Congress, Pentagon

Space acquisition still broken

The Strategic Forces Subcommittee of the House Armed Services Committee is holding a hearing this afternoon on “space system acquisitions and the industrial base”. One of the witnesses scheduled to testify, Josh Hartman, the Senior Advisor to the Undersecretary of Defense for Acquisition, Technology and Logistics, gave a preview of his planned testimony yesterday in a speech at the Responsive Space 7 conference in Los Angeles. His assessment should not be that surprising: “The current execution of major systems acquisition is going better than it was, but it requires continued improvement to serve the nation. Bluntly, though, I would suggest to you that in large part the system is still broken.”

He noted that, over the last several decades, there has been a trend towards bigger, more complex, and more expensive systems designed for a “one size fits all” approach. “The systems that we purchase have only become more complex and more unaffordable,” he said. “That model is a Cold War relic.” Today, though, changing needs means that one size doesn’t fit all. Different users have different data requirements, he noted, constellations that consist of just a few large, expensive spacecraft are particularly vulnerable.

“The solution is to change our business model,” he said, moving to multiple systems (not all of which necessarily are space-based) tailored to meet specific needs. This doesn’t mean large spacecraft won’t go away, but layered on to that would be smaller systems that can better meet certain needs better than large spacecraft. Such an approach would have a number of benefits, ranging from increasing the rate at which new technology is implemented in space systems to avoid disruptions in the space workforce by the long gaps between development of large systems.

This approach would seem to be highly compatible with Operationally Responsive Space (ORS), the central topic of this discussion at this conference, although Hartman cautioned that the ORS Office needs to deliver on that potential in the near future, such as with the upcoming launch of TacSat-3. “If you’re in the ORS Office, you need to show results.”

25 comments to Space acquisition still broken

  • Dave Huntsman

    The acquisition process for large space projects at NASA is still broken, as well.

    One additional point to be made: the existence of a true, vibrant industry to be ‘acquired from’ is also important; and more and more we don’t have that. There really is a government/industrial conference in aerospace, with the tale wagging the dog as often as not.

    One way to get around that is:
    - admit that it really exists;
    - realize that a vibrant industry only exists if new entrants can clearly come in and bring about change to both the industry, and the way government conducts business by their presence. (There isn’t a vibrant U.S. airliner manufacture industry in this country, for example; something we haven’t recognized yet, and is leading to the continued decline in U.S. aerospace, following along after the failure of the entire U.S.-owned auto industry).

    To their credit, DARPA and NASA helping to enable SpaceEx is one example of a good policy; but is the exception that proves the rule.
    So the ORS officer is right; but it’s not just smaller spacecraft – it’s changing business strategy so as to encourage new domestic entrants, which has been the opposite of U.S. policy over the years.

  • Dfens

    You pay us more to screw you than you do if we come in on budget and on time. Then you complain when we drag programs out and jack the price through the roof. Why don’t you go off and decide which one you want and let us know? If you want products that perform well and show up somewhere near on time and on budget, then put in place cost incentives for that to happen. If you want the current trends to continue, then keep paying us profit on development. That has worked out so very well.

    And by the way, the current system is not a Cold War relic. We could only hope to go back to a procurement system that was as efficient as the one we had during the Cold War. This procurement fiasco is a “peace dividend”. I know my company has been making record profits off this dividend.

  • David Davenport

    So the ORS officer is right; but it’s not just smaller spacecraft – it’s changing business strategy so as to encourage new domestic entrants, which has been the opposite of U.S. policy over the years.

    So gimme my contract now.

  • OpsGuy

    As I see it, the only way the conundrum is broken is by establishing set-aside space flight test capabilities-I mean a really serious flight test programs, where operational readiness test criteria are demonstrated…not just flight performance. And not these onesy/twosy up-front stunts that the gamblers and paying customers buy into. Until the nation invests in that we’ll have to continue settling for 1-in-20 failure performance (if lucky), high operations and support costs to hand-wring the inherent risks that never got designed and tested out, and poor payload delivery throughput.

  • David Davenport

    As I see it, the only way the conundrum is broken is by establishing set-aside space flight test capabilities-I mean a really serious flight test programs

    More flight testing means more expense, and NASA’s budget is going to get leaner, not fatter.

