Category: Commercial

GeoEye Bids to Acquire DigitalGlobe; EnhancedView Funding OK for 2012-UPDATE

GeoEye Bids to Acquire DigitalGlobe; EnhancedView Funding OK for 2012-UPDATE

UPDATE:  A quote from and a link to DigitalGlobe’s response to GeoEye’s proposal replaces an earlier quote from the Wall Street Journal.

Chris Quilty, Senior Vice President for Equity Research at Raymond James & Associates, reports that GeoEye is making a bid to buy rival DigitalGlobe.  GeoEye also said that its deal with the National Geospatial-Intelligence Agency (NGA) for imagery under the Enhanced View contract will be fully funded for 2012.   Rumors that NGA is going to cut funding substantially for Enhanced View have been rampant for months.

Quilty’s report reflects a GeoEye press release today announcing that the company is proposing to purchase DigitalGlobe for $17 per share, a 26 percent premium to DigitalGlobe’s closing share price yesterday.  Quilty notes that DigitalGlobe has rejected previous bids, but the fundamental issue is whether the government would approve a merger of the only two companies that provide commercial satellite imagery.  “The government has made great efforts to ensure a competitive market for weapon systems and services, often creating a ‘managed duopoly.’ … This desire … could prove to be a major hurdle to regulatory approval, even if the benefits … are tangible and significant,” he said.

The GeoEye press release included the text of its letter to DigitalGlobe President Jeffrey Tarr.  DigitalGlobe released a statement saying that its Board of Directors “will carefully review and consider the proposal and pursue the course of action that is in the best interests of DigitalGlobe and its stockholders.”

GeoEye separately said that NGA notified the company that it would get full funding of its Enhanced View contract for the 2012 contract term and that development of its GeoEye-2 satellite is “on time and on budget for a launch in the first half of 2013.”

DigitalGlobe similarly reported earlier this week that NGA said it would fully fund their Enhanced View contract as well for 2012.  DigitalGlobe will get $250 million while GeoEye will receive $111 million according to their respective press releases.

Rumors that NGA is planning to cut funding for Enhanced View have been widespread for several months and the companies’ announcements are for 2012 only.  An April 19 New York Times story portrays the underlying issue as a “clash” between the military and the intelligence community.  It quotes GeoEye official Bill Wilt as saying “[t]he debate is really between the military, which needs a lot of imagery but doesn’t need the highly classified imagery, and the intelligence community, which wants to keep the capability to produce its own imagery.”

The National Reconnaissance Office (NRO) builds and operates the government satellites that provide the highly classified imagery.  Its director, Bruce Carlson, announced his resignation on April 18.   He and National Intelligence Director James Clapper reportedly advocated less reliance on commercial imagery.   Betty Sapp, currently NRO’s principal deputy director, already has been named to replace Carlson.

SpaceX Looking at May 19 or May 22 for Launch

SpaceX Looking at May 19 or May 22 for Launch

SpaceX is targeting May 19, with May 22 as a backup date, for the delayed launch of its next demonstration flight as part of the commercial cargo program.

The launch has been delayed a number of times.   In an emailed announcement this afternoon, SpaceX spokeswoman Kirsten Brost Grantham said: 

 “SpaceX and NASA are nearing completion of the software assurance process, and SpaceX is submitting a request to the Cape Canaveral Air Force Station for a May 19th launch target with a backup on May 22nd.  Thus far, no issues have been uncovered during this process, but with a mission of this complexity we want to be extremely diligent.”

SpaceX Delays May 7 Launch to Space Station

SpaceX Delays May 7 Launch to Space Station

SpaceX announced today that the launch of its Dragon spacecraft to the International Space Station is “unlikely” to take place on May 7 as planned.

The launch has been delayed a number of times, but a successful static fire test of the Falcon 9 engines on Monday raised hope that the launch now was imminent.   In an emailed message today, however, SpaceX said —

“At this time, a May 7th launch appears unlikely.  SpaceX is continuing to work through the software assurance process with NASA.  We will issue a statement as soon as a new launch target is set.”

