Government and New Space: Pursuing Faster Teamwork For a Robust Future

When SpaceX first championed private launch vehicles using reusable rocket stages, it led to more affordable launch services, spurring the smallsat revolution in Low-Earth Orbit (LEO) and the birth of the new space economy.

For SpaceX and a host of other early space innovators, government was by far the largest space consumer, playing a key role in funding early efforts pivotal to these firms proving out their technology on the path to commercialization.

Fast forward to today. Space startups are receiving unprecedented financing from angel investors to special purpose acquisition companies (SPACs) formed to accelerate the path to a public offering. According to a report from BryceTech, $7.6 billion was invested in startup space firms in 2020, with more than 200 new investors coming into the market for the first time.

As the U.S. races to forge a new economy in LEO fueled by tech innovations, both the commercial and government sectors must collaborate smarter and innovate faster to assure national security and industry leadership in the new space frontier.

New Hybrid Space Architecture

“In the last two to three years there’s been a significant uptick in government wanting to leverage new commercial capabilities,” says Charles Beames, executive chairman of York Space Systems, which manufactures smallsat spacecraft for government and commercial clients.

He says government courtship of commercial capability intensified after adopting a new hybrid space architecture, which calls for integrating new space smallsat capabilities with traditional government space systems.

“Now the Space Force, the Defense Department [DoD] and the Pentagon can award big contracts for this next-generation architecture in Low-Earth Orbit using these small satellites,” says Beames, a retired U.S. Air Force colonel and former principal director for Space and Intelligence programs in the Office of the Under Secretary of Defense (Acquisition, Technology and Logistics).

Provisioning satellites for the government has been a win/win for Beames’ young company and its federal customers. York Space Systems’ first production satellite was launched in 2019 under a DoD-cooperative research development agreement (CRADA) and is still operating on orbit today. Today, the private firm is both profitable and growing, with a mega-manufacturing facility in Denver planned that could boost the company’s production capability from 20 to 80 satellites at once.

“The government provides outstanding feedback and actually allows us to be more competitive commercially,” he says. “Our innovation cycle is much quicker – we complete a formal upgrade of our commercial spacecraft and operations center software every three or four months, compared with government designs, which typically update its software baseline every two or three years.”

The commercial advantage of speed is echoed by other innovators. “There’s a lot of interest in the speed at which we can move and deliver new capabilities,” notes Kari Bingen, chief strategy officer for HawkEye 360, which currently operates nine satellites in three clusters of three that can pinpoint human activity by geolocating radio frequency (RF) emissions on the ground. Defense and civil customers use this intelligence to track illegal fishing boats and sanctioned maritime vessels as well as troop build ups along internationally contested borders.

Bingen was deputy to the Undersecretary of Defense for Intelligence and Security in the Pentagon prior to joining HawkEye 360. She sees a disconnect between government agencies supporting early commercial space developments and rapid scaling of those technologies.

“It’s one thing to bring a smaller company in the door and do a small-scale effort. It’s a whole other thing, once you see mission value or mission benefit, to scale these engagements on the rapid timelines which the commercial sector can move,” she says.

Jim Reuter, associate administrator for the Space Technology Mission Directorate (STMD) at NASA Headquarters, agreed. “To take advantage of the commercial startups and what they're doing, you inherently have to move at their pace. And government organizations are just not designed for that,” he says.

But there are promising signs that things are changing. NASA and military agencies are championing new, more flexible vehicles. Congress, through the National Defense Authorization Act, is standing up a commission to look at how to modernize the programming and budgeting process to go faster.

Adopting a Commercial-first Approach

“We’re seeing a national push across our U.S. government customer set – the Department of Defense, the intelligence community and civil space, where they‘re really looking to migrate to a more commercial-first approach,” observes Dr. Debra Emmons, vice president and CTO of The Aerospace Corporation.

As the government seeks more public/private partnerships using progressive contracting vehicles, agencies still need “to learn how to better assess the risk profile of some of the new companies and determine if they’re a strong match,” Emmons says.

A federal R&D center, The Aerospace Corporation recently launched the Commercial Space Futures Office to help both sides navigate these new acquisition realities. The office hopes to provide a more consistent framework to assess new space companies’ capabilities.

“The U.S. government really needs to harness capabilities … there’s a lot of emergent choices,” she says. The new office will help agencies better identify, connect and align commercial solutions to the national needs while matching companies to those funding opportunities.

Firms can reach out if they need help understanding government-acquisition requirements or connecting with specific agencies, says Emmons, noting that companies can leverage 100,000 square feet of laboratory facilities to validate their technology for insertion or build prototypes.

There are many opportunities for startups to share their breakthroughs with NASA and other federal customers. According to Reuter, STMD is funding more than 1,400 projects, including 140 flight demonstrations. The directorate’s Lunar Surface Innovation Consortium has 600 organizations participating and 35 technologies manifested to fly on commercial Moon landers via NASA’s Commercial Lunar Payload Services (CLPS) initiative.

“We’ve always supported small companies, but what’s different is our relationship has really matured,” he says. “Now the playing field is wide open.”

Reuter points to multimillion-dollar prize challenges, which draw a segment of the innovation community with whom NASA normally doesn’t connect. In a dramatic departure from contracts, NASA has introduced new partnering vehicles that share risk and reward. One example, the Tipping Point solicitation, allows NASA to partially fund a demonstration that will significantly mature a promising technology supporting NASA’s needs while also representing a strong business case for the company.

