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AIR UNIVERSITY

AIR COMMAND AND STAFF COLLEGE

Military Payloads Hosted on 

Commercial Satellites

How Can the Space and Missile Systems Center 

Increase the Number of Commercially Hosted 

Military Payload Contract Awards?

Peter A. Cunningham

Major, USAF

Wright Flyer Paper No. 53

Air University Press

Air Force Research Institute

Maxwell Air Force Base, Alabama
ii

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Published by Air University Press in December 2015

Disclaimer

Opinions, conclusions, and recommendations 

expressed or implied within are solely those of the 

author and do not necessarily represent the views of 

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Research Institute, Air University, the United States 

Air Force, the Department of Defense, or any other 

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distribution unlimited.

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iii

Contents

List of Tables v

Foreword vii 

About the Author ix 

Preface xi

Abstract xiii 

Introduction 1

Significance 2

Purpose of the Study 2

Background 3

Commercially Hosted Military Payloads Defined 3

Commercial Satellite Industry Acquisition Culture 4

Evaluation 8

Challenge: Commercial Satellite and Military

 Payload Alignment 10

Challenge: SMC as a Business Partner 11

Challenge: SMC Acquisition Culture 12

Challenge: Requirements Stability 13

Challenge: Government Program Managers Not 

 Empowered to Make Timely Decisions 14

Challenge: Spectrum Certifications Tied to 

 Financing 14

Challenge: The Military Industrial Complex 15

Summary of Challenges 17

Methodology 17

Analysis of Solutions 17

CHMP Solutions in Work at SMC 18

Actively Leverage Education with Industry Program 19

Air Force Instruction for Commercially Hosted

 Military Payloads 20
Conclusion 23

Abbreviations 27

Bibliography 29
v

Tables

1 Four key partners expected to be involved in

a CHMP contract 3

2 Examples of commercially hosted payloads 9

vii

Foreword

It is my great pleasure to present another issue of The Wright Flyer 

Papers. Through this series, Air Command and Staff College presents a 

sampling of exemplary research produced by our residence and distance-learning students. This series has long showcased the kind of visionary thinking that drove the aspirations and activities of the earliest 

aviation pioneers. This year’s selection of essays admirably extends that 

tradition. As the series title indicates, these papers aim to present cuttingedge, actionable knowledge— research that addresses some of the most 

complex security and defense challenges facing us today.

Recently,The Wright Flyer Papers transitioned to an exclusively electronic publication format. It is our hope that our migration from print 

editions to an electronic-only format will fire even greater intellectual 

debate among Airmen and fellow members of the profession of arms as 

the series reaches a growing global audience. By publishing these papers 

via the Air University Press website, ACSC hopes not only to reach 

more readers, but also to support Air Force–wide efforts to conserve 

resources. Inthis spirit, we invite you to peruse past and current issues 

of The Wright Flyer Papers at http://aupress.maxwell.af.mil/papers_all

.asp?cat=wright.

Thank you for supporting The Wright Flyer Papers and our efforts to 

disseminate outstanding ACSC student research for the benefit of our 

Air Force and war fighters everywhere. We trust that what follows will 

stimulate thinking, invite debate, and further encourage today’s air, 

space, and cyber war fighters in their continuing search for innovative 

and improved ways to defend our nation and way of life.

THOMAS H. DEALE

Brigadier General, USAF

Commandant

ix

About the Author

Maj Peter A. Cunningham enlisted in the US Air Force in 1994 and 

served at Royal Air Force Lakenheath, England, and as a crew chief on 

F-15 and F-22 aircraft at the Flight Test Center at Edwards AFB, California. 

He earned his commission in June 2002 after graduating from the Officer 

Training School at Maxwell AFB, Alabama, and was stationed at Dover 

AFB, Delaware, where he held positions as an aircraft maintenance officer 

and maintenance group quality assurance officer on C-5 Galaxy aircraft. 

Major Cunningham was then assigned to Hanscom AFB, Massachusetts, 

as a program manager and held a variety of intelligence, surveillance, and 

reconnaissance (ISR) program management positions. He earned the 

2009 Hanscom AFB O’Neill Program Manager of the Year award in the 

major and below category.

In 2011 Major Cunningham was reassigned to Los Angeles AFB, 

California, as a program manager in the military satellite communications (MILSATCOM) directorate, where he was charged with standing 

up the Special Concepts Branch of MILSATCOM’s Advanced Concepts 

Division. He was then selected to lead the space segment of the Advanced 

Development Division’s Rapid Acquisition Branch.

Major Cunningham directly supported a no-notice generation of F-15E 

strike aircraft for missions over Bosnia-Herzegovina in Operation Deny 

Flight and served at Incirlik AB, Turkey, in support of Operation Provide 

Comfort. He led active, Guard, and Reserve personnel at Dover AFB in 

the initial deployment preparations and ongoing logistical support for 

Operation Iraqi Freedom. He also led the design, test, and deployment to 

Afghanistan of the Combatant Commanders Urgent Operational Need 

Gorgon Stare ISR Exploitation Cell in support of Operation Enduring 

Freedom.

Major Cunningham has a bachelor of science degree in professional 

aeronautics from Embry Riddle Aeronautical University and a master of 

science degree in military operational art and science from Air Command and Staff College. He also holds a level-three certification in program management from the Defense Acquisition University.

xi

Preface

In many instances, what initially appears to be a common-sense solution with synergies to be gleaned by all is often fraught with nuances and 

complexities which make the implementation of solutions perceived as 

“common sense” difficult. I have found this to be the case for commercially hosted military payloads (CHMP). That said, the current strong 

senior leader advocacy for CHMP coupled with the looming budget crisis 

might yield a perfect storm where the cultural and policy complexities 

that impede the implementation of CHMPs could be overcome. However, these complexities will not be overcome without a deliberate effort 

to ensure CHMPs are considered as an option by the acquisition professionals responsible for answering space-based requirements.

I owe many thanks to Joseph Vanderpoorten, the most passionate advocate for doing right by the war fighter and the taxpayer I have encountered in my 18 plus years of service. Mr. Vanderpoorten introduced me to 

the concept of commercially hosted military payloads and allowed me to 

present some of my thoughts in his place on a question and answer panel 

at the American Institute for Aeronautics and Astronautics Conference 

in Pasadena, California, in September 2012. Mr. Vanderpoorten, thanks 

for providing me with opportunities to interact with the commercial satellite industry’s leading thinkers on CHMPs. I would also like to thank Dr. 

Fred Stone for his patience and thoughtful guidance during this thesiswriting process.

Finally, to my wife and children, I could not have finished this program without your support and your willing sacrifice of approximately 

two years of weekends. Thank you for your understanding. I love you.

xiii

Abstract

Though Pres. Barack Obama and the Air Force Space Command’s 

(AFSPC) top general officers have advocated for the use of commercially 

hosted military payloads (CHMP), only one CHMP contract has been 

awarded by the Air Force. This paper answers the question, how can AFSPC 

and the Space and Missile Systems Center (SMC) increase the number of 

CHMP contract awards? Using a problem/solution framework, I examine 

the acquisition cultural and policy challenges that impede CHMP solutions and choose a solution which could potentially increase the number 

of CHMP contract awards. I analyze solutions such as awarding an indefinite-delivery/indefinite-quantity hosted payload contract vehicle by 

SMC, leveraging the Education with Industry program, and issuing an 

Air Force instruction on CHMPs. The instruction would include an 

addendum to Directive-Type Memorandum 09-025, Space Systems Acquisition Policy.

1

Introduction

The Space and Missile Systems Center (SMC), the acquisition arm for 

Air Force Space Command (AFSPC), is tasked to deliver “resilient and 

affordable space capabilities.”1

 During a 17 January 2012 interview, AFSPC 

commander Gen William Shelton outlined a fundamental shift in how 

AFSPC/SMC should accomplish its mission: “We are changing direction. 

In terms of the overall capability it is much the same . . . but how we 

achieve that capability is going to be fundamentally different.”2

One of the “different” approaches General Shelton and SMC would 

like to leverage is commercially hosted military payloads (CHMP). 

