Feb. 16, 2011—Air Force leaders expect to save at least 10 percent off the often multi-billion-dollar price tag of new satellites with the implementation of the evolutionary acquisition for space efficiency, or EASE strategy. They say it's a completely new approach to space acquisition that will change the way the service conducts business.
EASE made its debut in the Fiscal 2012 budget request released Monday. Instead of placing the space budget under stress by having it bear the full procurement cost of one new satellite—which can cost upwards of $2 billion and require the service to pull funding from other space priorities—the Fiscal 2012 budget spells out a new, incremental funding approach. It's based on blocked buys, fixed-priced contracts intended to prevent requirements creep, and a new way of appropriating funding.
Maj. Gen. Alfred Flowers, USAF deputy assistant secretary for budget, said Monday when briefing on the new budget that the acquisition strategy will require full support from Congress because it utilizes advanced procurement, regular procurement, and advanced appropriations.
Under EASE, the Air Force will start the procurement of two Advanced Extremely High Frequency communications satellites in Fiscal 2012 for a total of $550 million. It will then request advanced appropriations in the subsequent five years, thereby creating a steady stream of funding for the next six years.
It also will put $185 million into advanced procurement for the Space Based Infrared System with the intention of spending another $550 million in Fiscal 2013 for two SBIRS early warning satellites. The Air Force also intends to request procurement dollars for five years following the Fiscal 2013 request for SBIRS.
"The idea is that you take the savings you find in terms of the lower cost of the satellite and you reinvest through a capability improvement program, so you have [research and development] investment to improve the quality of the system, but also to keep the expert engineers and development folks actively engaged," said Air Force Undersecretary Erin Conaton during a briefing with reporters Tuesday at the Pentagon.
Maj. Gen. John Hyten, director of space programs in the Air Force Secretariat, said the Air Force did not necessarily choose AEHF and SBIRS as the pathfinders for this new strategy because they are both manufactured by the same contractor: Lockheed Martin. But both he and Conaton acknowledged that there is the potential to reap even more benefits in the long run with them since both satellite types are built in the same facility and use virtually the same bus structure.
"That's why . . . we are hoping we can get more than 10 percent [savings], but we don't want to overpromise," said Hyten during the same briefing.
Industry is on board with the strategy, for obvious reasons. But Joanne Maguire, executive vice president of Lockheed Martin Space Systems, said at a space conference late last year such a strategy only works if the funding is stable and predictable. If not, she said, prices are likely to go up even more.
Conaton said the Defense Department is aware of the risk and is committed to enforcing EASE in its entirety, despite the new era of budget austerity. Similar discussions, she added, have already taken place within the Pentagon and are ongoing on Capitol Hill right now. It's too early, though, to see which way Congress is leaning. But the Air Force has quite a stack of "legislative mandates and reports they've sent to [the Pentagon] telling us to do space acquisition differently," said Conaton. She hopes to see the strategy applied more broadly once the Defense Department, Congress, and industry fine tune the details.
"It will require discipline on the part of the department leadership. The thing that gives me confidence it will happen this time is because [Defense Secretary Robert Gates] himself, the deputy secretary of defense, and all of the senior leadership all the way down have committed that this is how we are going to address the challenges we've had in space acquisitions," said Hyten. He added, "Congress has told us for years, the press has told us for years, that we need to figure out a better way to do space acquisition, and we believe we have that in EASE."(Flowers transcript) (For Maguire's comments, see Cooperation and Collaboration in Space from Air Force Magazine's January issue)