Military Space Systems: DOD's Use of Commercial Satellites to Host Defense Payloads Would Benefit from Centralizing Data
Released: 2018-07-30T00:00:00


Highlights: section_title: Why GAO Did This Study
paragraphs: Each year, DOD spends billions of dollars to develop, produce, and field large, complex satellites. For such satellite systems, a single adversary attack or on-orbit failure can result in the loss of billions of dollars of investment and significant loss of vital capabilities. As DOD plans new space systems and addresses an increasingly contested space environment, it has the opportunity to consider different acquisition approaches. One such approach is to integrate a government sensor or payload onto a commercial host satellite.

House Armed Services Committee report 115-200, accompanying a bill for the Fiscal Year 2018 National Defense Authorization Act, included a provision for GAO to review DOD's use of commercially hosted payloads. This report (1) determines the extent to which DOD uses commercially hosted payloads and (2) describes and assesses factors that affect their use.

GAO reviewed DOD policies, documentation, and planning documents, and interviewed a wide range of DOD and civil government officials, and commercial stakeholders.

section_title: What GAO Found
paragraphs: GAO and others have found that using commercial satellites to host government sensors or communications packages—called payloads—may be one way DOD can achieve on-orbit capability faster and more affordably. Using hosted payloads may also help facilitate a proliferation of payloads on orbit, making it more difficult for an adversary to defeat a capability. Since 2009, DOD has used three commercially hosted payloads, with three more missions planned or underway through 2022 (see figure below).

DOD estimates that it has achieved cost savings of several hundred million dollars from using commercially hosted payloads to date, and expects to realize additional savings and deliver faster capabilities on orbit from planned missions. Cost savings can result from sharing development, launch, and ground system costs with the commercial host company.

Among the factors that affect DOD's use of hosted payloads are

a perception among some DOD officials that matching government payloads to commercial satellites is too difficult; and

limited, fragmented knowledge on how to mitigate various challenges

GAO found that further opportunities to use hosted payloads may emerge as DOD plans new and follow-on space systems in the coming years. However, DOD's knowledge on using hosted payloads is fragmented, in part because programs are not required to share information. In 2011, the Air Force created a Hosted Payload Office to provide expertise and other tools to facilitate matching government payloads with commercial hosts. However, GAO found that DOD programs using hosted payloads are not required and generally do not provide cost and technical data, or lessons learned, to the Hosted Payload Office, or another central office for analysis. Requiring programs that use hosted payloads agency-wide to provide this information to a central location would better position DOD to make informed decisions when considering acquisition approaches for upcoming space system designs.

section_title: What GAO Recommends
paragraphs: GAO recommends that DOD require programs using commercially hosted payloads to contribute resulting data to a central location. In implementing this recommendation, DOD should assess whether the Air Force's Hosted Payload Office is the appropriate location to collect and analyze the data. DOD concurred with the recommendation.

section_title: Letter
paragraphs: Each year, the Department of Defense (DOD) spends billions of dollars to  develop, produce, and field its space systems. These systems provide the  government with critical intelligence information, communication and  navigation methods, weather data, and other capabilities vital to military  and civilian agencies and commercial industry. As satellites have become  more complex, they have required larger investments of money and time  to develop, produce, and launch. Some satellites, which have taken more  than a decade to develop due in part to their size and complexity, contain  technologies that are obsolete by the time they are launched. Additionally,  in recent years, threats to DOD space systems have emerged, including  anti-satellite weapons, communications jamming, and increased  environmental hazards in space, such as orbital debris. A single  adversary attack, on-orbit problem, or launch failure of a DOD satellite  can result in the loss of billions of dollars of investment and a significant  loss of capability.

DOD is currently planning new and follow-on space systems for some of  its major space programs that are in production or have been fielded. As  such, program officials have the opportunity to consider fresh approaches  for acquiring space-based capabilities that may be more cost-effective,  place technologies on orbit more quickly, and potentially offer added  resilience and augmented capabilities to allay emerging threats. Both the  2010 National Space Policy and the 2013 National Space Transportation  Policy call on federal agencies to explore the use of inventive,  nontraditional arrangements for acquiring commercial space services.  One such arrangement is to place a government payload—such as a  sensor or a communications package—on a commercial host satellite. In  addition to launching with the host satellite, the hosted payload uses  available resources from the host satellite, such as power and  communication systems. The hosted payload approach allows both the  government and commercial entity to capitalize on shared development  and launch costs, potentially reducing overall costs for both. The House  Armed Services Committee report 115-200 accompanying a bill for the  National Defense Authorization Act for Fiscal Year 2018 contained a  provision for GAO to review DOD’s use of hosted payloads. This report  (1) determines the extent to which DOD uses commercially hosted  payloads and (2) describes factors that affect DOD’s use of hosted  payloads and assesses how DOD is addressing them.