CHMPs significantly depart from SMC’s traditional use of free-flyer solutions to answer payload requirements. A free-flyer procurement approach assumes the purchaser pays for all costs associated with the build, 

launch, integration, and operations of the satellite and its payload. A 

CHMP utilizes a commercial satellite’s available size, weight, and power 

(SWaP) to accommodate a military payload. When the military payload 

requirements and commercial host characteristics match, a CHMP solution can be a cost-saving alternative when compared to a free-flyer solution with the same level of capability.3

 This is due to the satellite and 

launch costs being apportioned between the commercial host and the 

military.

The following analogy highlights the differences between CHMPs and 

free flyers. If an individual at the Los Angeles Airport hires a taxi to transport him or her with luggage (payload) to Anaheim, it would likely cost 

$150. This is similar to a free-flyer solution. However, if the individual 

had enough space for an additional person with luggage in the taxi, the 

cost of the taxi could be shared. A shared taxi is comparable to a CHMP 

approach.

The Air Force contracted its first and only CHMP in 2008, and the 

payload was launched on 21 September 2011. The CHMP was a technology 

development and risk reduction demonstration for a wide field-of-view 

infrared sensor, known as the commercially hosted infrared payload 

(CHIRP).4

 The Department of Space Commerce described the CHIRP 

program as costing $400 million less and being fielded three to 10 years 

faster than a traditional free-flyer approach.5

 The validity of the cost savings 

can be debated, as the cost and schedule efficiencies were derived from a 

direct comparison between the costs of CHIRP and the space-based infrared system (SBIRS) satellite.

CHIRP is an on-orbit demonstration capability. Its overall capabilities 

are not commensurate with the SBIRS’s four mission areas of “missile 

warning, missile defense, technical intelligence, and battle space aware-
2

ness.”6 Despite what seems to be an unfair cost savings comparison by the 

Department of Space Commerce, CHIRP demonstrated that SMC could 

use a CHMP solution and glean a reduction in both cost and schedule 

when compared to a free flyer with the same capacity. Given the potential 

of CHMPs demonstrated through CHIRP, Lt Gen Ellen Pawlikowski, 

SMC commander and program executive officer for space, would like to 

continue to make use of available space on commercial satellites to host 

military payloads.7

Significance

With the Budget Control Act reducing discretionary spending by $1 

trillion over 10 years, and Department of Defense (DOD) spending lowered 

by $487 billion, the emphasis to leverage cost-saving measures like 

CHMPs has received considerable attention.8

 While SMC could glean a 

potential cost savings when a CHMP is deemed an appropriate solution, 

CHMPs could also offer a measure of resiliency. The payloads could be 

hosted on multiple domestic or international commercial satellites, potentially complicating an adversary’s plans for attack.9

 Yet despite CHMPs 

potential to add resiliency while decreasing cost and schedule, not one 

CHMP contract has been awarded by the Air Force since CHIRP in July 

of 2008.

Purpose of the Study

This research reviews acquisition complexities that may have contributed to SMC’s lack of a CHMP award since its first and only one in 2008. 

I use a problem/solution framework, analyze the steps SMC has taken to 

remedy these problems, and recommend additional solutions. It is not in 

the scope of this paper to discuss the technical or engineering aspects of 

CHMPs, nor validate or champion the use of CHMPs over other courses 

of action. This research proposes recommendations which could increase 

the use of CHMPs should the acquisition community determine a CHMP 

is the optimum solution. I provide a common understanding of commercial satellite industry partners likely to be in a CHMP arrangement. Next, 

I review commercial satellite industry business practices and examples 

of commercially hosted payloads and examine challenges associated 

with CHMP procurement. Finally, I discuss steps SMC has taken to minimize these challenges and propose additional recommendations, which 

could result in an increased number of CHMP awards.
3

Background

It is helpful to understand the characteristics of the commercial satellite industry and CHMPs. This section reviews the key participants likely 

to be involved in a CHMP contract, provides insight on how the commercial satellite industry manages procurements, and discusses how 

these practices could benefit SMC. Examples of previous payloads hosted 

on commercial satellites are also provided.

Commercially Hosted Military Payloads Defined

A 2011 Government Accountability Office (GAO) report on telecommunications in the fixed satellite services industry provides the following 

definition of hosted payloads: “A hosted payload allows users, such as the 

government, to add transponders or other equipment to a commercial 

satellite already scheduled for launch, reducing the time and cost needed 

to meet demand for satellite capacity . . . assuming resources for hosted 

payloads can be aligned with satellite manufacturing and launch schedules.”10

Table 1 provides a quick reference of the four key partners likely to be 

involved when a CHMP contract is pursued. Each of the partner’s roles is 

also described.

Table 1. Four key partners expected to be involved in a CHMP contract

Role Examples

Commercial satellite owner-operator Intelsat, ViaSat, Inmarsat, SES, and 

others

Commercial satellite manufacturer Space Systems Loral, Orbital, Boeing, 

and others 

Government customer Space and Missile Systems Center, and 

others

Military payload manufacturer Northrop, SAIC, labs, and others

Adapted from Joseph Simonds, George Sullivan, Jie Zhu Jacquot, and Charles Kersten, “Lessons Learned 

from Hosting an Infrared Payload on a Communications Satellite” (paper presented at the Aerospace 

Conference, IEEE [Institute of Electrical and Electronics Engineers], Big Sky, Montana, 2010), 1–11.

The commercial satellite owner-operator evaluates whether a business 

case exists for satellite services in a geographical area. If a case can be 

made, the owner-operator purchases a satellite and manages the services.11 Commercial owner-operators, such as Intelsat, Viasat, Inmarsat, 

or SES, provide services to numerous clients ranging from financial institutions and television networks to the US military. In fact, through satellite leasing arrangements, commercial satellite owner-operators provide 

nearly 90 percent of the military satellite communications used in Central 
4

Command.12 The commercial satellite owner-operator is arguably the 

most important partner in securing a CHMP arrangement. As the satellite’s owner, the company must decide if any risk associated with taking 

on a military payload is worth the financial reward. Commercial satellite 

owner-operators advocate for CHMPs.13

The satellite manufacturer is the company the owner-operator hires to 

build its satellite. The owner-operator consults the satellite manufacturer 

to ensure that hosting a military payload is technically feasible. The satellite manufacturer, such as Orbital, Space Systems Loral, or Boeing, is responsible for integration of the military payload along with the owneroperator’s primary mission payload on the satellite.

SMC chooses the manufacturer to design the military payload to meet 

specific government requirements. Laboratories, colleges, federally 

funded research development centers (FFRDC), and a large variety of 

contractors, including the satellite manufacturers previously mentioned, 

can manufacture payloads. Due to the often unique requirements inherent 

in many military payloads, SMC would likely have the military payload 

manufactured by an entity other than the manufacturer that built the 

commercial satellite. This is how the only CHMP contracted by SMC’s 

CHIRP was structured. Science Applications International Corporation

(SAIC) built the payload, an advanced infrared wide-field-of-view missile warning sensor; Orbital constructed the satellite; and SES Americom 

was the owner-operator.14 However, depending on the military payload 

requirements, it could be desirable to have the commercial satellite manufacturer build the government payload. The Australian Defence Force 

(ADF) provided the payload requirements to the commercial owneroperator Intelsat, who awarded the satellite-manufacturing contract to 

Boeing. Thus, Boeing was responsible for both Intelsat’s and the ADF’s 

requirement.15

Commercial Satellite Industry Acquisition Culture

Comprehending the commercial satellite industry culture is necessary 

to better understand the issues addressed on SMC’s acquisition culture in 

the challenges section. I examine insurance costs, the importance of 

proven components, contract methods, documentation, decisions, and 

schedules.

Motivation. It is no secret that the commercial satellite industry exists 

only to make a profit. If operating commercial satellites becomes unprofitable, satellite owner-operators will migrate away from selling communication bandwidth on satellites, forcing the satellite manufacturer to 

produce a different product. When a commercial satellite owner-operator 
5

determines that it can make a profit by providing satellite communication services over a given region, it desires to have a reliable and capable 

system on orbit, as fast as possible at the lowest cost to quickly stake its 

claim in that region and begin earning revenue.

