The next revolution in space; Lockheed decries latest F-35 order; A new path for special-operations weapons?
The first time I suction-cupped a GPS receiver to my windshield, wires running down to an external antenna and a heavy Dell laptop, my father asked about the monthly cost of such a device. He was skeptical when I told him that navigation signals from space were a free service provided by the U.S. government.
Fifteen years on, most of us carry GPS in our pocket — though we call it our phone — and rely on satellites to the extent that Bill Gattle, the president of Harris' Space and Intelligence Systems division, calls space-based communications the "dialtone of this generation."
Gattle and I recently chatted about where the space industry is going in the next five or so years. Venture capitalists are investing big time in space startups. Established companies are employing more people for space projects as well, which he expects will "create an explosion of new ideas."
Meanwhile, the big satellite makers are no longer making the margins they were when they were the only game in town, so they're looking to diversify and focus on volume.
"Almost all the stuff that we thought was really, really hard in the '80s and '90s and we thought we should get a premium for and make a lot of profit on is becoming commoditized," Gattle said. "That's why you see them looking at this commercial market and going 'I gotta get in the commercial market."
Lockheed Martin, for one, is looking to supply solar arrays that might power tech companies' new, small satellites.
There's also a shift beyond hardware — the spacecraft and its sensors — to analytics and applications. For example, imaging satellite leader DigitalGlobe plans to buy Radiant and start providing analytics, not just pictures. Meanwhile, Harris is working with a company called Highland Agriculture to provide analytics to farmers, and looking for more markets for information gathered in space.
"The cloud is a cloud, but it's the analytics on top of the cloud that makes them powerful," Gattle said. "So that's where their margins are going to go up."
The next revolution? Gattle is looking for satellites to exchange data in orbit, rather than through ground stations.
"That's the transformation I believe will happen in the next five years," he said.
Like a landline that works without a second thought, Gattle says space is too little on the minds of those who depend on it. "Most people when they think of space think about a walk on the moon or something," he said. "They don't think about it in their everyday life."
That's not the case for senior Pentagon leaders, who have made protecting space communications from near-peer militaries and hackers a top priority. But Gattle wants regular folks, not just engineers and physicists, to know the importance of space. So he told his 6,000 employees to try explaining what they do each day to their families at home.
Now, he said, "I've got people writing me notes from all over the place who were saying, 'Wow, I've all of sudden became cool to my kid because I worked on the GPS satellite and I linked it to Pokémon Go.'"
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When Air Force Lt. Gen. Chris Bogdan took the reins of the F-35 program in 2012, he gave a September-to-remember speech in which he called relations between the Pentagon and the jet's maker Lockheed Martin "the worst I have ever seen."
Four years later, relations are better, but they're being tested once again. After 18 months of negotiations, the Pentagon said Wednesday it was ordering a ninth batch of jets, handing Lockheed a $6.1 billion deal for 57 F-35s. All good, right? Wrong.
Six minutes after the Pentagon announced the deal, Lockheed officials decried it. "The definitized contract for [the jets] announced today was not a mutually agreed upon contract, it was a unilateral contract action, which obligates us to perform under standard terms and conditions, and previously agreed-to items. We are disappointed with the decision by the Government to issue a unilateral contract action" on the contract," it said. "We will continue to execute on the F-35 program and we will evaluate our options and path forward."
Responded Bogdan:: "We will continue to negotiate in good faith with industry to keep the F-35 affordable and provide the best possible value for our customers."
What's more, this all comes as the Pentagon and Lockheed are simultaneously negotiating a separate deal for almost 100 more jets. Worth noting: the Pentagon has already signed a deal with Pratt & Whitney for engines for both deals.
How Should the Next Administration Use Special Forces?
A new report from CNA Corp. offers some answers, and has this tantalizing suggestion: "Create a robust intellectual hub at USSOCOM to foster, develop, and transition new technologies and tactics to SOF and the conventional force." It's typically difficult to move equipment from Special Operations to conventional forces since they use different acquisition methods. Check out the full report, here.
One Month Into New Fiscal Year, Foreign Sales Slow
Only four export sales, with a potential value of $415.7 million, have been announced since fiscal 2017 began Oct. 1. All four are to Middle Eastern nations: Iraq, Egypt, Kuwait and UAE. Granted, fighter jet deals with Kuwait, Qatar and Bahrain — collectively valued above $7 billion — have been approved by the Obama administration, if not yet formally announced, and more are expected. "Defense prime managements seemed to indicate during earnings calls [in recent weeks] that the demand pipeline remains strong and is coming from the Middle East, Europe and Asia," Cowen & Company's Roman Schweizer wrote in a note to investors this week.