The Space Foundation issued a white paper Tuesday on the health of the nation’s space industrial base, with a particular focus on “sub-prime contractors”, those companies that perform work for the big aerospace companies. While recent studies have shown that the aerospace industry in general is in good shape, the Space Foundation paper notes that the situation is different for these suppliers, which tend to perform less profitable work and suffer from stagnant markets and export control restrictions. As the report states, “…because the market and margins are so small, the skills so specialized and the barriers to entry high, the base of these suppliers is small and dwindling. If these subcontractors cannot adjust to the current supply chain or survive market shocks, there is a danger that many may disappear.”
The report has a number of policy recommendations for both the DOD and Congress. These include a comprehensive review of the space industrial base at the sub-prime level by the Air Force as well as a “management plan” for that base. (The report concludes that because this industrial base is critical to national security “it must be maintained regardless of free market dynamics.”) The report also recommends changes in the export control system to make it easier for US suppliers to sell their goods overseas, or, lacking such changes, efforts by the DOD to help companies get export control licenses.
The phrase “regardless of free market dynamics” is a scary one indeed. “National security” needs as an excuse to subsidize Big Aerospace has probably done far more to hurt the American space effort than help it. I’m fairly certain it has caused Boeing and Lockheed Martin to do business as usual operations for far too long. This “regardless of free market dynamics” philosophy is the reason we have Maj Gen Hamel defending the Unholy Launch Alliance in the current Space News, and NASA keeping CEV contracts close to the chest.
Hundreds of millions for spacelift to Boeing and Lockheed per shot. The same amount of money channeled to the startup space companies could yield real results. SpaceX lost a vehicle, that’s true. One thing that Mr Day and Mr Hill didn’t really address in their fine articles, however, was that many rockets that worked on their first flight (shuttle, Saturn V, etc..) were also staffed by an army of engineers that had 10x or more the people combing every facet of the design. Although it might make a higher success rate, losing a rocket or two to work out the bugs will likely be far more cost effective than over-engineering the vehicle.
Why won’t the military embrace the free market rather than fight it at every turn? AFRL and DARPA can only do so much..
For the record, I am all in favor of combing the design for flaws as much as possible for man-rated vehicles. My point was intended for small spacelift, like the Falcon 1. I’m sure alot of students helped build the falconsat satellite. I doubt they’re losing a whole lot of sleep about losing it.
Free-market dynamics? From a recent Aviation Week retrospective on the development of the B-2:
“‘We kept a top-10 list of [B-2 concerns] on the briefing-room wall,’ [Northrop VP Alfred] Myers recalls. ‘We were seven years into the program before cost made that list.'”
I like that “regardless of free market dynamics”. Can I have that deal?