These desires motivate satellite manufacturers to leverage lean manufacturing principles to minimize the “non–value added” processes.16

These processes make the satellite manufacturer more competitive by reducing the number of unnecessary steps that do not contribute to cost 

reductions or improved satellite performance. Satellite manufacturers 

develop efficient tests, supplier management philosophies, and common 

processes to accelerate the manufacturing cycle, which leads to a faster 

satellite delivery.17 Quick delivery and a desire to keep costs low to maximize profit appear to be key motivators of the commercial satellite industry. The next section illustrates how those desires are translated into the 

commercial satellite industry’s unique acquisition culture.

Owner-Operator Insurance Costs and Heritage Components. Satellite insurance rates can have a significant effect on whom the commercial owner-operator chooses to build its satellite and how the satellite 

manufacturer constructs it. Andrea Maléter, the technical director of the 

Space and Telecommunications Division of Futron Corporation, a decision-management consulting firm, provided the following analysis regarding the importance of insurance costs for satellite owner-operators 

and manufacturers. Ms. Maléter determined that insurance policies covering a commercial satellite launch through the first year of in-orbit operations averaged between 17 and 22 percent of the cost of the insured 

satellite; some markets fetched premiums as high as 30 percent.18 These 

insurance costs can run up to $50 million. An additional 12 years of onorbit operations can result in a combined total of $100 million in insurance premiums.19 She states that 60 to 70 percent of the insurance cost is 

based on the choice of satellite, while the launch vehicle and on-orbit 

operations make up the remainder of the calculation.20

The need to keep insurance costs low plays a significant role in the 

acquisition culture of the commercial satellite industry. To reduce risk of 

on-orbit malfunctions and subsequently drive down insurance costs, 

commercial satellite manufacturers attempt to use as many heritage components as the owner-operator’s requirements allow.21 The term heritage

refers to a component’s successful use in orbit on previous satellites. Use 

of heritage components produces synergistic effects as manufacturers 

can develop processes which can be reused, reducing the number of contract deliverables an owner-operator would want refusal rights on. This 

results in increased predictability of expenses with the added benefit of a 
6

reduction in insurance costs. All of these make the satellite manufacturer 

more competitive in terms of cost and performance.

Contract Deliverables and Design Reviews. The satellite owneroperator reviews the contract deliverable documents to ensure the satellite will meet the demands of the mission and to confirm that the manufacturing process proceeds as planned. Utilization of heritage components 

decreases the number of contract deliverables required for review. Many 

complex developmental satellite program contract deliverables can number 

over 120, with many of these deliverables requiring SMC approval.22

These deliverables can cause delays, as the owner-operator must wait for 

customer approval. However, due to the commercial satellite manufacturer’s utilization of as many heritage components as possible, the deliverables required for review by the commercial owner-operator are reduced. Typical commercial satellite program deliverables number under 

40, with approximately 14 requiring customer approval.23

The combination of heritage components and reduced deliverables 

leads to streamlined design reviews. The commercial satellite manufacturer usually hosts the commercial owner-operator for a preliminary 

design review (PDR) and a critical design review (CDR). A PDR—the 

commercial owner-operator’s opportunity to review the preliminary 

satellite design, raise concerns, and discuss needed modifications—is 

typically held around six months after a contract is signed. After the 

PDR action items are closed and a way forward is finalized, a CDR is 

held. The CDR is a “last chance” to review the design before making 

irrevocable commitments.

Four members (including the author of this paper) of the Military Satellite Communications Directorate (MILSATCOM) attended a commercial satellite PDR as guests of Space Systems Loral (the commercial 

owner-operator’s affiliation cannot be disclosed). Three observations on 

how the PDR was conducted were noteworthy to the MILSATCOM 

members in attendance. First was the small number of representatives 

from the commercial owner-operator. The decision for the commercial 

owner-operator to have just three representatives and one trainee attend 

the PDR was curious, given the large investment made. Second, while the 

commercial satellite manufacturer expertly presented the material, the 

mastery the commercial owner-operator representatives had of the material 

was impressive. Finally, the meetings progressed quickly, and few concerns were aired. The event was completed in less than a day and a half. 

The commercial PDR contrasted starkly to previous government PDRs 

attended by the MILSATCOM members present. It is not unheard of for 

20 or more members of the government to attend a PDR. Government 
7

PDRs often last an entire week and are filled with questions about the 

contractor’s design and recommendations for significant alterations.

After the PDR, MILSATCOM members questioned representatives 

from both the commercial satellite manufacturer and commercial owneroperator on how the PDR could be completed so efficiently. The commercial owner-operator explained how his or her requirements are stable 

and the majority of the potentially contentious design issues are typically 

resolved prior to contract award.24 This makes the PDR a true review, 

rather than a design concept which must be vetted. The commercial satellite manufacturer credited the importance of a close relationship with 

the commercial owner-operator. One of the commercial owner-operator’s 

engineers worked at the Space Systems Loral factory and enjoyed complete access to monitor any phase of the satellite’s production. Stable 

requirements at contract award and a close relationship between the 

commercial owner-operator and satellite manufacturer allow not only a 

predictable design review, but also a less complex brand of contract to 

take place.

Firm Fixed Price. The Defense Contract Management Agency states 

that a firm-fixed-price contract is used when “a fair and reasonable price 

can be established at the outset.”25 This means that a product remains at 

the negotiated costs regardless of the final cost to the manufacturer as 

long as the requirements are not altered from the original agreement. The 

familiarity with the product described in the previous sections allows 

commercial satellite manufacturers to build satellites for commercial 

owner-operators on firm-fixed-price contracts.

Individuals unfamiliar with acquisition may assume a firm-fixedprice contract is the only logical option to conduct business. However, for 

many highly developmental efforts or with unstable requirements, costplus contracts are standard. Cost-plus contracts “are used when there are 

enough uncertainties involved in contract performance to preclude using 

a fixed price contract.”26 Requirements that involve significant development or are unstable can result in unpredictable costs and schedules. 

Neither of these uncertainties is compatible with the commercial satellite 

industry’s motivation for quick delivery of the satellite and low costs. A 

firm-fixed-price contract can help commercial owner-operators determine if the purchase of a satellite to operate in a given location would 

provide an adequate return on investment.

Fast Schedules, Quick Decisions. Commercial satellite production 

schedules can vary depending on the size and capabilities of the satellite. 

Typically, commercial satellite manufacturers complete the entire process 

(from contract award to launch) in just 24 to 32 months.27 These timelines are achieved in large part because the commercial owner-operator’s 
8

requirements are firm when the contract is awarded to the satellite manufacturer. Tim Deaver, a noted expert on CHMPs and SES Americom’s 

program manager on SMC’s CHIRP, provided an additional rationale for 

the ability to achieve that timeline. He explained how commercial industry 

empowers its program managers to make timely decisions. The program 

managers are the decision authority for most issues; issues discussed during 

PDRs and CDRs are closed out at those events.28 If additional information 

is required to make an informed decision, those cases are typically closed 

within a week.29

The empowerment of the commercial owner-operator’s program 

managers and embedding his or her engineers at the satellite manufacturer’s facility demonstrate the premium placed on schedule. The commercial satellite industry’s culture of empowered program managers is a 

critical component of the acquisition culture, which allows for a firmfixed-price contract environment as delays for routine decisions increase cost.

