GeoEye-1 image of the new NGA Campus East (NCE) at Ft. Belvoir, Virginia was taken on Dec. 7, 2010.
Kabul, Afghanistan, taken by GeoEye-1 on March 13, 2010.
Favorable U.S. Laws and Policies
Evolution of Satellite Imagery Industry
Long-Term Commitment of the U.S. Government to the Commercial Remote Sensing Industry
By Dennis Jones President The Jones Consulting Group, LLC Charleston, S.C.
Summertime in Washington, D.C., is normally a slow season. Most of official Washington takes vacation and offices are relatively quiet. Defense acquisition officials from the National Geospatial-Intelligence Agency (NGA) were busy, however, through most of the summer of 2010, reviewing at least two proposals from commercial remote sensing competitors DigitalGlobe and GeoEye for what is now known as the EnhancedView program.
EnhancedView – NGA’s effort to increase current imagery collection activities and recapitalize the future commercial imagery satellite architecture – is a projected ten-year effort worth up to $7.3 billion combined for both U.S. commercial imagery providers. This program, now NGA’s largest, is a watershed event for the commercial satellite imagery sector. Unprecedented in its scope, EnhancedView will have far-reaching effects both in the U.S. and abroad. The program, if executed for its full duration, could finally realize the policy aims of three presidential administrations to bolster the industry and ultimately cement its leadership position in the global earth observation marketplace.
NGA didn’t devise EnhancedView entirely on its own. The program decision was the culmination of over three years of U.S. Government deliberation and analysis. The often painstaking process included officials from NGA, the Department of Defense (DOD), the Office of the Director of National Intelligence (ODNI) and the National Reconnaissance Office (NRO). The goals of this effort were to shore up an aging imagery intelligence (IMINT) constellation and to provide redundancy and stability to an architecture that has had increasing demands placed on it by concurrent wars in Afghanistan and Iraq.
The way was paved in February 2009 when President Obama approved a concept commonly referred to as the “2+2” imagery architecture. According to numerous media reports, the U.S. Government would procure from industry two imagery satellites with classified capabilities and the equivalent of two commercial-grade imagery satellites.
The arrival at the 2+2 plan was by no means a straight or logical path. Two outside panels were commissioned – the NGA Director’s Advisory Group, chaired in 2007 by aerospace industry veteran Peter Marino, and one from the ODNI, chaired by former Under Secretary of Defense Paul Kaminski in 2008. The Marino Report undervalued the role commercial imagery could play in fulfilling future defense requirements and suggested alternative models such as a government-owned, commercially operated (GOCO) procurement. The U.S. Government also floated similar satellite concepts – most notably, BASIC, or Broad Area Satellite Imagery Collector.
These concepts and The Marino Report essentially proposed capabilities which could easily and more cheaply be met in the commercial market. They also directly contradicted existing presidential policy, namely President Bush’s National Security Presidential Directive-27 which directed departments and agencies to use commercial imagery to “maximum practical extent” and discouraged the government from competing directly with commercial industry. The Kaminski Panel provided incoming President Obama a fresh look at the IMINT architecture and validated a hybrid approach that would allow commercial imagery providers to supplement and augment the national architecture while the government proceeded with more exquisite systems for the DOD and the intelligence community.
While the commercial sector and financial markets have applauded the move, sustained Congressional support is uncertain, particularly with a recast U.S. Congress in 2011.
Despite significant and sustained investment by the Department of Defense (with ClearView and NextView), the government’s continued dalliance with such concepts as MidSAT and BASIC created an impression that its long-term commitment to presidential policy was soft and could even undermine the industry’s commercial viability.
NGA’s decision has also prompted protectionist criticism from European aerospace officials. Telespazio Chairman Guissepe Virgilio and Astrium Satellites CEO Evert Dudok charged in a November Space News article that the magnitude of the award would create a duopoly against which European providers could not compete. The NGA decision, they asserted, amounted to protectionism and would enable U.S. companies to undercut future market pricing.
