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110th Congress                                                   Report
                        HOUSE OF REPRESENTATIVES
 2d Session                                                     110-914

======================================================================



 
  REPORT ON CHALLENGES AND RECOMMENDATIONS FOR UNITED STATES OVERHEAD 
                              ARCHITECTURE

                                _______
                                

October 3, 2008.--Committed to the Committee of the Whole House on the 
              State of the Union and ordered to be printed

                                _______
                                

    Mr. Reyes, from the Permanent Select Committee on Intelligence, 
                        submitted the following

                              R E P O R T

                             together with

                     MINORITY AND ADDITIONAL VIEWS

    The Permanent Select Committee on Intelligence submits the 
following report on challenges and recommendations for United 
States overhead architecture.

                           Executive Summary

    The United States is losing its preeminence in space. A 
once robust partnership between the U.S. Government and the 
American space industry has been weakened by years of demanding 
space programs, the exponential complexity of technology, and 
an inattention to acquisition discipline. The U.S. Government 
created an environment that ensured the success of its space 
missions in the 1950s and 1960s. It provided appropriate 
funding and personnel needed to accomplish ambitious missions 
within a reasonable schedule. While the Government still has 
creative personnel, innovative ideas, and adequate funding, 
American dominance in space is diminishing. The purpose of this 
report is to find out why.
    The House Permanent Select Committee on Intelligence 
Subcommittee on Technical and Tactical Intelligence (TNT or 
Subcommittee) has studied the problems with our nation's 
overhead satellite architecture. The perceived failure of the 
Intelligence Community and Department of Defense (DOD) to 
develop an integrated overhead roadmap or architectural plan 
for the intelligence mission in space is the principle 
motivation for this study. Recent organizational changes and 
inter-departmental agreements involving the Office of the 
Director of National Intelligence (ODNI), the Department of 
Defense (DOD), and the National Reconnaissance Office (NRO) 
have highlighted the question of leadership of space 
acquisition programs.
    The Subcommittee produced this report to document the 
issues and challenges facing the development, acquisition, and 
execution of a space architecture to serve the demands of the 
U.S. Intelligence Community and DOD. This report examines the 
narrowing gap between U.S. capabilities and emerging space 
powers such as Russia, India, and China. Space continues to 
play an increasingly important role in supporting the national 
security interests of the United States. As the number and 
types of national security threats increase, the nation must 
continue to deliver space capabilities that provide policy-
makers and the war fighter with the information they need.
    The next few years are a defining moment for the United 
States. Experts in both industry and the executive branch were 
unanimous in their view that the United States is at an 
important crossroads with respect to its space architecture and 
that decisive action is required to chart a successful course 
to preeminence in space.

                                FINDINGS

    This study resulted in a compilation of Subcommittee 
recommendations that, if implemented effectively, will help 
restore space acquisition excellence and maintain the United 
States' position as the world's leader in space. There are five 
key areas of concern.
    First, there is no comprehensive space architecture or 
strategic plan that accommodates current and future national 
security priorities, DOD and Intelligence Community capability 
requirements, and budget constraints. The DNI and the Secretary 
of Defense need to develop this plan. The current trends with 
respect to the space constellation indicate that it will soon 
be incapable of satisfying the national security needs.
    Second, programs jointly funded in the National 
Intelligence Program (NIP) and Military Intelligence Program 
(MIP), requiring joint decisions by the DNI and DOD, result in 
delayed program starts. While having an appropriate space 
architecture will clarify the desired capabilities, the 
acquisition process would benefit greatly by moving away from 
joint funding and by having more clearly defined authorities.
    Third, research and development (R&D;) receives inconsistent 
funding despite the link between many failed acquisition 
programs and insufficient upfront R&D; investment. Research 
investments must be treated as a national security priority. 
Programs need to clearly define what needs to be accomplished 
in the R&D;, pre-acquisition, and development phases in order to 
have a successful satellite program.
    Fourth, the Government's expectations of the commercial 
data providers are inconsistent and ambiguous. The Intelligence 
Community and DOD must define more clearly the Govermment's 
expectation surrounding the use of commercial services and 
develop the systems needed to more easily access and deliver 
data to Government customers.
    Finally, current statutes and regulations may negatively 
impact the U.S. space industry. The U.S. Government must review 
the impact on the space industrial base of the International 
Traffic in Arms Regulations and other statutes and regulations 
that restrict space commerce to ensure that the effort to 
protect U.S. national security interests does not unnecessarily 
hinder the success of U.S. industry.
    This study is an important first step and the Subcommittee 
sincerely expresses its appreciation to the many experts that 
participated. The Subcommittee looks forward to continued 
support for space programs and to the implementation of changes 
that keep the United States preeminent in space.

              Summary of Key Subcommittee Recommendations


Overhead Architecture/Roadmap

     The Director of National Intelligence (DNI) and 
Secretary of Defense (SECDEF) should develop a common 
architecture for all space-related systems (imagery, signals, 
communications, etc.) that supports prioritized national and 
military needs and takes into consideration budget constraints. 
Organizations proposing new satellites should demonstrate how 
their proposals fit into the architecture.
     The DNI and SECDEF should agree to the 
architecture and related funding decisions. The SECDEF's 
agreement ensures that the Under Secretary of Defense for 
Intelligence (USD(I)) and the Under Secretary of Defense for 
Acquisition, Technology and Logistics (USD(AT&L;)) both agree 
with the strategy.
     The Office of Management and Budget (OMB) should 
carefully consider what space programs it recommends for 
funding until both the DNI and SECDEF agree on an architecture.