Evaluation

Since SMC has awarded only one CHMP, it could be reasoned that few 

other organizations have leveraged commercial hosting of payloads. Perhaps hosting a payload on commercial satellites is too technically complex or there are not enough opportunities. Yet table 2 illustrates that 

numerous commercially hosted payload solutions have been implemented by a wide range of entities, foreign and domestic, private and 

government, from the National Aeronautics and Space Administration 

(NASA) to the ADF. There also appear to be many opportunities to find 

suitable commercial hosts for military payloads. General Pawlikowski 

stated that there are approximately 80 commercial satellites forecasted for 

launch over the next five years. “You’ve got a lot of satellites up there and 

I sure would like to hitch a ride,” she said.30
9

Table 2. Examples of commercially hosted payloads

Hosted Payload 

Name Payload Capability

OwnerOperator 

Satellite

Launched

SXI Solar X-ray Imager for NASA GEOS L & M 2000/01

UHF, X, Ka 

Comm

UHF, X, Ka-band Comm 

for Australian Defence 

Forces

Optus-C1 2003

Nav/Aviation 

Comm

Japan Global Positioning 

System (GPS) augmentation and air traffic control 

communications

MTSAT-1/1R 2005

JAMI Japan meteorological

imager (visible & infrared) MTSAT-1/1R 2005

X-band Comm NATO configured X-band 

for Spain XTAR-EUR 2005

IRMA

In-orbit reconfigurable

multibeam antenna, 

X-band

Spainsat 2006

WAAS

Wide area augmentation 

system, Federal Aviation 

Administration (FAA) 

augmentation to GPS for 

air safety

Galaxy 15, Anik 

F1R, & Inmarsat 

4F3

2007 x2 

/09

CCD Camera Charge coupled device 

(CCD) visual cameras

Echostar-XI & 

ICO-G1

2008 x2

NAISa

US Coast Guard national 

automatic identification 

system

Orbcomm 2008

IRIS Cisco Internet router in 

space

Intelsat-14 2009

Ka-Band Comm Canadian Ka-band

hosted payload ViaSat-1 2011

CHIRPb USAF infrared missile 

warning payload SES-2 2011

ADF UHFc Australian Defence Force 

UHF payload Intelsat-22 2012

X-Band Comm Commercial X-band 

payload Canadian military Anik-G1 2012

EGNOS European GPS navigation

overlay system SES Sirius-5 2012

LCRDd NASA laser comm relay 

demonstration

To Be 

Determined ~2016

Adapted from Space Systems Loral, “Hosted & Dispensed Payloads Fact Sheet” (Palo Alto, CA: Space 

Systems Loral, December 2013), ssloral.com/downloads/payload/hosted_payload_fact_sheet.pdf.

a

“Emerging Threats Ship-Tracking Satellite Launched,” UPI.com, 21 June 2008, accessed 29 January 2013, http://

www.upi.com/Emerging_Threats/2008/06/21/Ship-tracking-satellite-launched/UPI-17501214032415/.

b

Robert S. Dudney, “Game Changers in Space,” Air Force Magazine 95, no. 10 (October 2012): 49–53, 

accessed 29 January 2013, http://www.airforce-magazine.com/MagazineArchive/Pages/2012/October%20

2012/1012space.aspx.

c

“IS-22 in the News,” Intelsat, 12 April 2012, accessed 29 January 2013, http://www.intelsat.com/network

/satellite/intelsat22/index.asp.

d

National Aeronautics and Space Administration, “LCRD,” Goddard Flight Research Center, accessed 30 

January 2013, http://esc.gsfc.nasa.gov/267/LCRD.html.
10

If evenly distributed, 80 satellites over five years equates to 16 potential CHMP opportunities a year. How can SMC take advantage of these 

CHMP opportunities? Before this question can be answered, the challenges which have impeded SMC from increasing the number of CHMP 

contract awards must be understood. First the difficulties in aligning 

military payload requirements with a commercial host will be examined.

Challenge: Commercial Satellite and Military Payload Alignment

Dr. Jared Fortune, an Aerospace Corporation cost analyst and a University of Southern California systems engineering professor, spent a year 

studying CHMPs for MILSATCOM. Dr. Fortune interacted with three 

different commercial satellite manufacturers and four commercial satellite owner-operators. These interactions provided an understanding of 

the numerous requirements which must align for a commercial satellite 

to host a military payload. He explained a variety of factors which must 

be considered before a commercial satellite can be deemed an appropriate fit for a CHMP. First, the commercial satellite orbit must match the 

specific needs for the government payload requirement. The government 

payload may require a geosynchronous Earth orbit (GEO), low Earth orbit (LEO), medium Earth orbit (MEO), or another type of orbit. These 

orbit requirements differ between the needs of the various military payloads. An Air Force Magazine article details how the Air Force’s 11 satellite programs reside in multiple orbits: six are in GEO, one—the GPS—is 

in MEO, and four reside in LEO.31 The commercial owner-operator’s satellite orbit is dependent on its mission as well.

Beyond the type of orbit, the government requirements for a specific 

orbital slot must also align with the commercial satellite. Orbital slot determination dictates where the payload will have coverage. Some military 

payloads may be open to a wider range of potential orbital slots. However, more often than not a military payload must be within a specific 

orbital range to accomplish the mission.32 If the orbital slot required by 

the military does not align with the commercial owner-operator’s needs 

for its primary mission, this eliminates a potential commercial candidate. 

The SWaP needs of the military payload must be equal to or less than the 

SWaP available on the commercial host.33 If the military payload is too 

large, draws too much power, or displaces too much heat, potential hosts 

are eliminated. Finally, if all the previously mentioned items align, a commercial owner-operator must be willing to endure the military as a business partner. If the owner-operator believes hosting a military payload 

could undermine current or future revenue bearing potential, it could 

decline hosting the military payload.
11

These and other factors, such as information assurance/security concerns, led Dr. Fortune to postulate that only 15 percent of the scheduled 

commercial satellite launches would likely align with an SMC requirement.34 If the approximately 80 projected commercial launches were 

spread evenly over the next five years and Dr. Fortune’s 15 percent 

matching factor was applied, this equates to approximately 2.5 feasible 

CHMP opportunities a year for SMC. These opportunities have a high 

probability of matching the needs of a military payload; SMC could take 

advantage of these prospects. However, when one understands the challenges involved with military payload and commercial host alignment, 

the fact that SMC has awarded only one CHMP contract becomes more 

understandable.

Challenge: SMC as a Business Partner

With its current annual budget at approximately $10 billion, SMC 

would be an attractive partner to the commercial satellite industry.35 Despite the allure of SMC’s large budget and industry’s desire to generate as 

much revenue as possible from the available space on its satellites, the 

decision to host a military payload must be weighed carefully against the 

potential ramifications. The possible bureaucratic ramifications were evident in a 26 September 2012 memorandum, “Guidance for Obtaining 

Military SATCOM Services from a Commercial Provider via Hosted 

Payloads Using Military Spectrum,” sent from Maj Gen Robert Wheeler, 

USAF deputy chief information officer for C4 and information infrastructure capabilities.36 The memorandum attempted to ensure that a 

CHMP investment by the government would be protected from potential 

future business transactions made by a commercial owner-operator. 

These transactions could relocate a host satellite and potentially render 

the CHMP useless. The language in the memorandum calls for the government to exercise considerable control over the commercial satellite, 

with recommendations for right of first refusal clauses to be inserted into 

the terms and conditions of a CHMP contract.

The clauses recommended in the memorandum seem like smart business from a government perspective, but the commercial satellite industry viewed the guidance as restrictive and lacking its perspective.37 The 

memorandum illustrates what the commercial industry must be cautious 

of before entering into an agreement with the government. The decision 

to relinquish control over future business opportunities may not come 

easy for the commercial owner-operator, even if it means an increase in 

near-term revenues.
12

The relocation of a commercial satellite to a market with increased 

demands could yield a significant return on investment for the commercial owner-operator. The near-term revenues gained from the hosted 

military payload could be less lucrative than the future profit which could 

be gained through the relocation of the commercial satellite. Therefore 

the owner-operator must carefully consider the degree of control he or 

she grants the government over the satellite in any CHMP agreement. 

Likewise, the government should carefully consider the degree of control 

it requires and how much it is willing to pay for it. The risks of the owneroperator relocating the satellite must be carefully weighed against the 

need to operate the CHMP. Dictating blanket contracting language for all 

CHMPs may provide comfort to senior government officials, but it represents another considerable challenge for award of CHMPs and could increase the cost.