To determine the extent to which DOD uses commercially hosted  payloads, we reviewed DOD documentation of prior, current, and future  plans to use hosted payloads, including budget documentation and  informational briefings. We analyzed program office planning documents,  including management directives, hosted payload user guides, lessons  learned, and analyses of alternatives study guidance. We also studied  tools used to identify hosted payload opportunities and program contract  documents, including the 2014 Hosted Payload Solutions multiple award  indefinite delivery indefinite quantity vehicle. Because our review focused  on commercially hosted payloads, we did not assess DOD’s efforts to  host its payloads on other government agency satellites. We interviewed  DOD officials from the offices of the Under Secretaries of Defense for  Acquisition and Sustainment, and Policy; the Office of the Secretary of  Defense Cost Assessment and Program Evaluation; DOD’s Chief  Information Officer; Missile Defense Agency; the Navy’s Program  Executive Office for Space Systems and Space and Naval Warfare  Systems Command; and research and development organizations,  including the Defense Advanced Research Projects Agency and Naval  Research Laboratory. Additionally, we conducted interviews with Air  Force personnel from Air Force Space Command, the Space and Missile  Systems Center’s Hosted Payload Office (HPO), and the Space Test  Program.

To describe and assess the factors that affect DOD’s use of commercially  hosted payloads, we examined applicable policies, strategy documents  and briefings, including the 2010 National Space Policy, 2013 National  Space Transportation Policy, and the Air Force’s Space Warfighting  Construct. To understand logistical, technical, and other considerations  for using commercially hosted payloads, we reviewed program  documents on commercially hosted payload arrangements from DOD and  interviewed the organizations listed above. We also interviewed officials  in the Departments of Commerce and Transportation, as well as the  National Aeronautics and Space Administration (NASA). Finally, we  interviewed a broad range of industry stakeholders, including commercial  satellite manufacturers and owner/operators, and industry associations— such as the Satellite Industry Association and the Hosted Payload  Alliance—to understand perspectives on the factors that affect the use of  commercially hosted payloads. We compared DOD efforts to address  factors affecting their use of commercially hosted payloads to criteria  established in our work on strategic sourcing best practices as well as our  work on duplication, overlap, and fragmentation.

We conducted this performance audit from July 2017 to July 2018 in  accordance with generally accepted government auditing standards.  Those standards require that we plan and perform the audit to obtain  sufficient, appropriate evidence to provide a reasonable basis for our  findings and conclusions based on our audit objectives. We believe that  the evidence obtained provides a reasonable basis for our findings and  conclusions based on our audit objectives.
subsections: section_title: Background
subsections: section_title: Commercially Hosted Payloads
paragraphs: DOD defines a hosted payload as an instrument or package of  equipment—a sensor or communications package, for example— integrated onto a host satellite, which operates on orbit making use of the  host satellite’s available resources, including size, weight, power, or  communications. A commercially hosted DOD payload is a DOD payload  on a commercial satellite. In general, hosted payloads may be either  experimental or operational. Experimental payloads demonstrate new or  existing technologies on orbit for potential use on future operational space  systems. Operational payloads deliver required capabilities to end users.  Hosted payload arrangements may be unsuitable for some missions. For  example, some payloads may be too large or need too much power for a  host satellite to feasibly accommodate, or may require unique satellite  maneuvers that, if exercised, would negatively affect a host satellite’s  primary mission. Civil government agencies, like NASA and the National  Oceanic and Atmospheric Administration (NOAA), have used or have  plans to use commercially hosted payloads. For more information on the  commercially hosted payloads that civil agencies have used or plan to  use, see appendix I.

section_title: Potential Benefits of Using Commercially Hosted Payloads
paragraphs: We and others have identified potential benefits of using commercially  hosted payloads to gain space-based capability, such as:

Cost savings—Commercially hosted payloads may increase  affordability because the government payload owner pays for only a  portion of the satellite development and shared launch and ground  systems costs, rather than for the entire system. Also, smaller, lighter,  and less complex systems may shorten procurement timelines,  reduce research and development investment, and reduce risk in  technology development. Some government agencies have reported  saving hundreds of millions of dollars to date from using innovative  arrangements such as hosted payloads.

Faster on-orbit capability—Because commercial satellites tend to  take less time from concept development to launch than DOD  systems do and have relatively frequent launches, hosting  government payloads on commercial satellites may achieve on-orbit  capability more quickly.

Increased deterrence and resilience—Distributing capabilities  across more satellites increases the number and diversity of potential  targets for an adversary and may make it more difficult for an  adversary to decide which assets to attack, serving as a deterrent.  Additionally, more frequent launches could increase DOD’s ability to  reconstitute its satellite groups—or constellations—more quickly in  case of unexpected losses of on-orbit capabilities. Recent strategic  and policy guidance government-wide and at DOD have stressed the  need for U.S. space systems to be survivable, or resilient, against  intentional and unintentional threats—both types of which have  increased over the past 20 years. Intentional threats can include  purposeful signal jamming, laser dazzling and blinding of satellite  sensors, missiles intended to destroy satellites, and ground system  attacks. Some unintentional threats to satellites are created by the  harsh space environment itself, like extreme temperature fluctuations  and radiation, and the growing number of satellites, used rocket parts,  and other space debris on orbit, which could collide with orbiting  satellites.

