HOT TOPIC: Air Force makes bold modernization moves. Boeing, Northrop Grumman weigh whether to challenge Lockheed for GPS 3
 For those who have been waiting for the Air Force to shake up its space investment portfolio, the budget request for 2019 was as disruptive as can be expected from the military. Money was taken from legacy programs to fund next-generation systems. This is what many "new space" companies and commercial tech firms have been hoping for, but the Air Force can expect some pushback from the establishment.
Defense industry consultant Jim McAleese, of McAleese & Associates, called the space budget a major transition that "cannibalizes" space procurement to fund an emerging "disaggregation strategy." Most of the 2019 procurement budget of $2.5 billion funds satellite launches, not new satellites. McAleese: "Legacy spacecraft production are bill payers."
Most affected by the cannibalization is the SBIRS missile-warning constellation, made by Lockheed Martin. The program is being cut after six satellites, and it remains to be seen how the Air Force will redirect SBIRS dollars. Air Force Secretary Heather Wilson spoke about this last week at the Mitchell Institute. There is no desire to develop revolutionary, new technology, she said. The goal is to produce simpler satellites that can be built quickly, do the mission at less cost and create a more resilient network. SBIRS has become symbolic of the military's old way of doing business in space, with billion-dollar spacecraft that suddenly stand out as "juicy targets" for enemies.
Another priority in the 2019 budget is to start the development of a new GPS 3 satellite and select a manufacturer to produce 22 vehicles. The Air Force had hinted for a while that it wanted to re-compete the GPS 3 program and that current manufacturer Lockheed Martin should not take its role for granted. Among the potential challengers are Northrop Grumman and Boeing. Neither company had much to say about this when contacted by SpaceNews.
Northrop Grumman's statement: "We are evaluating the GPS 3 RFP." And a Boeing spokesman said the company "will assess the final request for proposal and decide our course of action.
A different procurement 'mindset'
Former Air Force executive in charge of acquisitions, William LaPlante, says the changes proposed in the budget are "wise moves." LaPlante is senior vice president and general manager of MITRE National Security Sector, a non-profit research firm that advises the Air Force.
With regard to satellites, the Air Force has hurt itself by making systems too complex and unnecessarily costly, LaPlante told SpaceNews. "You design a Swiss army knife in some case when all you need is a plastic spoon," he said. "The model has to change. You may have satellites that only last a year or two, do limited things. It's a totally different acquisition mindset."
Pentagon procurement expert Russell Rumbaugh says the Air Force is trying to walk a fine line, balancing a desire to move faster with programs but also avoid costly failures. "Everybody always wants to go fast," says Rumbaugh, a senior project leader at the Aerospace Corporation. "But the question is: 'Do you go faster by diligently pursuing a program, dotting all your I's, crossing all your T's before you get going? Or do you plunge ahead? We have a mixed record on that."
Congress has asked for dramatic changes in space acquisitions. "We absolutely are in a new era in space, and that's reflected in the National Defense Authorization Act," Rumbaugh says. "How that affects acquisition is something that they're still working through." | | Intelligence report: The threats in space are real
 Experts in the past have cast doubts on intelligence reports about the Chinese and Russians threatening U.S. space dominance. But the latest assessment from the Director of National Intelligence appears to provide stronger evidence that the dangers are real. The 2018 Worldwide Threat Assessment of the U.S. Intelligence Community says both Russia and China continue to pursue anti-satellite weapons knowing that, if successfully employed, could undermine U.S. military capabilities, analysts noted. "Russia and China aim to have nondestructive and destructive counter-space weapons available for use during a potential future conflict."
U.S. intelligence predicts that "destructive" Russian and Chinese anti-satellite weapons probably will reach "initial operational capability in the next few years." China's military is setting up specialized units and has begun "initial operational training with counter-space capabilities that it has been developing, such as ground-launched anti-satellite missiles."
Another concern is Russia and China launching "experimental" satellites for on-orbit activities that are not necessarily hostile but could help them advance their counter-space capabilities, the report said. "Some technologies with peaceful applications — such as satellite inspection, refueling and repair — can also be used against adversary spacecraft." | | IN OTHER NEWS ...
Pentagon sets aside big money for small launch
 The budget request for fiscal year 2019 establishes a "small launch" program with a dedicated funding line of $192.5 million over five years. "This is a new start," confirmed industry consultant Mike Tierney, of Jacques & Associates. He says this is good news for companies like Virgin Orbit and Stratolaunch have set up dedicated services for the national security market.
The Air Force says the small launch project complements the Evolved Expendable Launch Vehicle program under which United Launch Alliance and SpaceX conduct launches of larger payloads. The new effort is for "dedicated spacelift and rideshare services for developmental, demonstration and small operational space vehicles," according to budget documents. Previously, small launch funding resided in separate satellite program budgets. Having a consolidated budget line "allows the Air Force the flexibility to manage dynamic manifest requirements as new launch service providers emerge." The Air Force's small launch program would cover payloads up to 8,000 pounds. SpaceX's Falcon 9 rocket by comparison can carry 50,265 pounds to low-Earth orbit or 18,300 pounds to geostationary orbit.
ICYMI: Aerojet renegotiating AR1 engine deal with Air Force
 The future seems uncertain for Aerojet Rocketdyne's AR1 rocket engine. SpaceNews' Jeff Foust uncovered new details on the company's efforts to renegotiate a cost-sharing agreement with the Air Force Space and Missile Systems Center to develop the engine. "Aerojet Rocketdyne has approached the Air Force about reducing the industry cost share on the AR1 RPS OTA from 1/3 to 1/6," SMC said. "The Air Force has gained the necessary approvals to do so, if a mutually beneficial arrangement can be reached with Aerojet Rocketdyne. The Air Force and Aerojet Rocketdyne are still in discussions, but are working very hard to find closure on a restructured agreement."
SMC did not explain why Aerojet Rocketdyne sought the change in the agreement. Steve Warren, vice president and chief communications officer at Aerojet Rocketdyne, said the company has spent more than $110 million on the AR1, counting work done before receiving the Air Force award in 2016, and that the company had previously invested more than $200 million on key technologies incorporated into the engine.
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