  • OPSGuy

    “More flight testing means more expense, and NASA’s budget is going to get leaner, not fatter.”

    Typical short-sided view that is at the heart of the problem. Look, we’re in a recovery and re-investment mode. Who says it has to be all NASA’s budget? A serious space flight testing capability needs DoD, industry, and people familiar with airworthiness certification processes and criteria…that’s not all NASA. We need to think much broader about these issues, and not the typical stovepiped rice-bowls.

  • David Davenport

    We need to think much broader about these issues, and not the typical stovepiped rice-bowls.

    Translation: We want more taxpayer money.

  • OPSGuy

    I think Dave Huntsman hit on it; we must change business strategies, but it’s going to take more time and investment than we have thus far. One business strategy not yet tried: We need businesses that have the freedom to competitively and independently purchase their equipment…and operate it for profit. We’re buying from the wrong businesses! Rather than giving money to Southwest for a ride on their equipment, we call on Boeing to give us a ride on a custom airliner. We’re buying from businesses that are motivated to make hardware, not businesses that operate their own previously purchased equipment and then sells rides. Yes, the ones we acquire from provide a ride…eventually…after the taxpayer pays for design drawings, and after they buy the autoclaves the manufacturer wants. Because of that motivation, guess why expendable launch vehicles, instead of reusable launch vehicles reign in the marketplace. The near-sighted manufacturing management doesn’t want reusables, they’re perfectly happy with throw away; the more engines and strap-ons, the better. But independent operators (like airlines) are motivated to keep assembly and test time down, keeping recurring equipment costs down, and keeping revenue from paid flights up; i.e., “responsiveness”. Government needs to quit buying hardware and start buying flights. Burt Rutan understands this; Elon Musk, if you read this month’s Aerospace America, at least understands that much of the problem. I know it’s difficult to see how to get from where we are to that point, but throw-away is a dead end. And a sunk investment in disciplined reusable system flight test is the only way to get beyond it, create truly responsive equipment, and allow these independent operators to emerge. And, despite some libertarian viewpoints on here, Wall Street ain’t likely to make that happen on its own!

  • [...] Space acquisition still broken – Space Politics [...]

  • Dfens

    Right, the real problem is that the government buys from the source instead of buying from a company that goes down to the rocket store to buy their heavy launch vehicle. Gee, why didn’t I think of that? Clearly the problem is not paying profit on development, the same amount of profit as they pay on actual on-dock hardware. The problem is the government buys direct from the builder instead of going through a middle man. That’s why when you had the new room added to your house you told the contractor you’d pay for their costs plus profit on every day they spent on the project, right? You knew that way they wouldn’t drag it out and try to take as long as possible. Of course, if it makes sense to pay a divorce lawyer that way, it must make sense to pay a building or defense contractor that way too. After all, look at what a great legal system we have since we started paying lawyers by the hour. Isn’t it great to have more money than sense!

  • Kevin Parkin

    Dfens my old friend :)

    How about an entirely reasonable ‘split the difference’ option:

    Profit is paid on original estimate only. If the project overruns, govt shares half ongoing costs with contractor.

    This way it’s in the contractor’s interest not to underbid; it’s in both sides financial interest to make the partnership work; the govt is discouraged from changing requirements and those who do will find their projects aren’t bid on; and the contractor doesn’t go out of business if they genuinely suck at cost estimating.

  • Dfens

    There are many systems, possibly even including the current one, that work in theory. Part of the complication is that you have to take into account the real world politics and motivations of the people involved. For instance, that’s why the bigger programs tend to over run the worst. They have the most political clout and therefore can generate more support to cover cost increases and schedule slides. On the other hand, as you know from experience, smaller projects are crushed under the weight of the extreme regulations placed on government contractors and often funding is sporadic.

    Proposals are the most difficult part of the procurement process to police effectively. Ever since the government started reimbursing companies for development cost this has been a problem. One of the most famous examples involved Boeing’s SST proposal where they went in pitching a swing wing airplane that they had already decided was not economically feasible. I mean, how do you, in a pratical manner, stop lying in the proposal if you’re the one footing the bills for the development? The NASA folks didn’t want to see the SST program, which they considered vital to US economic interests, to die. So instead they swallowed that bitter pill and went on with the program. Of course, this was tough on the other bidders too who went in with more practical designs that many considered better than what Boeing ultimately considered their baseline, but still lost the contract.