Continual technology upgrades and industrial base stability— New technologies may be continually incorporated into space systems  using hosted payloads, which may be uniquely suited for higher rates  of production and launches than traditional DOD satellites. Using  commercial satellites for government payloads could help maintain  the U.S. commercial space industry’s ongoing technology  developments by maintaining stable business and incentivizing new  companies to enter the marketplace. Further, increased production  may be distributed over multiple contractors—including traditionally  lower-tier contractors—to foster more competition.

As we reported in October 2014, hosted payloads are among several  avenues DOD is considering to increase the resilience of its satellites in  the face of growing threats. DOD has been looking at ways to break up  larger satellites into multiple smaller satellites or payloads after decades  of building large, complex satellites to meet its space-based  requirements. The broader concept of breaking up larger satellites into  smaller ones is known as disaggregation. In 2014, we reported that DOD  lacked critical knowledge about the concept of disaggregation, including  how to quantify a broad range of potential effects. At the time, for  example, DOD did not have common measures for resilience, which we  found is a key consideration in making a choice as to whether to continue  with a current system architecture or to change it. Recently, senior DOD  officials have also made public statements that indicate a willingness to  consider innovative acquisition approaches so that acquisition timelines  can be reduced. For example, in a 2016 strategic intent document, the  Commander of Air Force Space Command stated that the Air Force  should seek innovative acquisition approaches that leverage DOD’s  buying power across the industry. Additionally, the Secretary of the Air  Force stated that the Air Force is exploring more affordable and  innovative ways to acquire its satellite communication services through  investments in commercial industry and international partnerships.

section_title: Matching Payloads with Commercial Host Satellites
paragraphs: Opportunities to match a DOD payload with a commercial host can arise  in various ways. DOD may first develop a payload and seek to match it  with a commercial host, DOD may work in tandem with a commercial  company to develop a payload to be hosted, or commercial companies— likely the satellite owner, operator, or system integrator—can first identify  upcoming satellite hosting opportunities to DOD. In each scenario, the  DOD program (or payload owner) and the commercial host generally  consider the basic properties of both the payload and host satellite in  attempting to find a match. These properties—including the size, weight,  area, power, and required orbital characteristics of the payload and host  satellite—should be complementary to create an arrangement that is  mutually compatible for each party, according to Aerospace Corporation  recommendations and officials we spoke with. Specifically, these  properties include:

The size of the payload when it is stowed and when it is deployed on  orbit, including the available area on the host satellite;

The available weight and mass distribution the host satellite can

The available power on the host satellite;

The thermal requirements of the payload and corresponding capability  of the host satellite;

The requirements to limit electromagnetic interference—disturbances  that affect electrical circuits on the payload and host satellite;

The available command, telemetry, and mission data rate  requirements of the payload and corresponding capability of the host  satellite;

The compatibility of interfaces between the payload and host satellite;

The pointing accuracy and stability of the host satellite; and

The necessary orbits, including altitude and inclination.

Other considerations when matching a DOD payload with a host satellite  are the compatibility of radio frequency spectrum (spectrum) needs  between the payload and host, and the satellite’s intended orbital  location. Spectrum is a natural resource used to provide essential  government functions and missions ranging from national defense,  weather services, and aviation communication, to commercial services  such as television broadcasting and mobile voice and data  communications. The frequencies, or frequency bands, of spectrum have  different characteristics that make them more or less suitable for specific  purposes, such as the ability to carry data long distances or penetrate  physical obstacles. Each frequency band has a limited capacity to carry  information. This means that multiple users operating at approximately  the same frequency, location, and time have the potential to interfere with  one another. Harmful interference occurs when two communication  signals are either at the same frequencies or close to the same  frequencies in the same vicinity, a situation that can lead to degradation  of a device’s operation or service. As such, a payload or satellite’s  specific placement in any given orbit could potentially interfere with a  neighboring payload or satellite in the same orbit.

In the United States, the National Telecommunications and Information  Administration (NTIA) of the Department of Commerce is responsible for  establishing policy on regulating federal government spectrum use and  assigning spectrum bands to government agencies. The Federal  Communications Commission (FCC) allocates spectrum and assigns  licenses for various consumer and commercial purposes. Additionally, all  government and commercial satellite programs must apply for approval to  operate at a given orbital location using a given band of spectrum  internationally through the International Telecommunication Union (ITU).  The ITU is an agency of the United Nations and coordinates spectrum  standards and regulations.

section_title: The Air Force’s Hosted Payload Office
paragraphs: In 2011, the Air Force created the Space and Missile Systems Center’s  (SMC) Hosted Payload Office (HPO) to provide acquisition architectures  that achieve on-orbit capability more quickly and affordably. The HPO  uses various resources and capabilities to meet its objectives:

Hosted Payload Solutions Contract: In 2014, SMC established the  Hosted Payload Solutions (HOPS) multiple award indefinite delivery  indefinite quantity (IDIQ) vehicle. According to HPO documents,  SMC established the contract—available to all DOD and civil  agencies—to streamline commercially hosted payload arrangements  by selecting a pool of commercial vendors that government payload  owners can use to access space on commercial host satellites.  Programs do not have to use HOPS, however, and may contract with  commercial companies directly. The HOPS vehicle includes 14  vendors across the commercial satellite industry. SMC awarded task  orders for studies to each of the vendors with a contract to gather  information on potential host opportunities, orbits and launch  schedules, cost estimates for hosting fees, and existing host satellite  interfaces.