In exchange, industry must cover a substantial portion of program costs. Leveraging funded Space Act Agreements, Tipping Point has reduced accounting process requirements and simplified methods for retaining companies' intellectual property.

SpaceWerx Welcomes Startups

NASA isn’t the only agency embracing commercial collaboration: the U.S. Space Force recently established SpaceWerx, a part of AFWERX, the Department of Air Force innovation arm, to accelerate commercial technologies.

To date, it has hosted two pitch days to Small Business Innovation Research (SBIR) open topics, which can fast track companies with the most promising technology. Winning pitches qualify for NASA’s SBIR phase two awards, skipping the more elementary phase one stage. The first pitch day, last August, saw 77 small companies join Space Force’s innovation pipeline, leading to 30 awarded contracts. The second pitch day, held this past November, resulted in 19 contract awards.

“We've seen a tremendous response within the last two or three years both at AFWERX and SpaceWerx, where commercial companies and especially startup small businesses come in with great ideas,” says Lt. Col. Walter (Rock) McMillan, SpaceWerx’s director. SpaceWerx’s new Orbital Prime Program calls for industry solutions for active debris remediation. McMillan says the Space Force hopes to have an on-orbit demonstration within the next two to four years.

“We’re sending a loud signal to the commercial industry that we want to rapidly fill on-orbit servicing and manufacturing with a specific focus on debris remediation,” he explains.

SpaceWerx has already begun to scale and transition to new technology, but it will take commercial partners “really looking hard at the business case that they're driving and scaling internally to be able to meet the government demand,” he says.

Government partners also have a role to play, he adds, “committing to a long-term investment to fully transition the technology we’re seeing.”

Declassifying Government Requirements

Many experts agree that one way to facilitate better collaboration between commercial and government entities is to be more open and transparent with communications and requirements that historically have been kept classified.

“National security space infrastructure is way over classified. The director of national intelligence just testified about it and everyone agrees,” observed Beames.

Early efforts in that direction were led by a surprising source: the National Reconnaissance Office (NRO). According to Pete Muend, director of the NRO’s Commercial Systems Program Office, the NRO first declassified U.S. requirements for commercial imagery in an industry request for information in 2019.

Muend recalls, “We went out of our way to look at what we could declassify, what we could talk about, and really got it out there to industry to serve as a demand signal.”

That openness has continued to pay off for NRO, which collects geospatial and signals intelligence data for federal government users. In 2019, the NRO conducted a detailed analysis of commercial imaging capabilities to help inform its future electro optical strategy, concluding that it needed a broad ecosystem of commercial companies to meet its needs long term.

“We don't expect a single provider to be there to meet all of our requirements. We want to build on multiple providers in total to meet our needs and requirements in the future,” says Muend.

Commercial capabilities are key to NRO’s ability to analyze streams of data from multiple sources over an integrated architecture. To date, the office has awarded three multi-year operational commercial industry contracts that have supplied 75,000 images a week to users.

“We're very excited about new entrants. We're looking at everything from traditional EO [Earth observation] collection to more emergent [areas] like radar, radio frequency remote sensing and even hyperspectral,” says Muend.

Muend credits the Director’s Innovation Initiative (DII) for helping accelerate investments in technologies and high payoff concepts relevant to NRO's mission. Since 1998, DII has fielded more than 6,000 proposals in areas such as remote sensing, apertures, communications, systems design, and sense-making.

“Many of the current improvements we’re realizing on our NRO systems began years ago as DII R&D projects,” says Muend, noting that currently, there is significant military interest in direct downlink imagery to remote ground terminals. Another priority is cyber security and information assurance.

Nurturing Early Space Innovators

Many successful startups and smallsat firms credit government support to their current success, and point to key lessons learned early from their engagements with government partners.

“I’ve said for years that Made in Space would not have existed without the government giving us a shot and saying, ‘This is really interesting. Let's crawl, walk, and run together to do interesting and transformational things,’” says former CEO Andrew Rush, currently COO of Redwire Space, which acquired Made in Space in 2020.

First demonstrating its 3D printing capability in 2010 on a parabolic flight aircraft, Made in Space then demonstrated its 3D printers on board the International Space Station. The company provides key technology for NASA’s On-Orbit Servicing, Assembly, and Manufacturing 2 or OSAM 2 (formerly Archinaut One) technology project to use additive manufacturing technology to build large-scale structures in space.

“We keep expanding our manufacturing floor space to keep up with the demand. The big attraction to both our commercial and government customers is that we deliver very quickly, because we’re in rate production so we can deliver within a couple of months,” Rush says of Redwire.

Rush credited the current interest by the investment community in new space companies to the non-dilutive investments that agencies like NASA and the Department of Defense have made over the last decade. His advice to small businesses looking for government funding: think beyond their own technology vision to how they can serve the government’s needs.

“Entrepreneurs with a big grand vision need to figure out how to put that into little digestible chunks that can provide value to the government and to their customers,” Rush advises.

But the days of government taking on all the cost and risk to fund promising tech are no longer the way forward, observes insiders.

“A much more powerful role of the government is to buy what it likes and not [buy] what it doesn’t like,” says York Space Systems’ Beames. VS