SpaceX Static Fire Test Today Prepares for Launch Next Week – UPDATE

SpaceX Static Fire Test Today Prepares for Launch Next Week – UPDATE

UPDATE:  The static test fire was successful on the second attempt at about 4:15 pm ET.

SpaceX will conduct a static fire engine test at 3:00 pm ET today in preparation for its scheduled test launch to the International Space Station (ISS) next week.  The company’s webcast of the engine test begins at 2:30 pm.

It is a 2-second test of the nine Merlin engines on SpaceX’s Falcon 9 rocket and is part of a complete dress rehearsal for the next Falcon 9 launch scheduled for May 7. 

If all goes according to plan, SpaceX will launch the Falcon 9 with a Dragon spacecraft at 9:38 am ET on May 7 as the second test launch in NASA’s Commercial Orbital Transportation Services (COTS) program.  The COTS program is funding two companies, SpaceX and Orbital Sciences Corp., to develop launch vehicles and spacecraft that can deliver cargo to the ISS.

Three SpaceX test launches were planned as part of the COTS program.  The first was successfully conducted on December 8, 2010 when the Falcon 9 delivered a Dragon spacecraft to orbit and was then deorbited and recovered at sea.  SpaceX convinced NASA to let it combine the objectives of the last two test launches into this flight, which NASA calls C2+ — the second COTS test flight plus the additional objectives that had been planned for the third.  Under the type of agreement NASA and SpaceX have — a Space Act Agreement — the company is paid only when it successfully completes milestones.  However, NASA cannot set requirements and has more limited insight and oversight of the company’s activities than with a traditional procurement method such as a fixed price or cost plus contract.

A lot is riding on this launch and the COTS program overall.  NASA has no way of its own to send cargo — or people — to the ISS now that the space shuttle program has ended.   Russia, Europe and Japan, all of whom are partners with NASA in the ISS program, have cargo spacecraft that deliver supplies to the ISS crews, but the volume of cargo required to support six crewmembers 365 days a year exceeds their capacity.  When the ISS program was planned, it assumed that the space shuttle would be available throughout the ISS’s utilization period.  President George W. Bush’s decision to terminate the space shuttle program as soon as ISS construction was completed changed those plans and the COTS — or “commercial cargo” — program emerged.

SpaceX is planning to evolve its Dragon spacecraft to carry people as well as cargo as part of NASA’s commercial crew program to take astronauts to and from the ISS.  Today, only Russia can launch and return ISS crews.

Demonstrating commercial cargo is the first step.  NASA and SpaceX are cautioning everyone to keep their expectations in check for this flight, stressing that it is a test flight.  In fact, this flight has been postponed several times, mostly recently from April 30, as SpaceX strives to ensure it goes well.  Today’s test is another step in that process.

House Appropriators Report CJS Bill, Floor Debate Scheduled for May 8

House Appropriators Report CJS Bill, Floor Debate Scheduled for May 8

The House Appropriations Committee completed markup of the FY2013 Commerce-Justice-Science (CJS) appropriations bill that funds NASA and NOAA today and favorably reported the bill to the House.  The chairman of the committee, Rep. Hal Rogers (R-KY), announced that it will be the first FY2013 appropriations bill to be debated on the House floor this year.  Debate is set to begin on May 8.

Rogers applauded the fact that the bill is proceeding through committee and floor consideration in “regular order” this year.  Last year, the appropriations process was caught up in high stakes political battles.   The CJS bill made it through full committee markup in the House and Senate, but no further.  The final numbers were negotiated behind closed doors and wrapped into a “minibus” appropriations bill that passed in November.

The appropriations committees on both sides of the Hill are trying to return to regular order this year, and the CJS bill is one of the first to move through subcommittee and full committee markup in both the House and the Senate.  Most Washington pundits still do not believe that the appropriations process will be finalized by October 1 when FY2013 begins, however.   Negotiations are still needed on many issues and the House adopted a budget resolution that gives most of its appropriations subcommittees less money to spend than their Senate counterparts. In total, the House CJS bill provides $51.1 billion for the agencies under its jurisdiction.  The House CJS subcommittee had $731 million less to spend than its Senate counterpart because the House passed a budget resolution with lower spending thresholds than agreed to last year in the Budget Control Act (BCA).  The Senate is using the BCA figures.