Feasibility Studies: Using the information it gathered from the 14  vendor studies, the HPO stated that it built a database to provide  information on potential satellite hosts and the suitability of certain  payloads for host opportunities, including cost estimates. The HPO  stated that it can use this information to assess the feasibility of a  hosted payload opportunity for interested SMC space programs. The  HPO also conducts feasibility studies for interested programs based  on publicly available information and from industry requests for  information.

Hosted Payload Interface Design guidelines: The HPO published  hosted payload interface design guidelines to provide technical  recommendations for hosted payload developers. According to HPO  officials, the intent of these guidelines is to reduce integration costs  and improve the host-ability of all hosted payloads.

Hosted Payload Data Interface Unit: The HPO is developing a  secure hosted payload data interface unit to protect payload data from  unauthorized access by the host. Following its release of draft  documentation to industry stakeholders in March 2018, the HPO is  currently integrating National Security Agency requirements into its  request for data interface unit prototype proposals. According to HPO  officials, the office plans to issue a request for prototype proposals in  May 2018, integrate a data interface unit and payload in 2020, and  launch the integrated system in 2022.

Hosted Payload Expertise: The HPO provides general advice and  expertise to programs in the form of hosted payload architectural  studies, input on acquisition planning and strategy documents, and  other research efforts, according to the office.

section_title: DOD Has Used Commercially Hosted Payloads Three Times and Three More Missions Are Planned or Underway
paragraphs: Since 2009, DOD has launched three experimental payloads on  commercial host satellites and plans to conduct three more missions  through 2022, as shown in figure 1. DOD estimates that it has achieved  cost savings of several hundred million dollars from these experimental  payloads. According to DOD officials, DOD expects to realize additional  cost savings and be able to place capabilities on orbit more quickly from  several hosted payload efforts that are planned or underway.  Opportunities for additional hosted payload efforts may arise in the near  term amid DOD planning for upcoming and follow-on space systems.
subsections: section_title: DOD Has Used Commercial Satellites to Host Three Experimental Payloads
paragraphs: Since 2009, DOD has placed experimental payloads—intended to test or  demonstrate an on-orbit capability—for three programs on commercial  host satellites. Several officials within DOD told us that experimental  payloads tend to be smaller, less expensive, and their missions more risk- tolerant than traditional operational DOD payloads. In these ways, they  said experimental payloads are better-suited to hosting arrangements  than operational DOD payloads. The Air Force has not yet used the  HOPS multiple award IDIQ vehicle—which was awarded to facilitate  commercially hosted payload arrangements—to match a government  payload with a commercial host. The HPO told us that, in 2019, NASA  and NOAA will be the first agencies to use the HOPS vehicle to find a  host satellite for two of their payloads. Table 1 describes the three  experimental payloads hosted on commercial satellites to date. For more  information on civilian agencies that use or plan to use commercially  hosted payloads, see appendix I.

Air Force officials told us that using commercial host satellites for their  experimental payloads has saved several hundred million dollars across  these programs and shortened timelines for launching payloads into  space. For example, the HPO estimated that the Air Force saved nearly  $300 million by using a commercial host satellite for its Commercially  Hosted Infrared Payload (CHIRP), as compared to acquiring the same  capability using a dedicated, free-flying satellite. In addition, Air Force  officials estimated that using commercial host satellites for its Responsive  Environmental Assessment Commercially Hosted (REACH) effort saved  the Air Force approximately $230 million. The REACH effort consists of  over 30 payloads hosted on multiple satellites. Further, because of the  commercial host’s launch schedule, the Air Force achieved its on-orbit  capability sooner than if it had acquired free-flying satellites. In April  2013, we found that the Internet Protocol Routing in Space (IRIS)  payload, launched in 2009, was a commercially hosted payload pilot  mission that would provide internet routing onboard the satellite,  eliminating the need for costs associated with certain ground  infrastructure.

section_title: DOD Has Three Commercially Hosted Payload Efforts Planned or Underway
paragraphs: DOD and Air Force officials told us they are planning to pursue  commercially hosted payloads for three programs in the coming decade  to achieve cost savings and on-orbit capability more quickly. In each  case, officials said they have identified cost and schedule benefits for  their respective programs. For example, the Missile Defense Agency  (MDA) stated that it expects to save approximately $700 million compared  to the cost of traditional, free-flying satellites by acquiring its Spacebased  Kill Assessment capability as payloads on commercial host satellites, and  expects to achieve on-orbit capability years earlier than if it had acquired  dedicated satellites for these payloads. Additionally, a program official  from the Defense Advanced Research Projects Agency (DARPA) told us  DARPA plans to use a commercially hosted payload for the Phoenix  Payload Orbital Delivery effort to test more affordable ways to access  space. Moreover, Air Force officials told us they expect to save $900  million over free-flying satellites by using two Space Norway satellites to  fly an Enhanced Polar System Recapitalization payload. Space Norway  plans to launch its satellites in 2022, which the Air Force expects will  allow it to meet its need for DOD’s required capability. See table 2 for  additional details on DOD’s planned hosted payloads.