Challenge: SMC Acquisition Culture

Thomas Taverney’s article, which reviewed the complexities of a traditional SMC satellite acquisition program, highlights a process that has 

become an acquisition culture at SMC and likely impedes the number of 

CHMP contracts awarded.38 Taverney, a former AFSPC vice commander, explained the vicious circle of space acquisition; over the years 

the Air Force attempted to minimize the number of satellites it purchased, and in doing so forced numerous requirements to be piled onto 

single systems.39 The complexity of these systems drove up costs, resulted 

in unstable requirements, protracted schedules, and reduced the number 

of systems that could be purchased.40

When the number of systems produced goes down, the risk tolerance for failure becomes very low. Low risk tolerance drives a culture of 

intense oversight and increases the number of contract deliverables and 

internal Air Force reviews, which in turn drives an increase in both cost 

and schedule. A May 2011 GAO report on space acquisition seems to 

back this perspective. “Over the past two decades, DOD has had difficulties with nearly every space acquisition program, with years of cost and 

schedule growth, technical and design problems, and oversight and management weaknesses,” the report noted.41

SMC has contracted complex efforts like the advanced extremely high 

frequency system, the space-based infrared system, and the subsequently 

canceled transformational satellite system. During this time, SMC has 

become accustomed to the processes Taverney described. Herein lies 

perhaps the most insidious challenge for SMC to overcome when award-
13

ing CHMPs—the ability to forego its tendency to design complex solutions with numerous formal oversight requirements and adopt simplified 

solutions that leverage the commercial satellite industry efficiencies of 

fixed price and fast schedules.

Challenge: Requirements Stability

For many efforts SMC uses a spiral development strategy where the 

final requirements are not known at the start of the program but are refined through experimentation.42 This is opposite from the commercial 

acquisition approach. As mentioned in the section on commercial satellite industry culture, when a commercial owner-operator enters into an 

agreement with a commercial satellite manufacturer, the requirements 

are well understood at the award of the contract. Stable requirements allow commercial manufacturers to provide an accurate estimate for the cost 

and schedule of the satellite build, which permits a firm-fixed-price contract.

According to the aforementioned GAO report, cost predictability and 

timeliness are two characteristics Air Force satellite programs have not 

been able to harness.43 Taverney’s article on the Air Force space acquisition system revealed that requirements instability is one of the key problems in space acquisition.44 Once again, Taverney’s concern over unstable 

requirements is backed by an earlier June 2003 GAO report.45 The report 

states DOD satellite programs take longer to develop and cost more “because performance requirements were not adequately defined at the beginning of the program or were changed significantly once the program 

had already begun.”46

In a CHMP scenario, unstable requirements equate to delays in the 

military payload’s readiness to be hosted or necessitate alterations to the 

owner-operator’s satellite configuration to accommodate the military 

payload, causing the government to incur large fines for altering a fixed 

price contract. A CHIRP lessons-learned essay submitted by SMC CHIRP 

contracting officers described how a change in the launch date or alterations to the owner-operator’s space vehicle resulted in fines being incurred 

by SMC and could have resulted in termination of the agreement to host 

CHIRP.47 Given the history of requirement instability issues spelled out 

by the GAO and the premium the commercial satellite industry places on 

schedule, SMC must be able to lock down its payload requirements if it 

seeks to leverage a CHMP solution.
14

Challenge: Government Program Managers Not Empowered to Make 

Timely Decisions

In the section on the commercial satellite industry acquisition culture, 

I discussed the importance of schedule and how commercial program 

managers are empowered to make timely decisions. Unfortunately, the 

opposite is often the case for the government. While the program management mantra of cost, schedule, and performance is often recited, 

schedule often takes a back seat to the risk-averse culture of not being 

qualified or empowered to make a decision. It is common to see months 

of a schedule wasted while decisions get pushed up the chain of command for review. A well-informed program manager would have made 

these decisions on the spot in the commercial sector.

Deaver, who served as an Air Force lieutenant colonel prior to working for SES Americom, explained that Air Force program managers are 

trained and experienced acquisition personnel, but not empowered, 

trained, and experienced engineers. Therefore, the program managers 

rely upon technical expertise from FFRDC personnel, which comes with 

its own reporting structure.48 The differing cultural mind-sets were explained with an experience he had as the SES Americom program manager for SMC’s CHIRP program. A ground current loss was discovered 

during a thermal vacuum test, which would significantly impact cost and 

schedule if delayed, but on-site engineers assessed that the issue could be 

corrected after the test with little to no risk.49 However, the Air Force 

program manager was not authorized to make the decision to proceed. 

The program manager’s FFRDC technical representative had concerns 

and raised those concerns through the chain of command. The division 

chief decided that the executive director of SMC (a two-star general officer equivalent) was required to make the decision, but would not be 

available for the next few days.50

The Air Force program manager likely did what he or she thought was 

best for the Air Force. However, the choice to wait and run the decision 

higher up the chain points out SMC’s cost plus contracting and low risk 

mind-set. In a cost plus situation, the contractor can simply delay the test 

and bill the government while it waits for a decision; the contractor cannot remain idle while the government makes up its mind in a firm-fixedprice commercial satellite environment.

Challenge: Spectrum Certifications Tied to Financing

A certification confirming the availability of needed radio frequencies 

(referred to as spectrum) to operate in the CHMP’s intended orbital location must be received prior to receiving CHMP funding. The White 
15

House Office of Management and Budget (OMB) listed the following requirement: “You must obtain a certification by the National Telecommunications and Information Administration (NTIA) of the Department of 

Commerce, or your agency as designated by NTIA, that the radio frequencies required can be made available before you submit estimates for 

the development or procurement of major radio spectrum-dependent 

communication-electronics systems (including all systems employing 

space satellite techniques)” (emphasis added).51

Spectrum allocation certification or the authority to use a specific radio 

frequency in a given orbital location is essential to ensure funds are not 

allocated toward a system that may never be permitted to operate. The 

OMB regulation represents a challenge for CHMPs due to the length of 

time required to receive the necessary certification before program planning and budgeting can occur. Dr. Albert Merrill, a frequency spectrum 

subject matter expert for Aerospace’s Communication Architectures Department, described how the certification effort requires international 

coordination and is a “first come, first serve” process which takes between 

two to seven years for approval.52

How does this requirement impact a CHMP solution? SMC must have 

NTIA certify the availability of spectrum prior to submitting an estimate 

or receiving funding to build a payload. However, to apply for spectrum 

certification SMC must know the orbital location of the CHMP, which 

cannot be determined without knowing who will be the commercial 

host. SMC must have funding to release a proposal request and conduct 

a full and open competition to select a host before determining a commercial host.

The length of time it takes to accomplish the spectrum certification is 

also incongruent with the commercial timeline of contract award to inorbit operations in just 24 to 32 months. By the time the two- to sevenyear spectrum certification process was complete, the commercial host 

originally targeted would be finished with satellite testing (too late to integrate the military payload on the commercial satellite) or already in 

orbit.

Challenge: The Military Industrial Complex

The previously mentioned challenges can make CHMPs difficult to 

implement, but Dr. Daniel Kwon of the commercial satellite manufacturer Orbital Sciences added another concern. Although he did not personally label this as the “military industrial complex” challenge, Dr. Kwon 

explained that he felt some members of the SBIRS program office were 

nervous about CHIRP launching and getting data prior to the SBIRS sat-
16

ellite.53 The ability to be on orbit in three years instead of nine, and at 

hundreds of millions of dollars below the cost of a SBIRS satellite, could 

rob billions from everyone in the program office and the contractors.54 The 

hypothesis that implementation of less-complex CHMP solutions, with 

perceived smaller budgets, would require many influential parties to advocate against their self-interests is not a farfetched notion.

Air Force program managers, government support contractors, and 

FFRDC—such as the Aerospace Corporation and MITRE—all play a pivotal role in the evaluation and selection of technologies and contracts to 

be awarded. These personnel, typically members of source selection 

teams, provide a technical analysis of proposals for the source selection 

authority to base a contract award decision. While it is true that all members on a source selection, including government personnel, must validate their impartiality from the companies whose proposals are being 

evaluated, this does not mean they do not have a stake in the outcome.