For civilian space activities, the biggest difference between the House and Senate is that the Senate wants to transfer NOAA’s satellite activities to NASA.

Much larger political issues loom over the entire federal spending debate, starting with the threat of a sequester beginning on January 1, 2013 if the House, Senate and White House do not reach agreement on how to avoid it.  Coupled with an expected debate over extending the Bush-era tax cuts that are due to expire at the end of this year and election year politics, the alacrity and civility in moving the CJS and some of the other appropriations bills may not stand the test of time.

Today, however, civility and regular order were the watchwords.  The House committee adopted a manager’s amendment offered by CJS subcommittee chairman Frank Wolf (R-VA).  The text of the amendment has not been posted on the committee’s website yet so whether it affects NASA or NOAA is not clear.  The committee states only that it “makes technical changes to the bill and report, as well as adjustments and additions to various non-controversial language provisions.”   Several other amendments were offered, but none was directed at NASA or at NOAA’s space activities.

One member, Rep. Sam Farr (D-CA), engaged in a colloquy about the need for more money to study the oceans, complaining that too much money is spent on atmospheric and space science and not enough on the oceans.  He did not offer an amendment, however.

The House bill provides NASA with $17.574 billion, which it says is $138 million below the request of $17.711 billion.   The Senate bill (S. 2323), which was marked up by the full Senate Appropriations Committee last week, provides NASA with $19.4 billion, but the increase is because it transfers NOAA’s satellites activities to NASA.  Without the transfer, the Senate committee said the bill cuts NASA’s budget by $41.5 million compared to its FY2012 enacted level.  Congress appropriated $17.800 billion to NASA for FY2012, but also included an across-the-board rescission that brought the figure down to $17.770 billion.  Thus, the Senate recommendation for NASA for FY2013 would be $17.729 billion, $155 million more than the House.  (The House committee report says that its recommendation of $17.574 billion is a $226.2 million reduction from the enacted level for FY2012, but that must not include the rescission since $17.574 billion plus $226 million is $17.8 billion.)

The House bill gives NOAA $4.962 billion, which it says is $92.877 million less than the President’s request for FY2013 ($5.1 billion), and $67.994 million above the FY2012 enacted level.    It does not call for NOAA’s satellite programs to be transferred to NASA, and fully funds NOAA’s request for the Joint Polar Satellite System (JPSS) at $916 million.   The Senate bill cuts NOAA’s request to $3.4 billion by transferring JPSS and NOAA’s other satellite programs to NASA. 

 

SpaceX and NASA Set May 7 as New Launch Target

SpaceX and NASA Set May 7 as New Launch Target

SpaceX announced today that May 7 is the new date it has chosen to attempt its second test launch as part of NASA’s Commercial Orbital Transportation Services (COTS) program. 

The Space X announcement in the form of an email said “NASA and the Cape Canaveral Air Force Station have approved SpaceX’s request to set May 7th as the target launch date for the upcoming COTS 2 mission.”   NASA later issued its own press release quoting NASA Associate Administrator for Human Exploration and Operations Bill Gerstenmaier as saying:  “We appreciate that SpaceX is taking the necessary time to help ensure the success of this historic flight. We will continue to work with SpaceX in preparing for the May 7 launch to the International Space Station.”

NASA refers to the mission as C2+ — the second COTS test flight that combines objectives from the third (and last) test flight at SpaceX’s request.  SpaceX refers to it as COTS 2.  The goal is not only to launch the Falcon 9 rocket and Dragon spacecraft to the vicinity of the International Space Station (ISS), but to actually berth with the ISS and transfer supplies and equipment.  That latter objective was to be part of the third test flight, but SpaceX convinced NASA to let it try on this flight.

 

 

SpaceX Delays Launch by One Week

SpaceX Delays Launch by One Week

SpaceX announced today that it is delaying its test launch to the International Space Station by another week to allow more testing.

The launch was tentatively approved for April 30 (with May 3 as a backup date) last week after a NASA Flight Readiness Review, but NASA’s Associate Administrator for Human Exploration and Operations Bill Gerstenmaier said at the time that additional software testing was required and a final decision had not been made.  Today was the day that SpaceX had to report to NASA on its progress in testing the software.