Additional opportunities for commercially hosted payloads may be  forthcoming as DOD develops requirements and designs for new and  follow-on space programs. DOD has been analyzing various alternatives  to explore possible future space system designs and acquisition  strategies for several of its upcoming follow-on programs. In these cases,  the analysis of alternatives (AOA) study guidance, set forth by DOD’s  Office of Cost Assessment and Program Evaluation, included direction for  the studies to consider new approaches for acquiring space capabilities.  For example, AOA guidance directed study teams to include hosted  payloads or other disaggregated designs, and commercial innovations in  technology and acquisition to meet some space mission requirements.  Table 3 provides further details of recently completed and ongoing AOAs  to study new designs—or architectures—for upcoming follow-on satellite  systems.

section_title: Logistical and Data Challenges Contribute to Limited Use of Hosted Payloads
paragraphs: Two factors have contributed to DOD’s limited use of commercially  hosted payloads. First, DOD officials identified logistical challenges to  matching government payloads with any given commercial host satellite.  For example, most of the offices we spoke with cited size, weight, and  power constraints, among others, as barriers to using hosted payloads.  Second, while individual DOD offices have realized cost and schedule  benefits, DOD as a whole has limited information on costs and benefits of  hosted payloads. Further, the knowledge it has gathered is fragmented  across the agency—with multiple offices collecting piecemeal information  on the use of hosted payloads. The limited knowledge and data on hosted  payloads that is fragmented across the agency has contributed to  resistance among space acquisition officials to adopting this approach.
subsections: section_title: DOD Officials Cite Logistical Challenges to Matching Payloads to Hosts
paragraphs: DOD acquisition officials within the Office of the Secretary of Defense told  us matching requirements between government payloads and  commercial satellites is typically too difficult for programs to overcome.  Specifically, they said the cumulative complexity of matching size, weight, power, and spectrum needs; aligning government and commercial timelines; and, addressing concerns over payload control and cybersecurity amounts  to too great a challenge.

DOD’s Hosted Payload Office is developing tools designed to help  address these challenges and DOD offices that have used hosted  payloads have also found ways to overcome them.
subsections: section_title: Matching Size, Weight, and Power
paragraphs: Officials from DOD acquisition and policy offices, as well as Air Force and  industry officials we spoke with, cited matching size, weight, and power  between DOD payloads and commercial host satellites as a challenge.  We similarly found in April 2013 that ensuring compatibility between  payloads and host satellites can pose challenges because not all  commercial satellites are big enough or have enough power to support  hosting a payload. Whether a host satellite can accommodate a payload  can depend on the size of the payload. Additionally, according to industry  representatives, the space taken up by the hosted payload affects the  amount of revenue-generating payloads the host may place on its  satellite, such as additional transponders—devices that emit and receive  signals—for the communications services it provides to customers. The  complexity of integrating a government payload onto a commercial host  can also drive the overall cost of the arrangement.

However, officials said these challenges can be mitigated through the use  of various expertise and lessons learned. HPO officials and industry  representatives have proposed several approaches to help match  properties like size, weight, and power between a DOD payload and a  commercial host satellite. The HPO is developing a hosted payload  interface unit that could potentially provide a standard for payload  developers and system integrators to develop and test their systems. One  commercial company proposed an interface unit that would accommodate  a “universal” DOD payload. Additionally, industry experts stated that with  sufficient planning and time for system integration, nearly any payload  can be accommodated on a host satellite.

The HPO issued guidelines in 2017 to assist DOD payload developers in  working toward typical payload requirements and standards for host  satellites in low Earth orbit and geostationary Earth orbit. These  guidelines inform the payload’s electrical power and mechanical designs.  The principal guideline—echoed by the successful CHIRP demonstration  in 2011—is that the hosted payload must “do no harm” to the mission  performance of its host. Also, satellite interfaces can vary from company  to company. Some commercial companies had experience with the  task—and business opportunity—of integrating multiple customers’  payloads onto satellites since at least the 1990s.

section_title: Matching Spectrum Needs
paragraphs: Air Force, HPO, and industry officials told us that, ideally, the payload  should use the same spectrum allocation as the commercial host. They  said that this is due in part to the lengthy satellite registration process that  takes place in the United States and through the ITU that must be  undertaken prior to placing a satellite on orbit. Some DOD officials added  that the process for all new satellites from initial filing to ITU approval  takes around 7 years. If a satellite owner registers for one frequency band  of spectrum and later requires a different band, the owner has to begin  the registration process from the beginning—restarting the 7-year  timeline. This can be problematic for DOD payload owners seeking to  match their military communications payload with an already-registered  host satellite—particularly if the host satellite’s spectrum allocation is  incompatible with the DOD payload. HPO and other DOD officials said  that very different spectrum needs between payload and host would  therefore preclude the match.