The EnhancedView award gives U.S. providers a key advantage – a largely assured and stable revenue stream for the foreseeable future. The protectionist accusations, however, demonstrate a flawed understanding of what the program encompasses. Under EnhancedView, NGA will modestly increase the amount of commercial imagery it buys under the current service level agreements with the two companies, procure capacity on future satellites, augment the existing commercial ground infrastructure to meet government needs, and may procure advanced production services from both companies under an Indefinite Duration Indefinite Quantity arrangement. Each company provided NGA other architecture options, which if exercised and combined with the other program elements and if fully executed could reach the $7.3 billion value that is so often quoted. Even with EnhancedView, nothing is certain but death and taxes.
A sustained government program validates both U.S. companies’ financial conditions and capabilities going forward. Those capabilities are what the Europeans and others must compete against, rather than a certain contract.
The U.S. commercial imagery industry is financially viable for the long term. Karyn Hayes-Ryan, director, Commercial Imagery Data, Programs and Services, NGA, at a conference in Paris this fall, noted that financial solvency and the long-er term financial impact of the program were key decision criteria for the awards. During the protracted debate over the future of the IMINT architecture, U.S. Government officials expressed concerns that significant investments would be lost if either or both U.S. companies went bankrupt or went out of business altogether. Ample evidence exists that could guide the government in its decision making in that unlikely event.
However, the fiscal health of both companies has been demonstrated consistently and convincingly by strong annual revenue growth and increased global market share. The companies’ financial viability has also been validated by Wall Street. The value of both companies’ stocks have steadily increased over the past two years.
Government and Commercial Accommodation
Government needs – from tasking through dissemination – can be met without threatening commercial market opportunities. Because of the increasing terrorist threat, as well as growing concerns of cyber threats to space-based systems, the government has had a justifiable concern over the operational control as well as the system integrity of commercial imagery systems. NGA and the commercial industry have increasingly developed integrated collection, tasking and dissemination architectures, but commercial imagery’s inherent strength – that it is unclassified and shareable with allies and partners around the world – is also viewed as a vulnerability by some within the defense establishment. Under EnhancedView, the companies will augment their ground infrastructure and operate their systems in a manner that ensures that U.S. Government collection – as has been the practice for almost a decade – remains shielded from public view. These ground architecture upgrades will not preclude GeoEye or DigitalGlobe from continuing to conduct business commercially.
Many external factors influenced the decision to proceed with EnhancedView. The fact remains that improved current and future system performance capabilities provided the most compelling reason to proceed with a robust commercial option. GeoEye-1, a future GeoEye-2, Worldview-1, 2 and a future Worldview-3, can and will meet the demanding imagery geospatial requirements that the government has articulated across a range of performance parameters. Improved resolution, accuracy, collection rates, and agility are capabilities desired by defense and commercial customers globally. EnhancedView positions U.S. companies to lead in the competitive international market place.
This program was actually fifteen years in the making, if not longer. Successive presidential administrations have put their stamp on a commercial remote sensing policy. President Clinton enabled the industry; President Bush entrenched the industry in the U.S. Government’s architecture; and now with EnhancedView, President Obama’s administration has wisely expanded the industry’s opportunity to serve the U.S. Government at an unprecedented level, and also to serve commercial, defense and government entities globally. Despite significant and sustained investment by the Department of Defense (with ClearView and NextView), the government’s continued dalliance with such concepts as MidSAT and BASIC created an impression that its long-term commitment to presidential policy was soft and could even undermine the industry’s commercial viability. In an op-ed I wrote for Space News two years ago, I noted that policy pronouncements without associated resources were just poetry. With EnhancedView, the U.S. government and NGA have taken the long view and finally put the money where the mouth is.
“NRO Loses Decision Authority on BASIC Imaging Satellite Program,” Colin Clark, Space News, March 12, 2008.
“In Death of Spy Satellite Program, Lofty Plans and Unrealistic Bids,” Phillip Taubman, New York Times, November 11, 2007.
“DNI Blair Announces Plans for Next Generation Electro-Optical Satellites,” ODNI News Release No. 12-09, April 7, 2009.
“Independent Study of the Roles of Commercial Remote Sensing in the Future National System for Geospatial-Intelligence (NSG),” Peter Marino, National Geospatial-Intelligence Agency Advisory Group, July 16, 2007.
“EnhancedView Prompts Protectionism,” Space News, Nov. 1, 2010.