In an e-mailed message, SpaceX said: 

“After reviewing our recent progress, it was clear that we needed more time to finish hardware-in-the-loop testing and properly review and follow up on all data. While it is still possible that we could launch on May 3rd, it would be wise to add a few more days of margin in case things take longer than expected. As a result, our launch is likely to be pushed back by one week, pending coordination with NASA.

“We will send out an announcement when a new target it [sic] set.”

 

House and Senate Appropriators Approve Their CJS Bills–Update

House and Senate Appropriators Approve Their CJS Bills–Update

The House Appropriations Commerce-Justice-Science (CJS) subcommittee approved its draft FY2013 CJS appropriations bill today.  Across Capitol Hill, the full Senate Appropriations Committee gave the nod to its version of the bill.   These are only the first steps in the lengthy congressional process to get approval for FY2013 spending, and the two bills are quite different, but they are steps nonetheless.

The Senate bill is now ready for floor action, although it is anyone’s guess as to when that will occur.  The House bill still must be marked up at full committee level.  No date for that action has been announced.

The biggest difference in the two bills with regard to space programs is that the Senate wants to take the management of weather satellite programs away from NOAA and give it to NASA.   The Senate bill transfers more than $1 billion from NOAA to NASA to pay for it.   Thus the Senate total for NASA is $19.4 billion, although the committee said that if the transfer did not take place, the total for NASA would be $41.5 million less than the President requested.    The House bill does not call for transferring NOAA’s satellite programs to NASA.  It would provide NASA $17.6 billion, $138 million less than the President’s request.

Both bills would add money for robotic Mars exploration.  The Senate bill adds $100 million; the House bill adds $150 million.  However the House bill requires that the National Research Council (NRC) certify to Congress that NASA’s new Mars plan conforms with the NRC’s decadal survey priority of missions that will ultimately return a sample of Mars to Earth.   If the NRC does not make such a certification, the $150 million will be allocated to a mission to Jupiter’s moon Europa instead.  The Europa mission was the second priority for large missions in the decadal survey.   Both bills provide the requested funding for the James Webb Space Telescope.

Both bills support the Space Launch System (SLS) and the Orion spacecraft, as well as commercial crew.   Not all the details of the bills have been made public yet, but it appears that the Senate adds about $160 million for SLS and $175 million for Orion.  The Senate provided $525 millon instead of the $830 million requested for commercial crew.   The House bill would add $110 million for SLS and keep Orion funding at the requested level.  The House has not publicly indicated its funding level for commercial crew, but the Commercial Spaceflight Federation issued a press release stating that the amount is $500 million and asked Congress to provide “the highest possible funding level” as it finalizes the NASA budget.

The House did not appear to make any major changes to NOAA’s satellite programs.  Overall, it reduced the NOAA request from $5.1 billion to $5.0 billion.   It fully funded NOAA’s $916 million request for the Joint Polar Satellite System (JPSS).  As mentioned, the Senate would move the money allocated for NOAA’s satellite programs to NASA. 

NASA already is the acquisition agent for NOAA’s satellites, but the agencies work together on a reimburseable basis.  Congress appropriates the money to NOAA and NOAA then transfers much of it to NASA.    Senator Mikulski, who chairs the Senate CJS subcommittee, says that the government will save $117 million in FY2013 by getting rid of unnecessary management duplication by giving the money directly to NASA.  Mikulski criticized NOAA for continuing overruns on its satellite programs and insisted that NASA could do a better job.  NOAA would continue to operate the satellites once they are in orbit under the Senate CJS plan.

Others argue that whatever agency sets the requirements must be the agency responsible for obtaining the money to pay for implementing them.  Otherwise, there is no brake on the requirements-setting process and “requirements creep” sets in.  As the agency that needs the data to produce weather forecasts, NOAA presumably would remain in control of the requirements, while NASA would have to fight the budget battles to pay for satellites to meet them, a difficult position to be in.   Consequently the Senate proposal is expected to be controversial.

