Exclusive: Kendall floats commercial space ideas to VP Harris [Updated]

Corrected Feb 9, 2022 at 11:44 am ET: After publication of the story, a personal spokesman for Air Force Secretary Frank Kendall issued a statement that contradicted significant portions of the original story. The following statement is from Lt. Col. Justin Brockhoff:

“At the direction of senior Department of Defense leadership, the Department of the Air Force — as the military department that oversees the U.S. Space Force — wrote the memo as a proactive means to address matters important to the National Space Council and its chair, the Vice President. The memo, signed by Secretary Kendall, was coordinated with multiple offices within the Department of Defense and submitted by Secretary Kendall to the Office of the Deputy Secretary of Defense upon completion. The memo is now with the Secretary of Defense’s office for review and has not been submitted to any offices outside of the Pentagon by the Department of the Air Force.”

While the original sources for this piece stand by their information, Breaking Defense has learned that the memo from Kendall has not officially been delivered to the National Space Council level as of this point. We regret the error. The original story remains below.

WASHINGTON: As the Pentagon and the Intelligence Community grapple with how to harness runaway commercial space innovation, Air Force Secretary Frank Kendall has sent an unsolicited list of suggestions to Vice President Kamala Harris, the chair of the National Space Council, Breaking Defense has learned.

The six-page memo was informal — not routed through the Office of the Secretary of Defense, nor directly requested by Harris’s office. Instead, it appears to be an effort by Kendall to put forth ideas that fit into the Dec. 31 United States Space Priorities Framework, which pledged to support the US commercial space industry in global market competition while leveraging “new commercial space capabilities and services to meet national security requirements.”

“The paper you’ve referred to was not in response to a specific question. It was a proactive effort by the department to support the Vice President, and ensure the Department of Defense can support Biden Administration efforts to foster a broader role for the commercial space sector in supporting a more resilient space capabilities,” a Department of the Air Force official said in an email.

Kendall himself mentioned the memo at a close-door meeting sponsored by the Center for the Study of the Presidency and Congress in late January, several industry sources present said, although he was coy about its contents. However, judging by Kendall’s comments, these sources said they weren’t expecting any ground-breaking changes in the go-slow approach the Pentagon and the IC have been taking toward commercial industry.

Nonetheless, Kendall’s move is striking for several reasons.

First, it comes prior to Senate confirmation for the Biden administration’s two top Defense Department space officials: John Plumb, nominated as the assistant secretary for space policy; and Frank Calvelli, for assistant secretary of space acquisition, a new position created by Congress to serve as the first independent space acquisition authority. (Both men have backgrounds in the IC, which has been slow to reckon with the explosion of space innovation around the world.)

Second, it comes prior to the completion of yet another shakeup of Space Force’s acquisition hub, Space Systems Command in Los Angeles, that Kendall himself launched late last year.

Finally, it also comes at a time when there is increasing frustration in both industry and Congress about what they see as a lack of follow-through in official rhetoric about the need to link commercial and national security assets into a more affordable, more resilient framework of space systems in the face of growing adversary threats — something often referred to as a “hybrid architecture.”

Commercial capabilities in a number of technical areas increasingly match or surpass those of national security satellite systems, at a much lower price. However, concerns about protecting the US defensive edge against adversaries and hidebound acquisition practices continue to stand in the way of DoD and the IC in taking full advantage of that fact.

“The capabilities provided by commercial firms can be used to complement government space systems across a wide range of national security missions and fill in gaps in capabilities where the U.S. government has lagged,” explains a new study by the Center for Strategic and International Studies (CSIS). “The challenge for the military and intelligence community is understanding how to leverage commercial capabilities for military advantage while protecting national security and maintaining the health and competitiveness of U.S. companies in the global remote sensing market.”

While the CSIS study, called “Commercial Space Remote Sensing and Its Role in National Security,” is focused on the burgeoning Earth observation industry, its conclusions are in general applicable to other space sectors, such as communications, as well.

In particular, CSIS hones in on the fact that for many in DoD and the IC, leveraging commercial industry means simply buying up commercial know-how and technology, and inserting it into bespoke national security systems built specifically for DoD. But this acquisition model is increasingly outdated, the authors argue.

“Buying space systems as products does not fully access the innovation and capabilities in the commercial space remote sensing market. Many commercial space companies are built around a services-based business model where the data collected can be sold to more than one customer,” the study says. “The product-based model puts relatively more risk on the government in terms of up-front costs, technology obsolescence, operating costs, and capacity limitations. Buying remote sensing as a service allows the government to leverage private capital and put more of these risks on the companies involved and, by extension, their investors.”

Further, it notes that restrictive national security regulations on commercial acquisition — such as the NRO’s plans to impose “shutter control” on commercial firms contracted to provide electro-optical satellite images — not only will backfire, but also are just not effective, because these capabilities are rapidly proliferating and easily available on the global market.

As one government official put it, DoD and the IC have yet to come to terms with if, let alone when, it makes sense to move from acting as a “prime” contractor to instead acting as a “customer.” However, the official said, more and more senior national security space officials are looking “in the right direction” toward a more open embrace of commercial capabilities as they ponder how to balance competing equities.