W ith no borders or territorial limits, space is the most complex warfighting domain and is redefining acquisitions and operations. Today, the com- mercial space industry is a burgeoning market driven by advancements in satellite technology, reusable launch vehicles, and an expanding ecosystem of private space companies. By 2040, the commercial space market is projected to surpass $1 trillion; yet smaller commercial space companies and startups fight for a share of the military market, partly because the inherently slow bureaucratic budgetary process hinders timely adaptation of innovation.
The slow budgeting process has led to decades of discussion but no meaningful reform in planning, pro- gramming, budgeting, and execution (PPBE). Despite some incremental changes, many legacy challenges persist. Defense programs continue to incur budget overruns, technical is- sues delay program schedules, rigid requirements force cost-saving trade- offs in schedule and/or performance, and procurement offices lack incen- tives to rein in ballooning costs. Space acquisition is not immune to these challenges , and its difficulties are amplified by the high costs of de- veloping and fielding space capabili- ties and the assurity needed in space operations. If the objective of defense acquisitions is to field capabilities faster and with better value, are these goals achievable within existing bud- getary and programmatic processes? The proposed adaptive integra- tion techniques below, when imple- mented at the appropriate acquisition decision points, unleash opportuni- ties for adoption, speed, and scale of commercial technologies into space operations. Commercial Solutions Traditional defense contractors win the lion’s share of contracts, but emerging industry partners are investing, developing, and changing the commercial marketplace for re- mote sensing, communications, and space logistics. Commercial space companies recognize the value of adapting their products to address national secu- rity needs. Despite the intentions of the U.S. Government and its space
DIU Space Portfolio Deputy Director Lt. Col. Allen Varghese, USSF, speaks alongside representatives from Planet Labs at a recent event at DIU headquarters in Mountain View, Calif. Source: Defense Innovation Unit
industry partners, the lack of broad integration of new commercial space technologies into the U.S. Space Force (USSF) persists. Today, with the help of organizations like SpaceWERX, smaller commercial companies lev- erage Small Business Innovative Research (SBIR) funds to begin early prototyp- ing of innovative space technologies. However, a key challenge remains for these prototypes to cross the “val- ley of death” and actually become op- erational capabilities integrated into funded acquisition programs. By the time a prototype is funded, developed, and authorized for initial testing or operations and deemed operationally effective, there exists a chasm of time and resourcing before decisions can be made to acquire the capability at
scale. Scale, in this context, refers to contracts for a service or producing additional space systems (satellites, ground terminals, payloads) beyond the initial prototype. Smaller space companies spend privately raised capital to improve their products and invest in researching solutions to USSF capability gaps. These compa- nies do not have a contingent of con- tract capture teams that can operate on overhead (part of the cost savings that commercial technology allows) while the government decides what to do with an effective prototype. Meanwhile, the DoD uses the PPBE’s planning and programming phases to identify Service priorities and decide which to fund. For ex- ample, the Services in early 2025 are
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