Authorities

     The executive branch should review and, as 
appropriate, recommend changes to the law and other authorities 
that clarify the DNI's role with respect to jointly funded 
programs.
     OMB should consider more closely what programs it 
decides to fund through the NIP and the MIP.

Requirements discipline

     Members of the DNI Mission Requirements Board 
(MRB) and the DOD Joint Requirements Oversight Council (JROC) 
should prioritize stakeholder needs and consider the impact of 
programmatic changes on cost and schedule.
     Program managers should ensure that stakeholders 
understand impacts of any change to program requirements. 
Program managers must be empowered and resourced to deny 
requests to change program requirements if their request would 
unacceptably impact cost, schedule, or system performance.
     Acquisition organizations should encourage less 
complex design solutions. If more complex technology or designs 
are needed, program managers should ensure that risk mitigation 
options are funded and captured in the schedule.

Research & Development

     The DNI and component agencies of the Intelligence 
Community should treat R&D; as a national security priority and 
keep R&D; funding stable. Agency leadership should protect long-
term R&D; funds from being used for immediate operational needs.
     The Deputy DNI/Acquisition and the DNI's Director 
of Science and Technology (DST) should define what technology 
maturation steps need to take place in an R&D; phase as opposed 
to in a pre-acquisition or development phase. The DDNI/
Acquisition should ensure the pre-acquisition phase gives ample 
consideration to defining technology and manufacturing 
maturity.
     Agencies should develop a technology transition 
roadmap to keep R&D; projects from sitting unused after they 
have been demonstrated to provide utility.
     The DDNI/Acquisition and individual program 
managers should balance the risk of using unproven technologies 
by considering the option of using less-capable, but well-
tested technology. The ODNI should develop policy governing the 
use of proven and immature technology.
     The DST should assess who in Government and in 
industry yield the best R&D; results and determine whether 
similar models would work well for the Intelligence Community's 
space-related R&D; programs.

Contracting and acquisition strategy

     The DDNI/Acquisition should examine the possible 
overuse of sole source contracting and its impact on the 
industrial base.
     The DDNI/Acquisition should explore the broader 
use of block buys where appropriate. This could mean having one 
vendor develop many systems, or it could mean having the 
Government play a larger role in acquisition by purchasing bulk 
parts on one contract and providing the parts as Government 
Furnished Equipment (GFE) to another contract. Sufficient 
information should be provided to Congress to allow it to 
assess the funding commitment required for a block buy and 
determine the feasibility of authorizing and appropriating 
funds in this way.
     The DDNI/Acquisition should work with Congress to 
determine the best way to structure a Nunn-McCurdy threshold 
for major systems acquisitions in the Intelligence Community in 
order to keep Congress better informed of acquisition cost 
growth.

Program management

     Acquisition organizations should embrace 
acquisition reform that develops and maintains qualified 
Government acquisition personnel while reducing dependence on 
systems engineering/technical assistance (SETA) contractors.
     The DDNI/Acquisition should mandate that 
sufficient margin is built into overall program cost during 
initiation of a complex program. The DDNI/Acquisition should 
review the track record of Intelligence Community independent 
cost estimates (ICEs) to determine if they have been providing 
adequate margin or if the risk assessment methodology needs to 
be adjusted.
     The DDNI/Acquisition should mandate longer tours 
for acquisition personnel supporting high priority, multi-year 
projects. If rotations are necessary, program offices should 
provide sufficient time for overlap and transition of 
responsibility.

Workforce development

     The DNI and SECDEF should address near-term 
workforce issues given the number of retirements that may occur 
in the next two to five years. The DNI should consider 
developing incentives to keep skilled, retirement-eligible 
workers on the job until new recruits can replace them; and 
determining to what extent security clearance and other hiring 
policies and practices are unnecessarily hindering the hiring 
of first- and second-generation scientists and engineers.
     Industry and Government should work together to 
encourage students to pursue science and engineering careers 
and ensure that there are ample opportunities for diverse 
experiences and growth. Recommended steps include:
           Enhancing partnerships with K-12 
        institutions to improve math and science education. For 
        example, the DNI should review and build upon the 
        National Security Agency (NSA) program that partners 
        employees with students from the local community to 
        enhance math, science, and foreign language training; 
        and
           Partnering with universities to prepare 
        students for space careers and working with 
        universities to align curriculum with future space 
        needs.
     Aerospace workforce trade groups should review 
whether retirement and other benefits could be more easily 
portable across the aerospace industry. This would help 
encourage contractors to view each other as partners in support 
of national security instead of as competing business 
interests.
     A joint panel comprised of employees from NRO and 
ODNI should assess the benefits and challenges of establishing 
a limited NRO career service. The panel should explore the 
viability of recruiting civilian program managers and system 
engineers to fill key leadership and program management roles, 
and offering mid-level to senior-level military officers with 
program management and system engineering experience an 
opportunity to join the career service.

