FEATURE ARTICLE

July 2005

Revised Acquisition Policy Will Help Space Programs

By Edward Swallow

The Defense Department during the past four months has begun implementing a new acquisition policy for space systems, which will bring about sweeping changes in how programs are awarded and managed.

The rules now in place are contained in National Security Space Acquisition Policy 03-01. Some of the changes are of the back-to- basics variety, while many are more significant. A case in point is the emphasis on “mission success,” which must take precedence over cost, schedule and performance. These criteria also must drive risk management, test planning, systems engineering and funding.

“If we are to succeed on the battlefield a decade from now, we must be successful with space acquisition today,” said Maj. Gen. Craig Cooning, director of space acquisition at the office of the undersecretary of the Air Force. “Recently implemented space acquisition policies for space acquirers build a solid foundation for this success,” he asserted.

According to Cooning, the most important change is that the development phase—and resulting contract—in a space program will not start until after a successful “systems design review with clear measures of mission success.”

The implications of this revised approach to contracting are readily apparent. The government will not start a development contract until there is a firm technical baseline with agreed-to requirements. This may result in more acquisition programs involving two contractor teams until the systems design review, or SDR. On the surface, this may appear to put a larger drain on industry bid and proposal resources. However, if SDR preparation is funded through initial contracts for program definition, risk reduction and concept development, the contractors’ bid and proposal burden is reduced. Finally, the ultimate winner is selected based on the ability of its design to meet the mission success criteria.

The policy allows for program directors to present their case directly to the Defense Space Acquisition Board (DSAB), without external filters. An “independent program assessment” presentation to DSAB is intended to advise the milestone decision authority on the program’s readiness to proceed to the next phase. There is also an independent estimate conducted by the Defense Department’s cost analysis improvement group, and independent assessments by military science-and-technology officials.

The acquisition reform storm that hit in the 1990s created a “best commercial practices” approach to standards. But like any reform movement, it probably went too far. As a result, things like Mil-S-1521B, the foundation of systems engineering, were no longer required in space acquisitions. At the same time, program offices were streamlining; federally funded research and development efforts were cut back, and artificial limits on the size of program offices were imposed. The result was that contractors won based on cost alone. There were few people in the program offices to make a “best value” determination. Requirements and mission success were defined by each contractor, so there was no fair basis for comparison except by cost.

NSS 03-01 is reintroducing the need for standards. A program that demonstrates such need is the Space Based Infrared System. SBIRS did not have any requirements for component or subsystem tests. The assumption was that best commercial practices would ensure that working components, subsystems and interfaces would be worked out in the design process. After all, that is how it works in the auto industry, the computer industry and others. Why not space?

The answer is that space is a unique industry. There are no prototypes. The first item built is an operational system. The spacecraft itself is so tightly packaged that any change made after subsystem assembly dramatically affects schedule and cost. Some SBIRS subsystems had problems that, had they been found in tests, would have been relatively easy and inexpensive to fix. They are now major cost drivers.

Work force issues associated with space programs, meanwhile, are being addressed by the Air Force Space Command. The head of the command, Gen. Lance Lord, has developed the “space cadre” concept, aimed at training acquisition officers to manage space programs and make sure that projects meet the needs of the force. This is a first step towards successful space acquisition.

The next step is to have a professional space acquisition cadre. Systems engineering in space programs is not learned in college or in a mission operations center. Systems engineering is a skill that takes many years to develop.

The Air Force must find a way to identify the right people to lead the acquisition process, retain them and nurture their careers. This is particularly critical, as the Defense Department continues to upgrade space capabilities and prepares to launch several major modernization initiatives.

Edward Swallow chairs the Space Division of the National Defense Industrial Association.

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