Moreover, a need for military—as opposed to commercial—spectrum for  communications payloads can introduce additional  complications. Although a process exists for a commercial satellite  owner to license military spectrum for use by a hosted payload,  representatives from DOD’s Chief Information Officer’s (CIO) office could  cite only one instance where this has happened. One possible  explanation stems from a 2012 memorandum from DOD’s CIO that  outlines various preferred processes for a commercial host satellite to  host military communications payloads. Several industry officials we  spoke to said that the various processes outlined in the 2012  memorandum would add to the already-lengthy process of spectrum  registration. Further, the memorandum instructs that contractual terms  between the payload and host satellite owners should restrict all military  spectrum use exclusively to the U.S. military. However, one industry  official told us that international entities do not necessarily recognize U.S.  military spectrum, and commercial companies that obtain licenses  through other countries are permitted to use those frequencies. For  example, a senior official of one commercial company we met with stated  that the company licensed U.S. military spectrum through another North  Atlantic Treaty Organization government after failing to successfully  coordinate an FCC request with DOD and NTIA. DOD and industry  representatives told us that from a business perspective, it makes little  sense for a commercial company to seek hosting opportunities for DOD  payloads that require U.S. military spectrum.

section_title: Matching Government and Commercial Development and Acquisition Timelines
paragraphs: Government and industry officials we spoke with said that aligning the  development and acquisition timelines of a government payload and  commercial host satellite is a challenge. The timeline associated with  developing government sensors is generally much longer than that of  commercial satellites, potentially creating difficulties in scheduling and  funding commercially hosted payload arrangements. For example, DOD  satellite systems take, on average, over 7 years to develop and launch a  first vehicle, while commercial satellite programs typically take between 2  and 3 years. DOD payload owners may find it challenging to accelerate  development and acquisition schedules to match those of the commercial  satellite host. Additionally, DOD officials we spoke with said that their  budget and planning processes require funding commitments up to 2  years in advance of actually receiving those funds. This can further  complicate alignment with commercial timelines because the  development of a government sensor would need to be underway well in  advance of a decision to fund a commercially hosted payload approach.  Furthermore, federal law generally prohibits agencies from paying in  advance for a future service or from obligating future appropriations.

However, several DOD and other government agency officials we spoke  with said that it is possible to align government and commercial timelines.  For example, MDA adopted the commercial host’s schedule to ensure its  Spacebased Kill Assessment payload was ready for integration and  launch without delaying the host satellite or worse—missing its own ride  to space. DARPA officials told us they were also able to align DARPA  acquisition and development schedules with the commercial host. The Air  Force’s Enhanced Polar System (EPS) Recapitalization program officials  were able to leverage existing documents such as requirements  documents and acquisition strategies from the predecessor program to  speed up the acquisition process. According to Air Force officials, the  EPS Recapitalization program had a unique opportunity to take  advantage of the availability of a commercial host and had the support of  a high ranking Air Force official that enabled the program to move forward  using a commercially hosted payload approach.

section_title: Maintaining Payload Control and Cybersecurity
paragraphs: Some officials cited concerns with combining government and  commercial space missions. For example, officials across DOD told us  they were wary of losing control over a hosted payload should a  commercial company’s needs change. They said that theoretically, a  commercial provider could decide to turn off power to the government’s  payload if the host satellite needed extra power to perform a certain  function. Additionally, DOD space program officials expressed concern  that commercial practices for ensuring the mission success of the payload  may not be up to government standards—that commercial testing and  integration standards may be less robust than those used by traditional  government programs to ensure success, adding risk to the government  payload. Furthermore, officials in one DOD program office expressed a  distrust of commercial host motives in offering to support a government  payload on their satellite, suggesting that a company could be intending  to steal government technologies. However, industry officials we spoke  with said that DOD can generally issue a solicitation that includes  necessary stipulations. For example, including a condition to preserve the  payload’s priority of mission and other terms to protect the government’s  investment may provide some assurance to those officials that perceive  security risks.

Additionally, some officials we spoke to cited cybersecurity concerns.  They cited loss of control over data security as a challenge to using  hosted payloads. Officials told us the data could be vulnerable to  eavesdropping or manipulation as it travels between government ground  systems and the commercially hosted government payload. However,  according to HPO officials, the Air Force overcame this challenge on the  CHIRP mission by procuring a secure interface that provided a data link  between the payload and dedicated transponder and ground terminal. As  mentioned previously, the Hosted Payload Office is developing a hosted  payload data interface unit to mitigate this challenge by securing payload  data communications from the host satellite.

section_title: Department-wide Information on Commercially Hosted Payloads Is Limited and Fragmented Across Offices
paragraphs: DOD, at the department-wide level, has limited information on  commercially hosted payloads—mostly due to a lack of experience in  using hosted payloads and complexities associated with them. For  example, acquisition officials in the Office of the Secretary of Defense told  us that DOD needs more data and analysis of the potential costs and  benefits. However, realistic cost modeling for commercially hosted DOD  payloads is unavailable because costs can vary across potential hosts  and DOD has minimal experience using commercial hosts. Similarly, the  HPO performs market research and cost estimates based on data from  commercial companies, but according to one official in the HPO, the costs  tend to vary based on the supply and demand in the commercial satellite  industry. Additionally, HPO officials said their cost savings analyses are  based on only two real-world commercially hosted DOD payloads— CHIRP and REACH. HPO officials told us that with additional  government data they could compare the costs of system architectures  that include free-flier satellites with those that use commercially hosted  payloads. Additionally, some potential benefits of using commercially  hosted payloads, such as resilience, may be difficult to measure. In our  2014 report on disaggregation, we recommended that DOD define key  measures related to disaggregation, including developing metrics to  measure resilience. DOD is in the process of developing standard  metrics for resilience.