A government support contractor or FFRDC member’s very employment hinges on the size and complexity of the program to be awarded. A 

unique and complex program with numerous formal oversight mechanisms necessitates an increased number of supporting FFRDC and government contractor personnel. The perception, from a government program manager’s viewpoint, is that those who lead programs with large 

budgets have an increased chance at winning annual awards and therefore would be promoted ahead of peers. Defense contractors like Raytheon, Northrop, Lockheed, and Boeing employ hundreds of thousands 

of Americans.55 The companies require a hefty influx of dollars to keep 

these Americans employed while remaining profitable; large complex developmental efforts keep those dollars flowing in. Elected officials who 

have significant influence over what programs are funded or remain 

funded in the defense budget support these companies. Moreover, many 

influential former general officers are paid considerable sums to wield 

their influence and advocate for defense contractors while still collecting 

a paycheck as an advisor to the DOD. “Of the 158 retired generals and 

admirals identified as having worked for the military as senior mentors, 

80 percent had financial ties to defense contractors, including 29 who were 

full-time executives of defense companies,” USA Today reported.56

Programs like the SBIRS, with its protracted schedules and multibillion dollar overruns, provide a good example of a complex SMC program. 

The SBIRS cost per satellite climbed to nearly $3 billion, a 230 percent increase over initial estimates. The first satellite was launched approximately nine years late.57 Pres. Dwight D. Eisenhower foretold of these 

challenges in his oft-quoted farewell address on 17 January 1961. He is 

credited as being the first to warn of guarding against unwarranted influ-
17

ence by the military-industrial complex.58 Some may scoff at placing 

blame on a ubiquitous problem such as the military-industrial complex 

for the lack of CHMP awards, but it cannot be ignored. Ways to deal with 

this challenge should be considered.

Summary of Challenges

While the aforementioned challenges are far from an exhaustive list of 

issues that impedes additional CHMP solutions from contract award, 

one can begin to appreciate the challenge facing SMC’s acquisition workforce. This section reviewed the challenges of a military payload requirement aligned with a commercial host and owner-operators’ risk tolerance 

and willingness to deal with the government. It also reviewed how spectrum management policy tied to funding could disrupt CHMP decisions 

and how the acquisition culture at SMC breeds low-risk tolerance and 

unempowered program managers. Finally, the potential impact of the 

military industrial complex was highlighted.

Methodology

A problem/solution framework analyzed the challenges that may have 

contributed to the lack of CHMP contract awards. I analyzed remedies to 

the challenges, provided additional recommendations, and examined solutions against set criteria. The first criterion is that solutions should allow SMC program managers to leverage the methods commercial industry may propose to meet the specific requirements for a given military 

payload. This is critical, as each CHMP opportunity presents a unique set 

of circumstances that the commercial partners and the Air Force program manager will consider. An attempt to dictate a standard set of rules 

that apply to all CHMP arrangements limits the commercial satellite industry’s ability to construct a deal which could be mutually beneficial to 

all parties. The restrictive language discussed in General Wheeler’s memorandum provided a good example of how an attempt to regulate CHMP 

arrangements could have a negative effect on commercial partners. The 

second criterion was that proposed solutions should assist with the satellite acquisition cultural shift. This must take place for SMC and AFSPC 

requirements community members to consider a CHMP solution as an 

option for meeting a requirement.

Analysis of Solutions

Eisenhower warned of the military-industrial complex, but in the 

same speech, he also stated that “it is the task of statesmanship to mold, 
18

to balance, and to integrate these and other forces, new and old, within 

the principles of our democratic system.”59 Molding, balancing, and instituting change in government bureaucracies can be challenging. However, 

there is no shortage of senior leader CHMP champions up for the challenge. These leaders have pushed their workforce to find ways to implement CHMP solutions. It starts from the top; Pres. Barack Obama stated 

in the National Space Policy that the government should explore hosting 

payloads on commercial space spacecraft (satellites).60 Former secretary 

of defense Robert Gates and James R. Clapper, director of national intelligence, outlined commercial hosting of military payloads as a potential 

cost-effective method of adding resilience to DOD space architectures in 

the National Security Space Strategy.61 The responsibility to structure 

programs which implement the guidance in the National Space Policy 

and National Security Space Strategy falls to General Pawlikowski at 

SMC. She took action in the summer of 2011 and allocated workers to 

retain the knowledge gained from the Air Force’s only CHMP acquisition, CHIRP, and tasked those members to establish a Hosted Payload 

Office at Los Angeles AFB, California. Since then the Hosted Payload 

Office has pursued solutions that could increase the number of future 

CHMP awards.

CHMP Solutions in Work at SMC

The first solution to be examined was an effort the SMC Hosted Payload Office, led by Lt Col Mark Brykowytch, was pursuing at the time this 

paper was written was the award of an Indefinite Delivery Indefinite 

Quantity (ID/IQ) contract for CHMPs, referred to as the HoPs (Hosted 

Payloads) ID/IQ. The Federal Acquisition Regulation describes an ID/IQ 

as an indefinite quantity, “within stated limits, of supplies or services during a fixed period.”62 An ID/IQ prequalifies a group of contractors for 

exclusive access to bid on efforts that are within the scope of a specific ID/IQ 

contract, in this case HoPs.

Colonel Brykowytch said that one of the HoPs ID/IQ goals is to maximize the number of contractor awardees.63 Contractors (owner-operators, 

satellite manufactures, or payload providers) who could reasonably demonstrate the ability to successfully execute a CHMP contract should be included as an eligible contractor to bid for work under the HoPs ID/IQ. 

Maximizing the number of awardees increases the odds of overcoming 

the requirement alignment challenges between the military payload and 

commercial host. The contractor’s manufacturing practices should 

also be examined to ensure suitability to the government prior to being 

qualified under the HoPs ID/IQ.
19

Key processes would be highlighted in the contract; if changed a HoPs 

ID/IQ contractor would be required to notify the government.64 This allows for a program office that uses the HoPs ID/IQ to choose the lowest 

price technically acceptable, as the contractor’s processes have already been 

validated by SMC through the original HoPs ID/IQ award. When a HoPs 

ID/IQ contractor bids to host a military payload, it is a firm-fixed-priced 

contract, and Brykowytch explained that “the responsibility is on the 

contractor to make the ride happen, and determine how to get the data to 

the end user.”65 This structure allows the commercial owner-operator to 

select the most efficient solution to meet the CHMP requirements, while 

the HoPs ID/IQ contract holds it responsible for the decisions made.

The firm-fixed-price contract minimizes the danger of the government 

introducing requirement perturbations due to the risk of fines being incurred. The onus is on the commercial host to determine how to answer 

the military payload requirements within the approved processes dictated by the HoPs ID/IQ. Letting the commercial host determine how to 

meet the requirements also means that the host won’t be affected by a 

government program manager’s inability to make timely decisions. Obtaining the frequency spectrum certification could also be a requirement 

the commercial host must answer. However, one must question what 

happens if no commercial host bids to accommodate the military payload. Will OMB allow a military payload to be funded based on the assumption a commercial host will obtain a frequency spectrum certification for the payload? More research needs to be done in this area.

The effort to establish the HoPs ID/IQ is evidence that SMC has made 

a concerted effort to increase the number of CHMP awards in the future. 

The HoPs ID/IQ aligns with this paper’s first criterion to leverage the 

methods the commercial satellite industry may propose to meet a 

CHMP’s requirements. However, before a program office can fulfill a requirement with a CHMP and leverage the HoPs ID/IQ, a CHMP must be 

considered as a potential solution. Failing to address the SMC acquisition 

culture, which has largely opted for unique free-flyer solutions for the last 

two decades, could result in an innovative HoPs ID/IQ never awarding a 

single Air Force CHMP.