Commercial space services

     A joint panel of the DDNI/Collection, NRO, 
National Geospatial-Intelligence Agency (NGA), and commercial 
data providers should assess whether any barriers impede the 
tasking or delivery of commercial imagery to potential users. 
If the panel identifies any technical barriers it should 
perform a cost-benefit analysis of removing those barriers. The 
panel should also seek to eliminate policy barriers that 
unnecessarily impede the use of commercial imagery services. 
The DNI and SECDEF should approach the use of other commercial 
services that serve Government, such as communications or other 
applications, in the same way.
     The DNI and SECDEF should recommend to the next 
President whether to strengthen or clarify National Security 
Presidential Directives 27 and 49 so that all acquisition 
organizations understand their responsibilities under these 
directives with respect to using commercial services.

Government restrictions on space-related commerce

     The DDNI/Acquisition should assess the impact that 
current laws and regulations, including International Traffic 
in Arms Regulations (ITAR), are having on the space industrial 
base, and it should report recommended changes to Congress.
     NGA, as the action agency for commercial remote 
sensing data to the DOD and Intelligence Community, should help 
ensure that the rules governing how commercial remote sensing 
is regulated do not impede the ability of this commercial 
industry to compete in international markets.

                              Introduction

    During the 110th Congress, the Committee held several 
hearings and numerous briefings to address the challenges 
associated with the nation's space architecture. Given the 
recognized importance of satellites for information and 
intelligence gathering, and the need for a healthy space 
constellation, the Subcommittee further explored space issues 
during a series of roundtables on the overhead architecture. 
Details of the roundtable methodology are provided in a 
subsequent section.
    The goal of this report is to capture the observations and 
recommendations obtained from participants and set forth 
Subcommittee recommendations on issues affecting the space 
architecture. Discussions with industry were previously 
documented in an interim report that was shared with industry 
participants and executive branch officials in February 2008. 
The interim report served as the basis for additional questions 
that were posed to the executive branch during their 
roundtables.
    The Committee has raised many of these issues before. In 
spite of bipartisan engagement within the Committee, the 
Administration appears to have ignored the language in multiple 
intelligence authorization bills, which identified the need to 
ensure longer tours for acquisition personnel, assess the use 
of advisory contractors, and develop a comprehensive 
architecture for space. The nation cannot afford to continue to 
ignore the issues that hamper the effective development and 
management of an integrated space architecture.
    The Subcommittee further notes the August 2008 release of 
the National Space Strategy Independent Assessment Panel 
Report, also known as the Allard Commission report. 
Subcommittee observations were previously shared with 
Independent Assessment Panel (IAP) members and are reflected in 
the Allard Commission report. The Subcommittee observes that 
many of the IAP's findings and some of the IAP's 
recommendations are similar to those captured in this report.

                              METHODOLOGY

    To address critical issues with the overhead architecture, 
the Subcommittee chairman chose to use a roundtable format to 
supplement the traditional format of hearings and briefings. 
The roundtable approach facilitated more open-ended discussions 
between members, outside participants, and staff. In contrast 
to a formal hearing, there were no time limits on questions or 
responses. Most importantly, views shared during the 
roundtables were not for attribution. As such, comments 
captured in this report are attributed to either ``industry 
participants'' or to ``executive branch participants'' rather 
than to the companies or individuals who made the statements.
    Industry participants included senior management from five 
U.S. satellite prime contractors, including Boeing, General 
Dynamics, Lockheed Martin, Northrop Grumman, and Raytheon. In 
addition, two U.S, commercial imagery providers, Digital Globe 
and Geo Eye, participated. Other input was received from Ball 
Aerospace, ITT Corporation, Orbital Sciences, and 
representatives from the Satellite Industries Association. In 
order to encourage open dialogue with industrial partners, the 
Subcommittee did not invite representatives from the executive 
branch to participate in the industry sessions.
    Two roundtable sessions were held with executive branch 
participants. The first roundtable included the Director of NGA 
and the Director of NRO. The second roundtable included the 
DNI, the USD(I), the Deputy Director of the NGA, the Deputy 
Director of National Intelligence for Acquisition (DDNI/
Acquisition), and the Deputy Director of National Intelligence 
for Collection (DDNI/Collection).
    The roundtable discussions were structured around questions 
provided to participants in advance of meetings (see Appendix 
B). These questions provided a framework for discussions 
without limiting the topics of conversation. The overarching 
goal was to elicit recommendations to develop an enduring 
overhead constellation, and to maintain a healthy aerospace 
industrial base and Government workforce.
    Executive branch participants were asked to comment on 
industry's findings and recommendations, in addition to 
offering their own recommendations. They were also asked to 
comment on whether any existing policies or laws were impeding 
their ability to accomplish their mission.
    Participant comments from each roundtable were analyzed by 
the Subcommittee to develop the findings and recommendations 
presented in this report.