    The easy answer is not to buy promises or processes, but to buy products instead. There was a time, back when aerospace thrived, when you did not build a new vehicle from all new parts. You built them up using tried and tested engines, avionics, etc.

  • common sense

    There is NO way anyone is going to change a system that makes everyone decently rich (CEOs and shareholders – if you have any stock!!!!) and/or elected. And it’s not only space. I would argue that DOD is as bad, actually even worse considering the magnitude of the programs. When contractors are corporations that only claims to be private this is what you get. Most of the said contractors only live on government funds which makes them another branch of the government nothing else. They have some flexibility in hiring personel but that’s it. If there were to be any real competition that’d be an entirely different story. But who, elected officials or CEOs, will change it? WHO? Not a chance.

    If you do not believe this please allow me a parallel with the financial sector and look at where the money is going, where from, where to and who is in charge – regardless of political affiliation, since it all started under previous WH and happily goes on today.

    If you still don’t believe it, then get another margarita and enjoy life.

  • Kevin Parkin

    Like Wall Street, it’s all about incentives (on both sides). I would say I still hold out a faint hope that it will be fixed, but if it’s not in anyone’s interest to do so, then so be it. It’s not been for the years I’ve been blogging, but I still think it’s useful to throw out my guesses at the correct answer so you guys can help me avoid mistakes in the future.

    Of course, one day it may actually matter that we can turn out the best hardware the fastest, particularly in some areas, and space is one of them for now. So the question now becomes, which events will reveal the emperor has no clothes, and what is their yearly probability. It’s the sum of modest probabilities as far as I can tell.

    I do indeed enjoy a good margarita/martini and have been focusing on more important technical problems in academia. I see the way engineering in general is about to go (one part of which is the subject of a forthcoming paper), and when you work out what that means, it looks like it’ll be a wild ride! Anyway, back to writing that paper…

  • common sense

    @Kevin Parkin:

    “which events will reveal the emperor has no clothes,”

    NASA: Constellation as it stands today.

    DOD: 2 wars with no end in sight seem to me to constitute a siginificant enough event. But nobody really cares as nobody is making any real sacrifice, except those who go and their families of course. Suffice to see how we treat them when they are back. Who is making money on those 2 wars? What is the return on this investment if you allow me the provocation? And please this is not a rhetorical politically tainted question. Just asking. Other DOD programs are significantly less costly in comparison.

    Wall Street: Well we know. But if the WH is successful it’ll be back to business as usual. Just that we can’t borrow ad vitam. For a while.

    Engineering in academia/industry: It does not seem that anyone cares. Sorry. This has been going on for quite some time now. Good luck with your paper though.

  • Kevin Parkin

    “Engineering in academia/industry: It does not seem that anyone cares.”

    Nobody needs to care for academia to work except the academics and the functional elite who fund them :) Did the British public on the whole care about the work of Oxford and Cambridge from the middle ages to today? Probably not.

    Govt labs and design bureaus are a relatively new invention; let’s see how long they last.

  • Dfens

    I think government design bureaus can be quite valuable. Look at the Manhattan project or Apollo. These were Soviet Union style socialist programs. NASA and NACA have given us lots of good, public domain, basic research over the years and have enabled many new products. We need NASA to stay on the cutting edge, though and not turn it into a space launch monopoly, which is what it seems to be trying to turn itself into. They have really forgotten their mission, in my opinion.

    As for there being hope for pay-for-results procurement system, I recently read this:

    The Pentagon also plans to tie more contract fee structures to performance – Reuters

    There seems to be a quiet under current of support for a performance based acquisition system. So far industry has been able to trivialize that approach, but seriously, we have to do something. We can’t keep taking a quarter century to design every new vehicle. It’s not sustainable. We have a work force that spends their entire career on one and a half programs. At some point that ends, either of our own doing or our getting our ass kicked. Either way, it will end.

