Based on its analysis of US military space programs, the GAO offers some insights into the drivers of costs and delays: 

  • the US DoD starts more weapons programs than it can afford, generating a competitive dynamic whereby advocates and industry drive down cost estimates to unreasonable levels and DoD is forced to constantly shift costs around and between programs, resulting in further overheads and uncertainty;
  • because DoD tends to start its programs too early, technology invention extends into acquisition, resulting in ongoing technical fixes that push out deadlines, and making cost estimates even more uncertain;
  • the tendency of programs to try to satisfy all requirements at once, regardless of circumstances, stretching technological capabilities; and
  • the character of and changes in government oversight–and GAO flags the erosion of capability, in particular cost estimation and engineering capability, within government.

(One dynamic the GAO doesn’t mention is that identified by Luttwak: the increasing complexity of such systems.)  Such organisational and political behavioural dynamics are hardly restricted to the US space industry, of course–they’re evident in Australia as well.  As behavioural dynamics, they cannot be solved simply through restructures or efficiency drives.  Indeed, such ‘solutions’ are likely to exacerbate, not improve, problems.  

The GAO report has further points of interest  for Australia, given the commitment to reliance on the US space program in WP2009 (paragraph 6.20).

First, consolidation within the US space industry has generates monopolies, adding to costs.

Second, US space contractors, like government, are suffering from a shortage of skilled and experienced personnel in critical areas, increasing costs.

Third, the US space industrial base has not yielded the benefits of competition, nor generated the commercial demand, envisaged when the United States invested heavily in military space programs.  Consequently, the US Government is bearing the cost of maintaining the space industry as a strategic industry.

Overall, this suggests Australia will also bear the structural overheads of the US space industry.

Australia needs to make a decision about the implications of its reliance on space, including the US space industry, and determine a clear, well-thought through strategy to secure its interests in space–and such is not in evidence.  (I would note that Australia has a strategic interest in supporting the US space effort–but preferably one that is competitive, effective and at the forefront of technology.)

And that in turn means that the Government needs to have a clearer idea about the space capabilities it needs, and the technologies needed to support its interests and consequential capabilities.  A balance most likely will need to be struck between investing in research and innovation and in proving technology on the one hand, and implementing mature technologies in systems in the other.

Last, the government departments and agencies need to engage even more closely US defence space counterparts, along the policy-strategy-operations-capability-procurement-implementation spectrum.  Australia needs to develop (further) its own space capability, in terms of policy-makers, strategists, engineers, cost estimation, operations, deployment, maintenance and research.  The best way to understand a subject, of course, is to do it, and incorporate learning in a feedback loop.  

Short of developing its own industry, Australia needs to post more people–civilians and military, government and contractors–into US policy-making bodies, agencies and projects, so as to develop the capabilities, knowledge and influence that helps policy-makers make informed decisions.  That’s the sort of necessary enabling activity that will be hard to put in place when the Department has to find $20b to fund platforms.

In conclusion, returning to the state of the US military space industry, the GAO report notes,

‘There are pressures to deliver new, transformational capabilities, but problematic older satellite programs continue to cost more than expected, constrain investment dollars, pose risks of capability caps, and thus require more time and attention from senior leaders than well-performing efforts. Moreover, military space is at a critical juncture. While there are concerns about the United States losing its competitive edge in the development of space technology, there are critical capabilities that are at risk of falling behind their current level of service.’ (Chaplain 2009, p17)

References

Chaplain, C. (2009). Space Aquisitions: Government and Industry Partners Face Substantial Challenges in Developing New DOD Space Systems. Subcommittee on Strategic Forces, Committee on Armed Services.

Luttwak, E. N. (2007). “Breaking The Bank: Why Weapons Are So Expensive.” The American Interest.

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