Overall, the House and Senate are working under very different budget assumptions for FY2013.   The Senate is using the top level assumptions that are in law as part of the Budget Control Act (BCA) enacted last year after considerable debate over raising the debt limit.    The Senate insists that those are the budget targets for this year, but the House decided to pass a different, lower set of spending numbers to guide its appropriations process.  Hanging over all of this is the threat of sequestration, also part of the BCA, wherein NASA, for example, would be subject to an eight percent across-the-board cut beginning January 1, 2013.  

Thus, even though these appropriations actions may make it appear that Congress is moving more quickly than usual in funding the government for the upcoming fiscal year, it is not expected that the FY2013 appropriations bills will be finalized before the election in November.  FY2013 begins on October 1.

 Editor’s Note:   This story is updated with the Commercial SpaceFlight Federation press release.

 

 

Satellite Industry Applauds DOD's Sec. 1248 Report on Satellite Export Controls

Satellite Industry Applauds DOD's Sec. 1248 Report on Satellite Export Controls

The Satellite Industry Association (SIA) applauded the Department of Defense’s (DOD’s) final report on the national security implications of relaxing export control regulations on satellites.  The “sec. 1248” report was released today.

The report was prepared by DOD and the State Department in response to sec. 1248 of the FY2010 defense authorization act wherein Congress directed DOD to assess whether national security would be negatively impacted by moving satellites from the U.S. Munitions List (USML) controlled by the State Department to the dual-use Commerce Control List (CCL) administered by the Commerce Department. 

The White House issued a fact sheet summarizing the report.

The report concludes that communications satellites that do not contain classified components and remote sensing satellites with performance parameters below certain thresholds do not contain technologies unique to the United States and are not critical to national security.  Thus, they would be more appropriately designated as dual-use on the CCL list instead of on the USML.  That also applies to systems, subsystems, parts and components associated with the satellites.  At a press conference today, Deputy Assistant Secretary of Defense for Space Policy Gregory Schulte said it would move “hundreds of thousands” of components from the USML to the CCL.

U.S. satellite manufacturers have been seeking relief from the comparatively onerous export control system dictated by the USML and its associated International Traffic in Arms Regulations (ITAR) for more than a decade.  The George H.W. Bush and Clinton Administrations had moved commercial communications satellites from the USML to the CCL in the early 1990s.   Congress reversed that decision in the FY1999 defense authorization act (P.L. 105-261) after a special congressional committee determined that U.S. satellite manufacturers violated export control laws and assisted China in developing its missile technology by aiding in analysis of launch failures of Chinese rockets that were carrying U.S.-built satellites.   No U.S.-built satellites or satellites containing U.S. components have been exported to China for launch since that time. 

European companies began building satellites without U.S. components that are “ITAR-free” — not subject to the U.S. ITAR rules — and selling them to customers who do not want to deal with the U.S. export control system.  Today’s report states that the current U.S. export control regime “places the U.S. industrial base at a distinct competitive disadvantage when bidding against companies from other advanced satellite-exporting countries that have less stringent export control policies and practices.”

This report does not recommend changing how China is treated, however.  Appendix 4 of the report points out that an earlier law, P.L.  101-246, that was enacted after the 1989 Tiananmen Square uprising would remain in effect.  It prohibits launching U.S. satellites on Chinese rockets without a presidential waiver.   Such waivers were granted in the first half of the 1990s, which allowed U.S.-built satellites to be launched by China and led to the problems addressed by the 1999 law.  The so-called Tiananmen Square restrictions also prohibit export of items on the USML to China.   If this report’s recommendations are followed and hundreds of thousands of items are transferred from the USML to the CCL, that restriction might no longer apply.  However, the report calls for changes to the CCL, too.   It recommends prohibiting items on the CCL from being transferred to any “embargoed country,” a category that includes China, Syria, North Korea and others.

Some influential members of Congress remain adamantly opposed to allowing transfer of any satellite technology to China, so that recommendation may assuage those concerns.  The anti-China sentiment is quite strong with some Members, however, as illustrated by Rep. Frank Wolf’s (R-VA) long standing opposition to any U.S.-Chinese space cooperation.