  • common sense

    @Dfens:

    NASA actually implemented COTS where the companies are being paid when they achieve certain milestones. If it were to be expended to the entire NASA+DOD business that would finally promote competition and most certainly re-size the large defense contractors which in the end MUST happen. Those contractors are bloated and require unnecessary futile programs to keep their workforce alive. Cost is beyond belief and since there are only but a few competition is nil. COTS like programs are the future if we want a vibrant competitive industry. Otherwise we’ll soon buy their products outside the US, e.g. AF tanker program.

  • Kevin Parkin

    My current view is that govt labs and design bureaus function only at a time of overriding national need. At any other time, it is very hard to get people to stress themselves for no reason. Consider: A group of students will work intensely together long into the night to solve a problem set because their professor wields almost the power of life and death over them; there are very few things in peacetime that could motivate civil servants to do the same thing, except better parking spots and more presitigous offices. It’s almost unheard of.

    I do think there is a place for the govt labs – to house shared utilities that are too big for any given university to operate. Wind tunnels and other engineering facilities should operate like shared synchrotron facilities and shared physics facilities in general. But if you took the other scientists and engineers that work at NASA and transferred them into academia, they would be 2 or 3 times more effective. Ergo, research money is much better spent with academia.

    Finally, it occured to me that when funding becomes tight in govt and industry, you tend to lose the best people first. When the same happens in academia, the departments tend to shrink back to a core of the key profs and the more talented students.

  • common sense

    @ Kevin Parkin:

    Not sure I understand your point. However about National Labs and your earlier point. Do you think it is okay to have our DOE labs be managed by the private sector? Is it morally okay to have labs designing and maintaining the US nuclear stockpile to be managed by the private sector? There are duties performed at those labs done in the National Interest that should not be left to any form of privatization or any specific elite to decide the agenda for us. National assets do not belong to any form of elite. They belong to the people of the US. It is supposed to be a democracy we live in, not a plutocracy. The fact that the public is unaware or worse does not care is a poor reflection on the status of our democracy. Sorry.

  • Kevin Parkin

    @common sense

    In the particular case of maintenance of the nuclear stockpile, I’d like to think that the individuals within that organization prioritize national security needs over working hours, parking spaces, office prestige and maladaptive working practises. If so, then it falls under the tiny category of govt scientific/engineering endeavors that are responsive to changing realities and could not be more effective if moved outside of the civil service environment.

  • common sense

    “I’d like to think that the individuals within that organization prioritize national security needs ”

    How do you know? A private corporation is beholdent to its stock holders or owners, not to the US government. I would rather “know for sure” than “like to think”. This is not about being “effective”. There is NO reason why the government MUST be effective all the time. This is a notion derived from private business practices. The government is NOT a private enterprise.

  • Dfens

    Realistically, how are you going to “competitively bid” a Saturn V or larger heavy launch vehicle? How are you going to “competitively bid” an aircraft carrier? The honest truth is, you can’t. You can’t competitively bid them because you can’t afford to let the contractor fail. If the contractor can’t fail, then you don’t have capitalism. At that point you are using fascist socialism as the model for how you do your procurement. Note, I’m not using the word “fascist” in the typical inflammatory sense. I’m using it in the cold economic sense that the government is deciding what they want built and taking all the risk, and the contractor is simply carrying out their wishes.

    The fascist economic model is an elitist model. It was born out of the European feudalist system. It is a compromise between capitalism and communism that takes the worst from both. Every day the few remaining capitalist free markets left in America demonstrate how well capitalism can work. Every day Chinese communism, especially their military, demonstrates how much better communism is than fascism.

    Fascist socialism is welfare for the rich elite. It sucks away all incentive for productivity or creativity. It creates a fairly rigid class structure that severely limits the upward mobility of the working class and places the huge burden on them of supporting both the elite and the poor. We would be much better off to go strictly to design bureaus than we are with our current fascist procurement model. Better still to go to our former capitalist system of procurement, but even back when we primarily followed that model, we still had communistic design bureaus that designed and built large warships, the atomic bomb, the Apollo rockets. What we have settled on now as the “one size fits all” answer to everything is the worst of all approaches, that of the fascist model. It simply does not work.

  • Kevin Parkin

    “There is NO reason why the government MUST be effective all the time.”

    I rest my case.

  • common sense

    @Kevin Parkin:

    I am not sure how and what case you actually rest. What was your case again?

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