                        COMPARISONS TO THE PAST

    Throughout the roundtable discussions, participants made 
repeated references to the way programs were managed in the 
past, drawing a comparison between what worked and what did 
not. These discussions made obvious reference to the national 
security environment of the Cold War period when a well-focused 
national security strategy existed to meet the Soviet nuclear 
threat. There was consensus that the Cold War threat, because 
of its intense focus, was in some regard easier to meet than 
today's multi-polar, asymmetric threat.
    In 1958, Congress passed the National Defense Education Act 
(NDEA) providing funding and motivation for U.S. colleges and 
universities to improve their technical curricula and produce 
more graduates. Today, many of the leading engineers who 
benefited from the NDEA are nearing retirement. Many roundtable 
discussions centered on the need for a new initiative, like the 
NDEA, to stimulate technology-related education.
    The threat of the Cold War created an environment of 
urgency within the space industry. Roundtable participants 
cited the passion of this era and the dedication to success 
that developed within the space industry. One participant 
stated, ``No one dreamed of slipping a schedule. We worked 
weekends, holidays and made important system decisions based on 
maintaining our launch date. Today, many program managers do 
not hesitate to slip a program milestone.'' This sense of 
urgency, coupled with more effectively defined requirements, 
well-defined decision authorities, strong program management, 
and effective contract management, will be necessary if the 
United States is to succeed.

          Key Detailed Roundtable Findings and Recommendations

    The following section captures the views of both industry 
roundtable participants and executive branch roundtable 
participants on topics relating to the development and 
acquisition of a space architecture. Where differences exist, 
they are noted. Subcommittee views are derived from analysis of 
roundtable participant input and independent research and are 
presented as a series of recommendations to the executive 
branch and to industry.

                         OVERHEAD ARCHITECTURE

    The need for an integrated overhead architecture has been 
articulated by Congress, the executive branch, and industry. 
Members of Congress have repeatedly expressed their 
disappointment that no architectural plan exists, and have 
repeatedly asked the Administration for the plan. The lack of 
an integrated architecture was one of the first issues to face 
the DNI after the office was established in 2005. The 
frustration has continued to this day, and many believe that 
the nation is no closer to having a clearly defined plan than 
it was three years ago.
    Although the executive branch participants believe that 
they have provided a plan for a future architecture, members of 
the Subcommittee disagree. Similarly, industry participants 
expressed frustration that the Administration has not provided 
a plan with sufficient detail to enable them to effectively 
focus their internal investments or align their business plans 
to meet Government's future needs.
    To better understand this difference of opinion, it seems 
prudent to address what Members expect from the Administration. 
The architecture must include four well-defined elements:
         A problem-driven approach that is based on 
        securing prioritized, well-defined national security 
        interests;
         A comprehensive solution that balances the 
        financial investment against the overall risk to 
        national security;
         A realistic delivery schedule that meets the 
        defined timeline that in many cases must be flexible 
        and updated against the risk; and
         A plan to migrate from a requirements-based 
        acquisition approach toward a capabilities-based 
        strategy, with the proviso that a purely capabilities-
        based approach could introduce additional challenges.
    Both industry and executive branch participants stated that 
the most important characteristic of the architecture is for it 
to include satellites owned by both DOD and the Intelligence 
Community. However, many participants expressed concern that 
some DOD personnel believe DOD needs its own space architecture 
to meet the needs of the war fighter. In response, executive 
branch participants stated several times that it is not in the 
best interest of the country to pursue separate national and 
military space architectures.
    Some executive branch participants suggested that space 
systems may not be best suited to meet the needs of the war 
fighter, but that space can still support the fight. It was 
suggested that advanced airborne capabilities best address the 
war fighters' needs and high resolution capabilities from space 
best address strategic intelligence needs. Based on current DOD 
plans, it is clear that DOD acquisition decision-makers do not 
agree. Recent funding decisions and the shifting of space 
programs from the NIP to the MIP exacerbate the issue. This 
specific issue is further discussed in the section on 
Authorities.

Recommendations on the Architecture

     The DNI and SECDEF should develop a common 
architecture for all space-related systems (imagery, signals, 
communications, etc.) that supports prioritized national and 
military needs and takes into consideration budget constraints. 
Organizations proposing new satellites should demonstrate how 
their proposals fit into the architecture.
     The DNI and SECDEF should agree to the 
architecture and related funding decisions. The SECDEF's 
agreement ensures that USD(I) and USD(AT&L;) both agree with the 
strategy.
     OMB should carefully consider what space programs 
it recommends for funding until both the DNI and SECDEF agree 
on an architecture.