Actively Leverage Education with Industry Program

AFSPC and SMC could also actively target the Education with Industry 

(EWI) program to instruct its acquisition workforce on the commercial 

satellite industry. EWI exposes officers and civil servants to private sectors of the economy, enabling them to understand the management 

methods, structure, and technologies of modern industry.66 The Air 
20

Force Institute of Technology (AFIT) manages the EWI program, established in 1947 and sponsored by the secretary of the Air Force for Acquisition.67 AFSPC and SMC should work closely with AFIT and the commercial satellite industry’s owner-operators and manufacturers to have 

its brightest captains, majors, and civil servants in the space acquisition 

or requirements disciplines hosted at a commercial satellite industry 

owner-operator headquarters or a commercial satellite manufacturer’s 

production facility. EWI personnel should be detailed to follow a commercial satellite acquisition for 10 months. AFSPC/SMC, working with 

the Air Force Personnel Center, should ensure individuals who served an 

EWI tour within the commercial satellite industry are placed into a program office or requirements position at SMC or AFSPC for a minimum 

of four years.

This proposed solution could yield long-term benefits if actively managed by AFSPC/SMC leadership. Having witnessed the effectiveness of 

the commercial satellite industry’s acquisition culture firsthand, these 

EWI tour graduates could encourage the larger SMC/AFSPC workforce 

to seek out commercial methods where practical. While this solution will 

not result in an increase in CHMP contract awards in the near term, it 

would expose AFSPC/SMC acquisition professionals to an alternative 

way of thinking about satellite acquisition.

Although the EWI solution has merit, it would take a minimum of 20 

months to begin to see an impact if the program were implemented tomorrow. Personnel would have to be selected, conduct their 10-month 

tour, and then be reassigned. The EWI concept does not do enough to 

increase the number of CHMPs awarded and leaves much to chance. The 

HoPs ID/IQ, on the other hand, offers a sanctioned contract mechanism 

to procure CHMP solutions in the near term. For those aware of leadership’s sanctioning of the HoPs ID/IQ contract and therefore CHMPs, the 

HoPs ID/IQ will begin the normalization of SMC leveraging commercial 

practices through CHMP solutions. Awarding the HoPs ID/IQ contract 

will not automatically result in CHMPs being considered as solutions. 

Further action is required to break through the culture of complex freeflyer solutions and the potential ill effects of the military-industrial complex to ensure AFSPC and SMC personnel consider CHMPs as an option.

Air Force Instruction for Commercially Hosted Military Payloads

SMC programs have been developed from a methodology which is 

dissimilar to the commercial satellite industry’s methods. Members of 

the AFSPC/SMC acquisition and requirements community may have 

many preconceived notions regarding CHMP solutions and may ques-
21

tion their authority to leverage commercial satellite industry practices. 

Some of these acquisition professionals may lack exposure to CHMPs 

and may not understand how to navigate the many challenges associated 

with the selection of a CHMP solution. While the HoPs ID/IQ addresses 

some of these challenges, it assumes that a decision to seek a CHMP solution has already been made. If preconceived notions regarding SMC’s 

ability to leverage CHMPs are not addressed, SMC could end up with an 

innovative contract vehicle to leverage CHMPs, but no military payloads 

to host.

The commercial satellite industry and the Defense Acquisition University members recognized the hesitance of the defense space acquisition community to leverage the commercial satellite industry. They collaborated on an article for the Defense AT&L magazine which did not 

specifically address CHMPs but addressed perceived concerns the defense industry may have with leveraging the commercial satellite industry.68 The article highlighted how part 12 of the Federal Acquisition Regulation requires the government to first seek out commercial 

nondevelopmental items to meet requirements.69 These types of articles 

are helpful in raising awareness about the possibilities of leveraging the 

commercial satellite industry. However, government leaders have already 

decided that AFSPC/SMC should leverage CHMPs when it makes sense 

to do so. Yet despite the leaders’ advocacy, only one CHMP contract has 

been awarded by the Air Force.

Writing an Air Force instruction (AFI) to inform and legitimize 

CHMPs as a potential course of action is one method to assist the AFSPC/SMC acquisition community to consider commercial hosting as an 

alternative to the traditional free-flyer approach. Having an AFI that explains CHMPs in detail would not only formally sanction the approach, 

but also raise awareness and provide details on how to execute a CHMP 

course of action. The AFI could list the challenges associated with implementing a CHMP and appoint offices of primary responsibility, like the 

Hosted Payload Office, to assist with these challenges. It could incorporate 

a lessons learned section from the commercial satellite industry on previous government hosted payloads (table 1). The AFI could also outline a 

streamlined contract approach to ensure future CHMP contract award 

opportunities do not rely solely on the successful award of the HoPs ID/

IQ. This approach could mimic AFI 63-114, Acquisition Quick Reaction 

Capability Process, which gives roles, timelines, and responsibilities to 

key members in the CHMP acquisition process.70

However, the chief problem with simply issuing an instruction is getting the right people to read it, at the right time. Another challenge is 

getting AFSPC/SMC personnel to consider the information offered in 
22

the instruction as a means to meet their satellite-based requirements. An 

AFI on CHMPs will not have value without supplying the proverbial 

“teeth,” or means to force AFSPC/SMC acquisition personnel to consider 

a CHMP to meet their requirement.

To insert those teeth in the AFI, AFSPC/SMC leadership could request that Frank Kendall, the undersecretary of defense for acquisition, 

technology, and logistics (USD AT&L), issue an addendum to DirectiveType Memorandum (DTM) 09-025, Space Systems Acquisition Policy 

(SSAP). The addendum could dictate that program managers seeking approval of a material development decision for their satellite-based capability/

program must demonstrate how CHMPs would be considered during the 

initial phases of program planning. If the program manager determined 

a CHMP is not a suitable solution, an explanation would be required 

prior to the USD AT&L allowing advancement to the next phase of the 

program. However, with this course of action, the USD AT&L must be 

extremely careful not to have the message of the addendum and CHMP 

AFI misinterpreted.

In my opinion, one way to disrupt future CHMP contract awards 

would be to force programs that do not align well with a commercial 

hosting methodology to pursue a CHMP solution. For example, if a program were forced into a CHMP solution despite obvious incompatibility 

because a program leader read a CHMP AFI and thought “that’s what 

senior leaders want,” the program would encounter schedule and cost 

growth issues. Mandating that program managers consider CHMPs 

could be viewed as the USD AT&L favoring a CHMP course of action. 

This concern should be addressed clearly in the proposed CHMP AFI 

and the USD AT&L’s DTM 09-25 SSAP addendum. It should be stated 

that mandating a review of the feasibility of CHMPs by the USD AT&L is 

not to be interpreted as an attempt to drive all satellite-based capabilities 

to be solved by a CHMP solution. Rather, it is the goal to make AFSPC/

SMC acquisition professionals aware of CHMP options and to consider 

them when appropriate.

A CHMP AFI, along with the addendum, would provide the impetus 

needed for AFSPC/SMC acquisition professionals to consider CHMPs as 

a means for meeting satellite-based requirements and potentially increase the number of CHMP contract awards. The CHMP AFI solution is 

the step which seems to be missing before a contract vehicle like the 

HoPs ID/IQ can truly be taken advantage of. The CHMP AFI would also 

improve upon the EWI concept by immediately legitimizing the CHMP 

solution from the top of the acquisition leadership structure. The EWI 

concept is more of an insurgent mind-set, where a few are given the 
23

knowledge of the CHMP option and are expected to teach others and 

legitimize a shift in acquisition culture.

Conclusion

Senior leaders have articulated their desire to leverage CHMPs. The 

commercial satellite industry indicates that it would like to see the government utilize the available space on the industry’s satellites to host 

military payloads. Yet only one CHMP has been awarded by SMC. There 

are numerous commercial satellites scheduled to launch over the next 

five years, but there are also numerous challenges which make implementing a CHMP solution difficult. The streamlined acquisition culture 

the commercial satellite industry operates in—firm-fixed-priced non

developmental contracts are conceived and awarded, with the satellites in 

orbit in less than four years—is what attracts the government to CHMPs 

and makes them difficult to implement. AFSPC/SMC acquisition professionals are not accustomed to the commercial satellite industry’s scheduledriven and informal (but thorough) oversight and review practices. AFSPC/

SMC acquisition culture, born from the procurement of unique developmental free-flying satellite solutions, must be refocused to allow for the 

paradigm of CHMPs to be embraced.