DOD’s knowledge of commercially hosted payloads is also fragmented  across the agency. Several DOD offices are independently conducting  activities related to commercially hosted payloads, such as pursuing  commercially hosted payload arrangements, developing lessons learned,  and determining demand for commercial hosts. For example, MDA  officials told us they have developed cost and technical data and lessons  learned based on MDA’s Spacebased Kill Assessment payload— launched earlier this year—but have not shared it across the agency. On  the other hand, the Space Test Program, also housed within the Air  Force’s SMC develops lessons learned on its payloads, which are  government payloads on government host satellites and officials there  told us they provide lessons learned to the HPO. In October 2017,  SMC’s Launch Office sent a request for data on hosted payloads to DOD  agencies, research laboratories, and universities, but the HPO was not an  active participant in this request. Independent efforts within DOD to  collect and analyze cost, schedule, and performance results from hosted  payloads can create fragmentation in DOD’s knowledge base and can  increase the risk of duplicative efforts within DOD.

DOD does not collect or consolidate agency-wide knowledge on  commercially hosted payloads and has no plans to do so. Agency officials  stated that DOD does not require programs outside of SMC to consult the  HPO when seeking commercially hosted payload arrangements. The Air  Force established the HPO to facilitate commercially hosted payloads,  however, the 2011 Program Management Directive that established the  HPO states that the HPO will coordinate with SMC directorates for  detailed implementation of hosted payloads but does not address  coordination with agencies or directorates outside of SMC. According to  an HPO official, programs are not required to use HPO expertise or tools  as they pursue using hosted payloads. Further, this official stated that  programs are not required to provide any data or lessons learned to the  HPO, or any other central point within DOD, following the pursuit or  completion of a hosted payload arrangement. The 2011 Program  Management Directive directs the HPO to provide lessons learned to  SMC directorates but does not direct SMC offices to share information— such as costs, technical data and lessons learned on completed  commercially hosted payload efforts—with the HPO. An HPO official  indicated that the HPO obtains data through informal communication with  those programs using hosted payloads that are willing to share data.

We found that limitations and fragmentation of data and knowledge are  contributing to resistance within DOD to using hosted payloads. Several  DOD acquisition and program officials we spoke with who did not have  experience with hosted payloads generally stated that the potential risks  to using hosted payloads outweighed the benefits, and that there was  little evidence-based analysis to prove otherwise. They were not aware of  existing tools that could assist them in making decisions even though the  HPO has been developing these tools and has made efforts to share  them within SMC. DOD acquisition and program officials consistently  cited a preference for maintaining the acquisition status quo over  introducing any perceived added risk to their programs. At the same time,  however, officials who have used hosted payloads were able to overcome  logistical and technical challenges and realize cost savings. However,  according to an HPO official, there is currently no requirement in place to  facilitate sharing their approaches to doing so. We have reported in the  past that DOD’s culture has generally been resistant to changes in space  acquisition approaches and that fragmented responsibilities for  acquisitions have made it very difficult to coordinate and deliver  interdependent systems.

Moreover, our past studies of commercial strategic sourcing best  practices have found that that leading companies centralize procurement  decisions by aligning, prioritizing, and integrating procurement functions  within the organization. Establishing the Hosted Payload Office is one  step in this direction, but the office is organized under the Advanced  Systems and Development Directorate—a research and development  organization—under SMC. Moreover, the 2011 directive that established  the HPO does not address coordination or responsibilities for agencies or  directorates beyond SMC. Consolidating knowledge is important because  it allows organizations to share information and data upon which to  develop consistent procurement tactics, such as ways to overcome  challenges in matching a government payload with a commercial host. As  we found in our work on commercial strategic sourcing best practices,  organizations that struggled with fragmented information in the past  overcame this challenge in part by consolidating their data on costs and  spending. While hosted payload acquisitions are not a typical service  acquisition, successful organizations have found that these techniques  work for highly specialized technical services for which few suppliers  exist.

section_title: Conclusions
paragraphs: As DOD considers new architectures and acquisition approaches,  commercially hosted payloads have the potential to play a role in  delivering needed capabilities on orbit more quickly and at a more  affordable cost than traditional DOD space acquisitions. Placing DOD  payloads on commercial satellites might also be an effective method by  which to increase resiliency. However, DOD’s experience and the data  collected so far are limited in informing decisions on the use of these  payloads. DOD would benefit from leveraging the knowledge and  information gained from each hosted payload experience. Centralized  collection and assessment of agency-wide data would help enable DOD  to mitigate the logistical challenges inherent in matching payloads to  hosts, and better position DOD to make reasoned, evidence-based  decisions on whether a hosted payload would be a viable solution to meet  warfighter needs. Without such knowledge, and a way for interested  programs to leverage it, DOD may not be fully informed about using  hosted payloads and may risk missing opportunities to rapidly and  affordably address emerging threats in space.