                              AUTHORITIES

    Executive branch participants stated their concern over the 
dilution of authorities and accountability for acquisition 
decisions. Their concern focused particularly on programs 
funded jointly by the NIP and the MIP. The DNI tried to improve 
coordination with the DOD by creating a position for the USD(I) 
as Director of Defense Intelligence under the DNI.\1\ Although 
the USD(I) advocates for intelligence, the USD(I) does not have 
acquisition decision authority within the DOD. The USD(AT&L;) 
decides all acquisition matters. So for example, even if the 
USD(I) and the DNI decided on a single system that balanced 
both military and national users' needs, the USD(AT&L;) could 
decide on a different system that better served DOD needs (as 
interpreted by USD(AT&L;)). The inability of the USD(I) to 
control the final acquisition decision for a program can lead 
to decisions over jointly funded programs that do not equally 
benefit the national and military customer. Participants 
suggested that accountability and responsibility are dispersed 
when multiple individuals make decisions and that success is 
more easily achieved when it is clear who is in charge.
---------------------------------------------------------------------------
    \1\ ``Under Secretary of Defense for Intelligence to be Dual-Hatted 
as Director of Defense Intelligence.'' U.S. Department of Defense News 
Release No. 637-07. May 24, 2007.
---------------------------------------------------------------------------
    The Subcommittee notes that space is only one area in which 
there are potential authority conflicts. Public law currently 
requires shared decision authority for all national 
intelligence systems whose acquisition is managed by a DOD 
agency or office (NGA, NRO, NSA). To date, issues have been 
avoided because funding mainly comes from the NIP for many of 
these development activities. In the future, should other non-
space programs be jointly funded between the NIP and MIP, 
similar authority-related problems could be expected.

Recommendations on authorities

     The executive branch should review and, as 
appropriate, recommend changes to the law and other authorities 
that clarify the DNI's role with respect to jointly funded 
programs.
     OMB should consider more closely what programs it 
decides to fund through the NIP and MIP.

                        REQUIREMENTS DISCIPLINE

    Roundtable industry participants suggested that current 
satellite programs regularly fail to demonstrate requirements 
discipline. The inability of Government program managers to 
constrain requirements as satellite programs develop results in 
excessive cost increases, schedule delays, and performance 
compromises. Program managers, unwilling to deny requests to 
add previously unplanned capabilities to a satellite, will 
continue to expand the operational performance specifications 
of the satellite. They are further motivated to accept 
additional requirements because those advocating for the new 
requirement usually bring additional funding that is mistakenly 
believed to be an overall benefit to the program. This lack of 
dedication to the original program requirements increases 
program cost, delays the program's schedule, and degrades 
program performance.
    The Subcommittee identified four specific stumbling blocks 
to an efficient and effective requirements discipline.
    First and foremost, overhead programs lack adequate 
requirements definition. With so few satellites being launched, 
many Government organizations seek to add capability to a 
spacecraft well after the base requirements have been 
established and developed. This leads to a constantly evolving 
set of requirements that cannot be managed within current 
acquisition guidelines. Satellite requirements develop among 
multiple constituencies, without disciplined management to 
review and adjudicate potential change orders to programs. This 
``requirements creep'' costs millions of dollars and delays 
programs in a seemingly never-ending cycle of requirements 
review and engineering modifications.
    The undisciplined requirement phenomenon is discussed in 
the Report of the Defense Science Board/Air Force Scientific 
Advisory Board Joint Task Force on Acquisition of National 
Security Space Programs. According to that report, there was an 
increased use of space assets during the 1990s. Currently there 
are large numbers of operational users, including some with 
regional interests and niche missions. The user base continues 
to expand in response to the war on terrorism, bringing with 
them new requirements. For many programs, the net result has 
been dramatically increased requirements with ineffective 
systems engineering, insufficient financial impact assessments, 
or both, which in turn overwhelm the existing requirements 
management process.\2\
---------------------------------------------------------------------------
    \2\ Report of the Defense Science Board/Air Force Scientific 
Advisory Board Joint Task Force on Acquisition of National Security 
Space Programs, May 2003, p. 19.
---------------------------------------------------------------------------
    Second, the Intelligence Community and DOD seem at odds 
with each other over satellite program requirements. Without 
adequately defining the requirements of the combatant 
commanders, the Air Force and Intelligence Community are forced 
to hit an ever-moving or invisible target in managing overhead 
program requirements. When asked to list requirements that have 
not been satisfied by current systems, DOD did not identify a 
single unsatisfied intelligence need to the Committee.\3\ The 
competition between DOD and the Intelligence Community for 
mission-specific requirements must be better coordinated by the 
ODNI, USD(I) and USD(AT&L;).
---------------------------------------------------------------------------
    \3\ The Subcommittee acknowledges that some imagery products from 
the current national systems may be more difficult to share with DOD 
partners, but that is a policy failure, not a failure of the national 
systems to meet warfighter intelligence needs.
---------------------------------------------------------------------------
    Third, requirements for satellite programs are not 
developed in a manner consistent with technological maturity. 
Whatever the mechanism to bring more discipline to the 
satellite program management, it must acknowledge the 
limitations of technology. The powerful constituencies behind 
program requirements seek to capitalize on technology that is 
on the very leading edge of development. This increases both 
risk and cost, often without any significant enhancement in 
capability. Future programs must improve the management of 
untested technology with evaluations by known experts, not by 
those with a vested interest in the cost of the program. 
Additional information on this issue is captured under the 
research and development section.
    Fourth, the selection of complex system designs contributes 
to program risk without the benefit of enhancing system 
capability. Its impact is similar to the incorporation of 
immature technology. Technical experts and systems engineers 
must be consulted regularly in order to reduce the risk of 
system integration issues. The integration of immature 
technology into an overly complex system design is a recipe for 
failure.

