Loren Thompson - Pentagon Wants To Subsidize A Foreign-Owned Company To Service U.S. Spy Satellites

When new presidents take office, there are always some folks in the federal bureaucracy who don't get the message priorities have changed. That's the only way you can explain a plan by the Defense Advanced Research Projects Agency (DARPA) to subsidize a foreign-owned company so it can compete with U.S. providers to service U.S. spy satellites in orbit.

Boeing's Wideband Global Satcom is one type of geosynchronous satellite that might benefit from being serviced in orbit. It is the highest-capacity communications satellite the military operates, and critical to operations around the world. (U.S. Air Force Space Command photo illustration/modified)

Boeing's Wideband Global Satcom is one type of geosynchronous satellite that might benefit from being serviced in orbit. It is the highest-capacity communications satellite the military operates, and critical to operations around the world. (U.S. Air Force Space Command photo illustration/modified)

But when the research agency goes up to Capitol Hill to explain its plan, it insists on meeting in a facility for handling "sensitive compartmented information." That wouldn't be necessary if it was just talking about servicing communications satellites. Part of what it wants from its robot spacecraft is the ability to inspect, repair, modify and move geosynchronous spy satellites that are extremely expensive to replace.

There's nothing wrong in principle with the idea. It could save the Pentagon -- which hides most U.S. intelligence spending in its budget -- a great deal of money.  However, because the program originated in the Obama years, there are a number of ways in which it is not likely to sit well with the Trump Administration.

For starters, DARPA has decided to award the program to SSL, the California subsidiary of Canadian company MacDonald Dettwiler Associates, which means a foreign-owned entity would be engaged in supporting some of the intelligence community's most sensitive assets. Gaining access to these assets and the information they collect requires special clearances that a foreign-owned company would typically have great difficulty obtaining. Granting the clearances could only be justified if no suitable domestic provider of the same services existed.

Which brings me to the second problem. Not only is the U.S. company Orbital ATK already developing a similar capability that will be available sooner, but it is doing so with its own money rather than using federal funds. In other words, DARPA wants to use taxpayer money to set up a foreign-owned competitor to a solution that was already emerging spontaneously from the marketplace at no cost to the government.

Orbital ATK already had a contract with commercial-satellite operator Intelsat to service geosynchronous satellites in orbit before DARPA issued its initial solicitation for the program. So DARPA is wasting hundreds of millions of dollars in taxpayer money to help a foreign-owned company get into the business of supporting sensitive intelligence systems.

Needless to say, DARPA has a different take on its plan. It says about 80% of geosynchronous satellites are operated by commercial companies rather than governments, and the capability it wants to develop would be able to support both types of spacecraft. But that raises a third problem -- under current national space policy, the government isn't supposed to be undercutting commercial companies or distorting commercial markets. In this case, DARPA is doing both.

What the research agency proposes to do is pay nearly 90% of the cost for developing and launching the robotic servicing system, and then simply turn it over to the Canadian company (and any other qualified company that is interested) along with related intellectual property. The company would then be free not only to offer its services to the government, but also to compete in the marketplace against Orbital ATK or any other provider for contracts from commercial satellite operators.

That wouldn't just distort market forces, it would destroy them. How could any purely commercial provider hope to compete against an entrant who had been so heavily subsidized by the federal government? Orbital ATK is so incensed that it has filed suit against DARPA's acting director, claiming that the research agency's plan is an illegal violation of government policy.

The company certainly seems to have a case, unless you believe all that talk in the 2010 national space policy about supporting commercial solutions to space challenges was just empty rhetoric. Even if it was, though, there is a new president in the White House who is serious about buying American and hiring American in a world where government stops interfering with the functioning of the market.

Pentagon officials are now reviewing DARPA's proposed award of a contract to the foreign company. It doesn't take much imagination to figure out what President Trump will think of the agency's plan when he hears about it.