappointment.
In USAF’s drive to tame its space programs, the stakes are high. Space spending, totaling $8.8 billion, comprises 10 percent of USAF’s budget and 21 percent of its investment accounts. The Air Force provides 80 percent of total DOD space funding and 90 percent of all DOD space personnel.
The Sweet Spot
In listening to Shelton talk about space systems, one gets a strong sense that booster rockets have become Worry One.
The problem is not the actual performance of USAF’s space rockets. The boosters now provided by United Launch Alliance (a 2006 joint venture of Lockheed Martin and Boeing) have provided flawless launches for more than a decade and performed beyond all expectations.
The problem, rather, is budgetary. “I’ll just be very frank with you; we are very concerned about the cost of space launch,” says Shelton. Cost growth has been eye-watering. In a May 11 session of the Senate Armed Services Committee, Sen. Jeff Sessions (R-Ala.) pointed out that the new Fiscal 2012 budget contains $9.8 billion to build 23 new EELV boosters. A year earlier, he went on, the plan for the same period called for spending $6.4 billion on 26 boosters. “That’s three less rockets, but $3.4 billion increase in cost,” the senator said.
What is causing such cost growth
“When we first started [the EELV program], back in the 1990s, we thought we were going to have a very robust US launch program,” Shelton said. “We were going to have all of these satellites going up for commercial broadband capability, these commercial cell phones. You know, all kinds of designs.
“Those didn’t come to fruition, but Boeing and Lockheed Martin … both bought big quantities of piece parts—engines, booster components, all of those kinds of things. … As we came into buys of blocks of boosters, we [USAF] got good deals, because they had bought economic-order quantities of these components.”
For years, said Shelton, “we’ve been living off that,” but the pool of relatively cheap components is drying up. “So now, we are getting into the real world of small numbers, manufacturers that have gone out of business, in some cases obsolescent technology.”
Many second and third tier suppliers have disappeared. Those that are left have trouble finding parts. The common upper stage, the RL-10 engine, has in particular become very expensive; it is plagued by old technology and scarce components. Fabrication of small quantities of new parts carries a huge price tag.
“So, it’s a matter of, ‘What’s the best approach to drive that cost down?’ ” says Shelton.
The Air Force essentially has two cost-cutting steps.
First, USAF conducted a “should-cost” review of boosters. It has looked at all of the individual components that drive cost in the program. The SCR came up with 84 recommendations. The Air Force is pursuing each one. Plans called for completing the scrub this summer, with the expectation of sizeable savings.
Second, said Shelton, the Air Force has proposed that Congress approve large booster orders so as to capture economies of scale. The plan calls for procuring eight boosters per year—five for the Defense Department (including the Air Force) and three for the National Reconnaissance Office.
“That gives the manufacturers some reliability on what we are going to purchase,” said Shelton. “They can go out there on the contract with much more economic-order quantity buys for their components.”
This is not blue-sky dreaming—the contractors themselves have affirmed the savings. “This was the result of a very detailed study,” he says, and ULA officials were part of that study. “Eight is the sweet spot. … If you can guarantee eight per year, you can certainly work that economic aspect, and they’re not having to buy one booster at a time.”
The Air Force plan is admittedly unorthodox. Congressional approval is key.
“They have to agree with our plan here, because, if they don’t sign up to it, that’s not a lot of help to ULA,” says Shelton. “I see no pushback. … Everything we’ve heard from congressional staff and members seems very favorable.”
Shelton says the Air Force is moving toward use of another tried-and-true tool: competition. The service, for the first time in more than a decade, is seeking new launch players.
“We are actively promoting competition in the launch business,” says Shelton. “We are looking at the criteria for new entrants to come into the business.”
In this, potential launch providers face “a bit of a Catch-22,” says Shelton. “We are reluctant to put a national security payload on somebody’s booster until they’ve proven their reliability,” he notes. “Yet it is very difficult, from an investment point of view, to prove reliability.”
As a result, the Air Force has begun working with companies such as SpaceX, Orbital Sciences, and others, performing the Air Force’s “due diligence” to help them become qualified.
“It may be five years,” says Shelton, before the Air Force has satisfied itself and allows in a new player. SpaceX “will be very aggressive. They would prefer that I say, ‘Yes, in a couple of years.’ Whether or not they will pass through all of the gates … that’s the question.”
Some see SpaceX’s recently proposed Falcon 9 Heavy as a likely defense launch entrant for the near future, but Shelton is taking a wait-and-see attitude. The Falcon 9 Heavy has never flown, making it a “drawing board” rocket, he notes. “Twenty-seven engines going at the same time. Three booster cores strapped together. I mean, there’s a lot of rocket science here.”
Shelton said, “It’s kind of self-evident that we want to see success before we are willing to bet an expensive national security payload.”
The Air Force is proceeding slowly, mindful that, in today’s relatively small launch market, new competitors could weaken the current provider, ULA. “We’ve talked a lot about kind of the Hippocratic Oath on this: ‘First, do no harm,’ ” said Shelton. “But, at the same time, we’re not crazy about a monopoly.”