Recommendations on requirements discipline

     Members of the DNI Mission Requirements Board 
(MRB) and DOD Joint Requirements Oversight Council (JROC) 
should prioritize stakeholder needs and consider the impact of 
programmatic changes on cost and schedule.
     Program managers should ensure that stakeholders 
understand impacts of any change to the requirements. Program 
managers should be empowered and resourced to deny requests to 
change program requirements if their acceptances would 
unacceptably impact cost, schedule, or system performance.
     Acquisition organizations should encourage less 
complex design solutions. If more complex technology or designs 
are needed, program managers should ensure that risk mitigation 
options are funded and captured in the schedule.

                        RESEARCH AND DEVELOPMENT

    R&D; was raised as an issue during nearly every roundtable. 
There is consensus among participants that more R&D; needs to be 
conducted and that the level of R&D; funding needs to be 
increased. Some participants suggested that as a goal, 10 
percent of an organization's budget, instead of the typical 
three to four percent, should be devoted to R&D.; Both industry 
and executive branch participants agree that competing 
programmatic challenges often make the 10 percent goal 
unreachable but a more realistic funding level may exist. 
Examples were given describing how challenging it is to fund 
space R&D; while the country is recovering from past space 
failures and also fighting two wars.
    The issue of inadequate R&D; maturation was raised by both 
industry and executive branch roundtable participants. 
Acquisition programs have suffered when they depended upon 
technologies that had not been fully matured prior to program 
initiation. There were diverging viewpoints regarding the 
integration of R&D; into ongoing program developments. Some 
participants suggested not allowing unproven technologies to be 
included within a program development; other participants 
suggested requiring technology insertion points, such that if a 
new technology is not ready by the time the insertion milestone 
is reached, that a proven technology be used instead.
    According to roundtable participants, a program acquisition 
cycle has three distinct phases: R&D;, pre-acquisition, and 
development. The purpose of R&D; is to show a path to the future 
and to allow mistakes to be made prior to entering the pre-
acquisition or development phase. It is too costly to encourage 
mistakes to be made once a program has committed to moving into 
development. The purpose of the pre-acquisition phase is to 
drive out risks and determine if a program is ready to enter 
full development. The Subcommittee observes that many of the 
current and historically troubled development efforts bypassed 
some of these steps, gave far less attention to early steps, or 
tried to rush the amount of time that steps were given.
    According to some participants, the space community stopped 
following this acquisition model due to political, budget, and 
schedule pressures. Participants cited examples of programs 
that did not spend enough time in the pre-acquisition phase 
before going into full development. When program managers 
discovered that significant technology development was needed, 
schedule and funding plans should have been addressed. Lower 
risk technology options should have been chosen, or should have 
been developed in parallel. As a lesson learned, executive 
branch participants now recommend using both Technology 
Readiness Level (TRL) and Manufacturing Readiness Level (MRL) 
metrics to determine the maturity and manufacturability of the 
technology. These metrics are reviewed at the senior 
Acquisition Readiness Boards where a decision is made to move 
forward in each acquisition phase.
    Some industry participants countered that many risks could 
be eliminated by choosing only mature technology and holding 
requirements firm. This group offered examples of successful 
satellite development efforts that used only parts with high 
TRLs and MRLs. Many of these examples were from companies 
providing commercial services, where cost overruns more 
directly impact company profit. Some industry participants 
suggested that contract proposals should be evaluated and 
awarded based on current capabilities, not assertions of future 
capabilities, unless the Government can tolerate the risk. 
Other industry participants countered that the nation has only 
excelled to date because it took risks with leading edge 
technologies. Both industry and the executive branch agreed 
that the high risk technology model can work, but the 
Government must invest sufficiently and provide enough schedule 
margin to manage the risk.
    There is a perception by some industry participants that 
the Intelligence Community has become risk averse because of 
the way the Government chooses to invest in technology. They 
suggested that typically, by the time a contract is awarded for 
a new system, the customer's needs have become time critical. 
As a result, schedules are often compressed to a point that no 
failure can be tolerated.
    Both groups stated that in some cases it makes sense to 
demonstrate a technology and validate that it meets customer 
requirements prior to requiring its use in an operational 
system. Executive branch participants noted that while 
demonstrations are useful for some technologies, not every 
system needs to be demonstrated. They also noted that when it 
comes to funding operational systems and demonstrations, 
demonstrations often lose in the battle over funding.
    Participants gave examples of organizations that 
simultaneously support both evolutionary and revolutionary 
technology improvements. They described how evolutionary 
changes build upon the success of operational systems, while 
revolutionary changes pave the way for future operational 
programs. Industry participants further noted that by having 
more R&D; in the pipeline, not only is there room for failure, 
but there is added stability for industry. They noted that 
having more projects supports having more technology options 
from which to choose future operational systems.
    Some industry participants noted that the Intelligence 
Community would benefit from allowing more organizations to 
participate in Government R&D; efforts, specifically by allowing 
multiple contractors to work on the same R&D; projects. The 
government would then have the ability to choose the best 
option while giving more than one company an opportunity to win 
future bids to manufacture the delivered prototype. This option 
boosts competition by not giving one company a competitive 
advantage.
    Some industry participants suggested that the Intelligence 
Community can learn from organizations like the Defense 
Advanced Research Projects Agency (DARPA) that specialize in 
R&D; and technology transition. They state that the DARPA model 
has worked well for leading-edge military technology. It 
encourages a ``spirit of innovation'' by providing a statement 
of concept rather than set requirements. DARPA often funds 
multiple contractors, selects the best prototypes, and works to 
transition the technology to a partner/sponsor.
    The Intelligence Community recently formed the Intelligence 
Advanced Research Projects Activity (IARPA). Industry 
participants stated that the success of IARPA will ultimately 
depend upon several factors which include, but are not limited 
to, a continued focus on leading-edge, intelligence related 
R&D; good leadership; effective cross-community coordination; 
and a sustained funding commitment. Executive branch 
participants suggested that IARPA can play a role in ensuring 
that R&D; is a priority in the Intelligence Community. They also 
noted that there will be tension between the agencies and 
IARPA, much like between the military services and DARPA, but 
the DNI must continue to work toward effective communication 
between IARPA and the rest of the Intelligence Community.