section_title: Recommendation for Executive Action
paragraphs: The Secretary of Defense should require programs using hosted  payloads to provide cost and technical data, and lessons learned to a  central office. In implementing this recommendation, DOD should  consider whether the Hosted Payload Office is the most appropriate office  to centralize agency-wide knowledge. (Recommendation 1)

section_title: Agency Comments
paragraphs: We provided a draft of this report to the Department of Commerce, NASA,  and DOD for comment. The Department of Commerce provided technical  comments, which we incorporated as appropriate. NASA did not have  comments on our draft report. In its written comments, DOD concurred  with our recommendation and stated that SMC had initiated a major  reorganization since we drafted our report and that under the new  organizational construct, the Hosted Payload Office had changed and  may not be the appropriate office for centralizing DOD-wide hosted  payload knowledge. DOD’s comments are reproduced in appendix II.  DOD also provided technical comments which we incorporated as  appropriate.

We are sending copies of this report to the appropriate congressional  committees, the Secretary of Commerce, the Secretary of Defense, the  Administrator of NASA, and other interested parties. In addition, the  report is available at no charge on the GAO website at  http://www.gao.gov.

If you or your staff have any questions about this report, please contact  me at (202) 512-4841 or by email at chaplainc@gao.gov. Contact points  for our Offices of Congressional Relations and Public Affairs may be  found on the last page of this report. GAO staff who made key  contributions to this report are listed in appendix III.

section_title: Appendix I: Civil and Other Agency Commercially Hosted Payloads
paragraphs: As shown in table 4, civil and other government agencies use  commercially hosted payloads to enhance navigation systems, monitor  environmental pollution, conduct scientific missions, and improve search  and rescue systems. Officials from all of the agencies we spoke with cited  cost savings and the ability to leverage existing commercial schedules  and technologies among the reasons they use commercial host satellites.

section_title: Appendix II: Comments from the Department of Defense

section_title: Appendix III: GAO Contact and Staff Acknowledgments
subsections: section_title: GAO Contact
paragraphs: Cristina T. Chaplain (202) 512-4841 or chaplainc@gao.gov.

section_title: Staff Acknowledgments
paragraphs: In addition to the contact named above, Rich Horiuchi (Assistant  Director), Erin Cohen (Analyst in Charge), Claire Buck, Jon Felbinger,  Stephanie Gustafson, Matthew Metz, Sylvia Schatz, and Roxanna Sun  made key contributions to this report.

Fast facts: The Department of Defense spends billions of dollars a year on satellites that provide critical communications, reconnaissance, and other capabilities.

We found that DOD may be able to save money and add capabilities faster by paying private companies to host government sensors or other equipment on their satellites. DOD estimates it has already saved hundreds of millions of dollars from this cost-sharing approach.

We recommended that DOD gather data in a central location from its programs that use these commercially hosted payloads. Assessing this data could help DOD make reasoned, evidence-based decisions on future host satellite use.

Question-summary annotations: questions: question: What is the purpose of a payload?
answer: GAO and others have found that using commercial satellites to host government sensors or communications packages—called payloads—may be one way DOD can achieve on-orbit capability faster and more affordably.
child_questions: question: What are payloads useful for?
answer: Using hosted payloads may also help facilitate a proliferation of payloads on orbit, making it more difficult for an adversary to defeat a capability.

question: What kinds if payloads does the DOD host?
answer: Since 2009, DOD has used three commercially hosted payloads, with three more missions planned or underway through 2022 (see figure below).

questions: question: What other opportunities to use hosted payloads has the GAO found?
answer: GAO found that further opportunities to use hosted payloads may emerge as DOD plans new and follow-on space systems in the coming years.
child_questions: question: Why can't these opportunities be described?
answer: However, DOD's knowledge on using hosted payloads is fragmented, in part because programs are not required to share information.

question: What office was created to help facilitate thislack of knowledge?
answer: In 2011, the Air Force created a Hosted Payload Office to provide expertise and other tools to facilitate matching government payloads with commercial hosts.

question: What did the GAO find out about DOD programs using hosted payloads?
answer: However, GAO found that DOD programs using hosted payloads are not required and generally do not provide cost and technical data, or lessons learned, to the Hosted Payload Office, or another central office for analysis. Requiring programs that use hosted payloads agency-wide to provide this information to a central location would better position DOD to make informed decisions when considering acquisition approaches for upcoming space system designs.

questions: question: What does the DOD spend billions of dollars a year to develop?
answer: Each year, DOD spends billions of dollars to develop, produce, and field large, complex satellites.
child_questions: question: How much damage to a satellite can a single attack result in?
answer: For such satellite systems, a single adversary attack or on-orbit failure can result in the loss of billions of dollars of investment and significant loss of vital capabilities.

question: What is a new acquisition approach the DOD is planning?
answer: As DOD plans new space systems and addresses an increasingly contested space environment, it has the opportunity to consider different acquisition approaches. One such approach is to integrate a government sensor or payload onto a commercial host satellite.