When it comes to development and production of modern satellites the problems are much the same, though their scope and magnitude have declined somewhat.
This modest improvement is no accident, in Shelton’s view, but rather the result of get-well efforts launched in the wake of billion-dollar overruns and years-long delays in the fielding of satellites.
“I think that there was recognition several years ago that we needed to get, quote unquote, back to basics,” says Shelton. “And we’ve done that. We’ve gone after a much more incremental approach to developing new space capabilities.”
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Gen. William Shelton, chief of AFSPC, believes USAF has “turned a corner” in controlling costs in space programs. (USAF photo by Duncan Wood) |
Still, Worries
In addition, Air Force Space Command officials took a new approach to adherence to stable operational requirements. “We’ve told ourselves that we will hold the line on requirements, that we won’t allow incremental requirements growth to eat us alive and produce all of these engineering change proposals from contracts, [which] are very costly.”
A prime example of lower-risk approach is the operational arrival of the new Wideband Global SATCOM system. The still-incomplete but expanding WGS constellation provides high-capacity military communications to forces around the world. Each WGS satellite delivers 10 times the capacity of each “ball” in the old Defense Satellite Communications System, which it will eventually replace. Three have been placed in orbit, and another five are in various stages of actual or planned production.
Also successful are the two SBIRS payloads placed in highly elliptical orbit aboard classified spacecraft. The general says Space Command has had “wonderful success” with those two sensors, which for several years have been gathering and dispatching valuable infrared data.
Then there is GPS III. This new satellite has been engineered to deliver better jam resistance, more power, a civil signal compatible with Europe’s Galileo GPS-like system, and sharper accuracies. “As we look at GPS III,” says Shelton, “we think that is going to be very production-oriented, unlike most satellites. … The acquisition of that capability thus far has been very good.”
Unfortunately, the same confidence does not hold for all Space Command satellite projects. One that continues to concern Shelton is the geosynchronous-orbit portion of SBIRS. In May, the Air Force successfully launched and raised to final orbit the first of these spacecraft, SBIRS GEO-1. That was an achievement, but no one is ready to declare victory.
“SBIRS I will continue to worry about,” says Shelton, noting its troubled developmental past. “There’s no reason to believe it won’t perform as advertised, but I’m from Missouri. There’s a long check-out period, and we’ll make sure that satellite is the way it’s supposed to be. That’s just going to take some time.”
Similar concerns extend to the AEHF system, which is to replace the Milstar secure communication constellation. The AEHF program began more than a decade ago; its first ball was launched last August, four years behind schedule. Even then, an onboard rocket malfunction prevented a swift rise to geosynchronous orbit. It won’t reach geosynchronous orbit until some time this fall, said Shelton, “so the jury is still out on Advanced EHF.”
The GPS IIF also suffered an early glitch. The first satellite, launched last year, encountered interference problems as a result of the transmitter construction and antenna patterns, said Shelton. With the second satellite set for launch this summer, technicians worked to fix the system. “We think we’ve got it solved for the second one,” said Shelton.
The Air Force’s new Defense Weather Satellite System, or DWSS, “is still a work in progress,” he said. “We hope to launch that in 2018, but we’ve got a lot of work to do to bring that capability together. … We think we’re going to make it, but it’s going to be fairly tight, according to the timeline and the funding profile.”
Shelton expresses a guarded optimism that several new acquisition approaches will help reduce cost and schedule woes. One is called Evolutionary Acquisition for Space Efficiency. EASE is based upon four principles: block buys, stable research and development investment, fixed-price contracting, and full funding through advance appropriations.
EASE will soon get a road test. Air Force Space Command has proposed block buys this year of the fifth and sixth satellites of the AEHF systems. It plans to do the same next year with the fifth and sixth models of the SBIRS GEO constellation.
“We fully intend to get fixed-price contracts on those and buy those two satellites in blocks, if the Congress gives us authority to do incremental funding on those.”
In Shelton’s view, fixed-price contracts are proper for satellite programs that have moved beyond development, as is the case with both AEHF and SBIRS. Congress seems to agree, but lawmakers had a different view about providing advanced funding to be spread over many years, as the Air Force requested.
“The original EASE concept has been modified,” he said. “Congress was not comfortable with advance appropriations, which is where we were initially, but it looks like incremental funding will be there.”
Better Contracts
By “incremental funding,” Shelton means that Congress would approve a plan for the full amount, but would vote each year on the next increment of funding, a procedure Shelton said “would be adequate to the task.”
EASE is not the only contracting step in the works. Shelton maintains that the Air Force needs to generally tighten up on its contracts with space contractors.
“We’ve just started to look at the kinds of contracts that we are going to write, with our providers, to get much more into a fixed-price sort of arrangement, instead of what has been, in the past, much more of a cost-sharing type of arrangement, in developing capability.”
With all of the emphasis on cost containment and adherence to schedule, some worry that USAF space systems of the future may be pretty vanilla in nature. Shelton doesn’t buy that argument.
“They will still be world-beating capabilities. It’s all about how you bring capabilities together onto a particular satellite. You don’t need to chase the state of the art.”