Recommendations on R&D;

     The DNI and component agencies of the Intelligence 
Community should treat R&D; as a national security priority and 
keep R&D; funding stable. Agency leadership should protect long-
term R&D; funds from being used for immediate operational needs.
     The DDNI/Acquisition and the DNI's Director of 
Science and Technology (DST) should define what technology 
maturation steps need to take place in an R&D; phase as opposed 
to a pre-acquisition phase or development phase. The DDNI/
Acquisition should ensure the pre-acquisition phase gives ample 
consideration to defining technology and manufacturing 
maturity.
     Agencies should develop a technology transition 
roadmap to keep R&D; projects from sitting unused after they 
have been demonstrated to provide utility.
     The DDNI/Acquisition and individual program 
managers should balance the risk of using unproven technologies 
by considering the option of using less-capable, but well-
tested technology. The ODNI should develop policy governing the 
use of proven and immature technology.
     The DST should assess who in the Government and in 
industry yield the best R&D; successes and determine whether 
similar models would work well for the Intelligence Community's 
space-related R&D; programs.

                  CONTRACTING AND ACQUISITION STRATEGY

    Once all the other necessary components such as defined 
requirements, R&D; and pre-acquisition efforts are in place, all 
participants agreed that the choice of contract vehicle, the 
method of competition and source selection, and the acquisition 
strategy will all have an impact on space systems acquisition.
    When little development work is needed and the requirements 
are clear, a firm, fixed price contract should be considered. 
For a higher risk development, reimbursing for cost while 
providing performance, cost, or schedule incentives would be a 
better option (i.e., cost plus award or incentive fee 
contract). Participants cited examples of both successful and 
unsuccessful fixed price and cost-plus contracts. Fixed price 
contracts are used by both larger defense contractors and by 
commercial data providers (CDPs) who purchase their own 
satellites to sell imagery products to the Government. 
Participants noted that CDPs tend to use this contracting 
strategy more often.
    One element of the acquisition strategy that can 
significantly impact efficiency and cost effectiveness is the 
buying strategy. Industry participants note that the Government 
often does not employ efficient buying strategies. It is clear 
that greater savings can occasionally be realized by purchasing 
multiple satellites on a single contract, also known as a 
``block buy.'' In these cases, the pass-through cost charged by 
the prime contractor to procure sub-components could be 
reduced.\4\ Block buying is a method of contracting which 
covers more than one year's requirements as an alternative to a 
series of annual contracts. Block buying frees manufacturers 
from having to make smaller, more costly piecemeal buys and 
thus promises to reduce overall costs.\5\ Industry participants 
note that past use of this acquisition strategy benefited the 
Government by saving money and improving contractor 
productivity.
---------------------------------------------------------------------------
    \4\ The history of block buys dates back to the 1960s. However, 
several cancellations and funding overruns during the 1970s caused this 
strategy to fall out of favor with Congress. In the early 1980s, with 
the passage of section 909 of the Department of Defense Intelligence 
Authorization Act for Fiscal Year 1982 (Public Law No. 97-86), this 
acquisition approach became viable once again.
    \5\ Multi-year Procurement, A Desktop Guide, David R. Sutton, June 
1997.
---------------------------------------------------------------------------
    The satellite business is, however, not a volume business; 
it does not produce thousands of copies to reduce manufacturing 
costs. Nevertheless, industry and executive branch roundtable 
participants maintained that there were potential cost savings 
and benefits, and were strongly in favor of using block buys 
whenever possible. They cited examples of programs that use 
this strategy to reduce costs, limit risk, and stabilize the 
subcontractor base.
    Some industry participants complained that recent satellite 
acquisitions had not been chosen through a competitive 
selection; rather, they had been sole sourced to a subset of 
contractors frequently used by satellite acquisition 
organizations. Given this lack of competition, these industrial 
participants suggested that upcoming contract decisions may 
determine the number of satellite prime contractors that 
survives into the future. These same contractors stated that 
limited experience should not be used to keep qualified 
contractors from winning contracts. The counterargument was 
also offered that significant past performance should enable 
the use of sole source contracting when evolved versions of 
current systems are being procured. These participants 
suggested in these cases that sole source contracts save the 
Government both time and money.
    Executive branch and some industry participants provided 
examples of programs that ran into challenges because a 
contract was awarded to a company that had little experience 
building the type of system desired by the Government. If the 
executive branch chooses to issue contracts to companies 
without demonstrated successes with similar technology, it must 
improve the initial assessments of the technology maturity and 
manufacturability (as described in the R&D; section). The 
executive branch must also ensure that sufficient resources are 
applied and that realistic milestones are set.
    The Defense Science Board previously reported that the 
``space acquisition system is strongly biased to produce 
unrealistically low cost estimates . . . [that] lead to 
unrealistic budgets and unexecutable programs.'' \6\ Roundtable 
participants agree that this still appears to be an issue that 
must be addressed. The firm, fixed price approach to satellite 
development with well-defined system requirements has become a 
very attractive approach for the Government to consider as a 
way to avoid low cost estimates. Because the contract price 
directly impacts company profits, realistic proposals are more 
likely to be received.
---------------------------------------------------------------------------
    \6\ Report of the Defense Science Board/Air Force Scientific 
Advisory Board Joint Task Force on Acquisition of National Security 
Space Programs, May 2003, p. 19.
---------------------------------------------------------------------------
    The Subcommittee finds that while the way a contract is 
selected is important, the oversight of the contract will also 
affect the contract's success. The Intelligence Community can 
potentially learn from the implementation of the Nunn-McCurdy 
Amendment as a mechanism to reign in cost-overruns at DOD.\7\ 
The Nunn-McCurdy Amendment requires DOD notification of the 
SECDEF and Congress if costs increase by a threshold of 15 
percent over current baseline estimates or 30 percent over 
original baseline estimates. Additional financial repercussions 
exist if the higher threshold of 25 percent and 50 percent to 
the aforementioned baselines is reached. The DNI has 
implemented policy within Intelligence Community Program 
Guidance 105.1 \8\ that requires notification to the OMB and to 
the ODNI for growth over 15 percent.
---------------------------------------------------------------------------
    \7\ The threshold was named after Senator Sam Nunn and 
Representative David McCurdy, who proposed cost growth control 
legislation as an amendment to the Department of Defense Authorization 
Act for Fiscal Year 1982 (Public Law No. 97-86). It was later made 
permanent in the Department of Defense Authorization Act for Fiscal 
Year 1983 (Public Law No. 97-252).
    \8\ IC Program Guidance 105.1 on Acquisition was released on July 
12, 2007.
---------------------------------------------------------------------------
    Since the Intelligence Community has no similar statutorily 
mandated cost growth threshold requiring notification to 
Congress, the House and Senate agreed to include a provision 
similar to Nunn-McCurdy in the Intelligence Authorization Act 
for Fiscal Year 2008. More recently, the House version of 
Intelligence Authorization Act for Fiscal Year 2009 required 
the DNI to work with Congress to tailor threshold legislation 
for the Intelligence Community in order to rectify the 
differences in DOD and Intelligence Community acquisition 
regulations.