AFSPC/SMC leadership has taken proactive measures to embrace the 

CHMP concept and established a Hosted Payload Office at SMC. At the 

time when this paper was written, SMC’s Hosted Payload Office sought 

to streamline the CHMP contract award process by prequalifying a group 

of commercial satellite industry owner-operators and manufacturers to 

host military payloads under the HoPs ID/IQ contract vehicle. These two 

actions address many of the challenges that impede CHMP awards but by 

themselves do not address the cultural change required for CHMPs to be 

considered as an alternative in the first place.

Leveraging a 10-month EWI tour for space acquisition personnel in the 

commercial satellite industry followed by a mandatory four-year assignment at an AFSPC/SMC program office provides a long term method to 

refocus the acquisition culture. Unfortunately, this solution will take 

years to see any impact and leaves much of the culture change needed to 

increase CHMP contract awards up to chance. A CHMP AFI accompanied by an addendum to DTM 09-25 to ensure CHMPs are considered as 

an alternative to free flyers is one solution that could stand on its own. 

The HoPs ID/IQ option would be an excellent contract mechanism to 

accompany the AFI and addendum. However, the CHMP AFI, which 

leverages a USD AT&L addendum to DTM 09-25 SSAP to increase 

awareness and acceptance of CHMP solutions, could still increase the 
24

number of CHMP contract awards in the near term if the HoPs ID/IQ is 

delayed or cancelled.

Notes

All notes appear in shortened form. For full details, see the appropriate entry in 

the bibliography.

1. Space and Missile Systems Center, “Fact Sheet.”

2. Andrea Shalal-Esa, “US Air Force Eyes Changes to National Security Satellite Programs,” 

Reuters, 18 January 2013, accessed 23 January 2013, http://www.reuters.com/article/2013/01/18

/usa-pentagon-satellites-idUSL1E9CI0PN20130118.

3. Dr. Jared Fortune (Aerospace Corp.), interview by author, 15 December 2012.

4. “Commercially Hosted Infrared Payload Completes Initial On-Orbit Testing,” Air Force 

Space Command News Service, 3 November 2011, accessed 24 January 2013, http://www

.afspc.af.mil/news/story.asp?id=123278572.

5. Department of Commerce, “Hosted Payloads.”

6. US Senate, Armed Services Subcommittee on Strategic Forces.

7. Pawlikowski, Loverro, and Cristler, “Space Disruptive Challenges,” 27–54.

8. Office of Management and Budget (OMB), Budget Overview.

9. Arnold and Hays, “SpaceCRAF,” 30–39.

10. Goldstein et al., Telecommunications, 16.

11. “Satellite Operators.”

12. Sears, “The Road Forward in Space.”

13. Sears, “Hosted Payload Concept.”

14. Simonds, Sullivan, Jacquot, and Kersten, “Lessons Learned from Hosting an Infrared Payload,” 3.

15. “Australian Defence Force Contracts for Hosted Payload.”

16. “Value Added.”

17. “Defense Space and Security.”

18. Maléter, “Strategies to Mitigate High Satellite Insurance,” 46–47.

19. Ibid.

20. Ibid.

21. Wray, Ommering, and Kosinski, “Commercial Communications Satellites,” 6.

22. Erwin, “Air Force Budget Ax Aimed at Big-Ticket Satellites.”

23. Spittle, Brodfuehrer, Giomi, and Krieger, “Commercial Acquisition Demystified,” 10–15.

24. Unnamed members of Space Systems Loral and unnamed owner-operator customer, 

interview by author, September 2011.

25. Defense Contract Management Agency, Guidebook, chap. 18, sec. 1.

26. Ibid., chap. 18, sec. 6.1.

27. Wray, Ommering, and Kosinski, “Commercial Communications Satellites,” 6.

28. Tim Deaver (SES Americom), interview by author, 11 September 2012.

29. Ibid.

30. Moskowitz, “Military & NASA Look to Partner.”

31. Dudney, “Game Changers in Space,” 51.

32. Fortune, interview.

33. Ibid.

34. Ibid.
25

35. “Lt Gen Ellen M. Pawlikowski,” biography, accessed 5 January 2013, http://www.af.mil

/AboutUs/Biographies/Display/tabid/225/Article/104867/lieutenant-general-ellen-m

-pawlikowski.aspx.

36. Wheeler, memorandum.

37. Magnuson, “Military Space Communication Lacks Direction.”

38. Taverney, “Resilient, Disaggregated, and Mixed Constellations.”

39. Ibid.

40. Ibid.

41. Chaplain, Space Acquisitions, 1.

42. Government Accountability Office (GAO), Despite Restructuring, 6.

43. Chaplain, Space Acquisitions, 10.

44. Taverney, “Resilient, Disaggregated, and Mixed Constellations.”

45. GAO, Military Space Operations.

46. Ibid., 4.

47. Simonds, Sullivan, Jacquot, and Kersten, “Lessons Learned,” 8.

48. Deaver, interview.

49. Ibid.

50. Ibid.

51. OMB, Preparation, Submission, and Execution of the Budget, 10.

52. Merrill, “Spectrum Management Tutorial,” chart 25.

53. Dr. Daniel Kwon (Orbital Sciences), interview by author, 8 January 2013.

54. Ibid.

55. “Global 500,” CNN Money, 25 July 2011, accessed 24 January 2013, http://money

.cnn.com/magazines/fortune/global500/2011/full_list/index.html.

56. Tom Vanden Brook, Ken Dilanian, and Ray Locker, “Retired Military Officers Cash In 

as Well-paid Consultants,” USA Today, 18 November 2009, accessed 18 February 2013, http://

usatoday30.usatoday.com/news/military/2009-11-17-military-mentors_N.htm.

57. Chaplain, Space Acquisitions, 2.

58. Eisenhower, Farewell Radio and Television Address.

59. Ibid.

60. Obama, National Space Policy, 10.

61. Gates and Clapper, National Security Space Strategy, 10.

62. Federal Acquisition Regulation, Code of Federal Regulations 48, sec. 16.504.

63. Lt Col Mark Brykowytch (USAF), interview by author, 18 January 2013.

64. Ibid.

65. Ibid.

66. Air Force Institute of Technology (AFIT), Education with Industry.

67. AFIT, Handbook on Education with Industry, 5.

68. Spittle, Brodfuehrer, Giomi, and Krieger, “Commercial Acquisition Demystified,” 10–15.

69. Ibid., 15.

70. Air Force Instruction 63-114, Acquisition Quick Reaction Capability Process, 8.

27

Abbreviations

ADF Australian Defence Force

AFI Air Force instruction

AFIT Air Force Institute of Technology

AFSPC Air Force Space Command

AT&L acquisition, technology, and logistics

CCD charge coupled device

CDR critical design review

CHIRP commercially hosted infrared payload

CHMP commercially hosted military payload

DOD Department of Defense

DTM directive type memorandum

EGNOS European GPS navigation overlay system

EWI Education with Industry

FAA Federal Aviation Administration

FFRDC federally funded research development center

GAO Government Accountability Office

GEO geosynchronous Earth orbit

GPS Global Positioning System

HoPs hosted payloads

ID/IQ indefinite delivery/indefinite quantity

IEEE Institute of Electrical and Electronics Engineers

IRIS Internet router in space

IRMA in-orbit reconfigurable multibeam antenna

ISR intelligence, surveillance, and reconnaissance

JAMI Japan meteorological imager

LCRD laser communications relay demonstration

LEO low Earth orbit

MEO medium Earth orbit

MILSATCOM military satellite communications

NAIS national automatic identification system

NASA National Aeronautics and Space Administration

NTIA National Telecommunications and Information

Administration

OMB Office of Management and Budget

PDR preliminary design review

SAIC Science Applications International Corporation

SBIRS space-based infrared system

SMC Space and Missile Systems Center

SSAP Space Systems Acquisition Policy
28

SWaP size, weight, and power

USD undersecretary of defense

WAAS wide area augmentation system
29

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