SIA, a U.S.-based trade association for the commercial satellite industry, hailed the report.   SIA President Patricia Cooper said it represents “a more contemporary picture of the national security, space and satellite environments.”   She added that SIA and its members hope Congress will pass H.R. 3288, an export control reform bill sponsored by Rep. Howard Berman (D-CA) that contains provisions similar to what is recommended in the report.

Congressional action is needed because the FY1999 defense authorization act removed presidential authority to decide how to regulate satellite exports.  It requires that satellites, their components, associated technical data and related ground equipment be treated as munitions.    The report and the SIA both point out that the satellite industry is the only sector where Congress has mandated export policy by law.   “Space-related items, even if they have civilian applications, are the only dual-use items that are required by law to be controlled as defense articles,” the report states, while the President has the authority to determine which set of export regulations govern any other sector. 

Schulte said today he believes the approach recommended in the report will strengthen U.S. national security “by energizing the industrial base” and allowing U.S. companies to better compete globally.  He is hopeful that Congress will agree.   He and Lou Ann McFadden, Chief of the Strategic Issues Division at the Defense Technology Security Administration (DTSA), stressed that by removing these items from the USML, the government can focus on preventing the transfer of technologies that really could affect national security.

McFadden expressed frustration that DTSA is required by law to sit in on meetings with companies that over the past 15 years have demonstrated a “culture of compliance” with the current export control laws.  “We are frustrated that we have to be present at low risk activities when there are high risk activities we want to monitor,” she said.  “We’re forced to monitor the same people over and over on the same activities.”  Instead, she believes they should be focusing on helping new companies, for example, “get off on the right foot” in understanding and complying with export controls.

DOD Satellite Export Report Expected to be Released Tomorrow

DOD Satellite Export Report Expected to be Released Tomorrow

Expectations are high that a scheduled press conference tomorrow at the National Space Symposium (NSS) in Colorado Springs, CO presages the release of a long-awaited report from the Department of Defense (DOD) on whether the rules governing export of commercial communications satellites should change. 

The so-called “sec. 1248 report” is in response to congressional direction in section 1248 of the FY2010 defense authorization act for DOD to prepare a report on the national security implications of removing satellites and related components from the U.S. Munitions List.  An interim report released last year was widely criticized.  The final report is eagerly anticipated by Congress and the satellite industry.

According to the Space Foundation’s NSS website, from 12:00-12:30 pm MT (2:00-2:30 pm ET), two DOD officials will provide an update on export control reform.  The officials are Amb. Greg Schulte, Deputy Assistant Secretary of Defense for Space Policy, and Lou Ann McFadden, Chief, Strategic Issues Division, Defense Technology Security Administration.   The NSS website lists the following information for those who want to call in to listen to the press conference:  Call in: +1.866.330.1200 begin_of_the_skype_highlighting            +1.866.330.1200      end_of_the_skype_highlighting, passcode 5768000#

Export control reform in general is a priority of the Obama Administration to order to make U.S. companies more competitive in global markets.   Exports of commercial communications satellites are a special case, however.  During the early 1990s, they were moved from the strict regime of the Munitions List, overseen by the State Department, that guards exports of technology that could harm national security to the dual-use Commerce Control List administered by the Department of Commerce for technologies that have both military and civilian uses.  Items on the Munitions List are governed by the International Traffic in Arms Regulations (ITAR).

In the late 1990s, a special congressional committee chaired by then-Rep. Christopher Cox found that U.S. satellite manufacturers violated export control laws and aided China in developing ballistic missile technology when they reviewed China’s failure analyses of why certain commercial communications satellite launches failed.  The report of the Cox Committee led Congress to pass a law that moved commercial communications satellites back to the Munitions List.  No U.S.-built satellites or satellites with U.S. components have been approved for export to China for launch since then.   European companies took advantage of this to build “ITAR-free” satellites that can be exported to China for launch.

U.S. satellite manufacturers argue that the technologies in commercial communications satellites are widely available and pose no risk to national security.  They want to be able to build satellites that their customers can launch on comparatively inexpensive Chinese rockets.  They hope that this DOD report with change the paradigm in which commercial communications satellites are considered.