How balancing speed and cost works in fielding new space systems

Nearly every conversation we have with industry executives and those our sister publication FCW holds with government leaders inevitably get to this theme: the desire and need by agencies and companies to field new technologies at quicker turns.

We particularly hear that theme in the area of space, given the numerous observations by military and other government officials of how other countries like China and Russia are looking to match and even exceed the U.S.’ presence in that domain.

Space is one of the areas where alternative acquisition strategies such Other Transaction Authority are used to meet mission objectives and field capabilities faster. At times that means customers deploy a system with slightly less than 100 percent of the capability in order to get it out there within schedule and cost parameters.

With all that said: just how comfortable are government agencies with acquiring capabilities at less than 100 percent, given that has been a historical precedent and particularly in the national security domain?

Stan Dubyn, CEO of Boeing’s Millennium Space Systems subsidiary, said during a recent conference call with reporters that comfort level with sub-100 percent capability is dependent on the individual agency and how urgent their need is.

Dubyn described how Millennium, the satellite maker Boeing acquired last year, works with agencies as they think through that calculus of what they need, its urgency and cost profile to work within.

Keep in mind that Millennium touts its ability to deliver 90 percent of the capability at 10-20 percent of the cost and schedule.

“A lot of the customers that we have, the capabilities that they need are not in five or 10 years, they need it very soon, and it is very much in line with the type of work that we do in terms of developing satellites on 12-month or 24-month schedules,”  Dubyn said. “Starting from scratch, we’ll have something ready in 12 or 24 months depending on the complexity, depending on the payload, depending on the risk posture.”

Regarding customers that must have 100-percent capability regardless of price and schedule, this is where Millennium’s relationship with its parent company comes in.

“We would certainly work with them and work with our partners at the Boeing company to help realize what we can do, maybe more affordably and be able to hopefully negotiate something that makes sense in terms of timeliness, with an eye on the budget and meeting what we call the mission threshold requirements,” Dubyn said.

Dubyn separated requirements into two main types: thresholds that are the minimum to fulfill a capability, and then objectives for doing everything.

“That’s the trade where customers have to look at the budget, they have to look at the schedule requirements and what capabilities they need,” Dubyn said. “Sometimes it can be a very difficult trade to do. I will say the less money and the less schedule you have, the more apt a customer is to want to negotiate 90 percent of the capability at a fraction of the cost and schedule.”