US Air Force changing space acquisition plans

Thu Apr 19, 2012 5:25pm EDT

* Smaller companies could help government save costs

* New approaches needed to deal with tighter budgets

* Air Force seeking smaller, more flexible satellites

By Andrea Shalal-Esa

COLORADO SPRINGS, Colorado, April 19 (Reuters) - Top U.S. Air Force officials mapped out a new approach to buying satellites and related equipment that aims to tap the talent of smaller aerospace firms and spur big companies to get new capabilities on orbit more quickly and cheaply.

Air Force Chief of Staff General Norton Schwartz urged big U.S. aerospace companies on Thursday to stay focused on cutting costs and keeping schedules on track, but said the military should also deal more directly with smaller, more agile, companies.

Lieutenant General Ellen Pawlikowski, Commander of the Air Force's Space and Missile Systems Center, told executives that tighter budgets were forcing a new approach, especially given the military's reliance on satellites for everything from communications to targeting and weather information.

"It's time to take a step back and look at the architecture that we have," Pawlikowski told the annual Space Foundation conference. "We don't have the money that we used to have .. We've got to have flexibility. We've got to be affordable."

Schwartz said tighter budgets meant that both industry and government needed to change after years of schedule delays and billions of dollars of cost overruns on satellite systems.

"If there's one piece of advice, it's deliver on your promises," Schwartz told industry executives at the conference. The Air Force accounts for about 85 percent of the Pentagon's space budget.

The Pentagon's fiscal 2013 budget proposed cutting spending on military space programs by 22 percent, unsettling major companies in the sector such as Lockheed Martin Corp, Boeing Co, and Northrop Grumman Corp.

Lockheed's top space executive warned earlier this week that further cuts to the Pentagon budget would cut and delay space programs, although they were unlikely to be killed outright given their importance to national security.

Schwartz said the Air Force needed to take a broader view of its industrial base and develop the personnel and skills to be deal directly with second- and third-tier suppliers, cutting out the big companies as intermediaries.

He said there were some benefits to dealing with one big prime contractor, but smaller companies were often more agile in responding to changing market conditions. Working with them directly could help lower costs, he said,

"In an endeavor as technically complex as space systems ... tapping into talent wherever it might reside - from the large aerospace firms to small businesses - is especially important," Schwartz told the conference.

Schwartz said it was unclear if the Air Force had expanded its acquisition staff enough to deal directly with large numbers of small suppliers, but dealing with a broader business base would clearly be helpful.

Pawlikowski said the Air Force was exploring a range of different approaches, including greater user of smaller satellites that would be less expensive to launch into space, or making use of commercial or international satellites.

Having more satellites would also make U.S. capabilities more resilient to enemy attacks using physical or cyber weapons, she said, adding that new advanced communications and missile warning satellites would still form the cornerstone of the Air Force's presence in space.

The Air Force would be seeking to simplify follow-on purchases of the Advanced Extremely High Frequency secure communications satellites built by Lockheed and other big systems, including the ground-based system that ties the satellites together, she said.

The government is also trying to streamline oversight of programs once they are finished with development, reduce costly paperwork and adopt more fixed-price contracts.

It is also exploring combined space operations with allies, General Robert Kehler, commander of U.S. Strategic Command, told the conference.

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