Recommendations on contracting

     The DDNI/Acquisition should examine the possible 
overuse of sole source contracting and its impact on the 
industrial base.
     The DDNI/Acquisition should explore the broader 
use of block buys where appropriate. This could mean having one 
vendor develop many systems, or it could mean having the 
Government play a larger role in acquisition by purchasing bulk 
parts on one contract and providing the parts as Government 
Furnished Equipment (GFE) to another contract. Sufficient 
information should be provided to Congress to allow it to 
assess the funding commitment required for a block buy and 
determine the feasibility of authorizing and appropriating 
funds in this way.
     The DDNI/Acquisition should work with Congress to 
determine the best way to structure a Nunn-McCurdy-like 
threshold for major Intelligence Community systems 
acquisitions, to better keep Congress informed of acquisition 
cost growth.

                           PROGRAM MANAGEMENT

    Roundtable participants suggested that a well-managed 
program displays several common characteristics, including an 
experienced Government team led by an experienced program 
manager; an experienced industry team led by an experienced 
program manager; open communication between the two teams; 
ample resources; sufficient margin; and clear lines of 
authority and accountability within each team.
    Both industry and Government roundtable participants noted 
that the ranks of experienced Government program managers began 
to decrease in the 1990s with the downsizing of the defense 
budget. Simultaneously, there was a push to accomplish more 
with less resources; this included a push to rely more on 
contractors and less on Government expertise. The result was 
Contractor Total System Performance Responsibility (TSPR).\9\ 
TSPR was ``originally used as a contract condition for the 
acquisition of new systems that obligated the prime contractor 
to be totally responsible for the complete integration of an 
entire weapon system. The idea of contractor TSPR was to ensure 
that the Government received an integrated system that would 
meet the performance requirements as defined in the system 
specification.'' \10\
---------------------------------------------------------------------------
    \9\ ``Reexamining Military Acquisition Reform: Are We There Yet?'' 
C. H. Hanks, E. I. Axelband, S. Lindsay, M. R. Malik, B. D. Steele. 
Prepared for the United States Army by the RAND Corporation, 2005.
    \10\ Ibid.
---------------------------------------------------------------------------
    Both the industry and executive branch participants agreed 
that during this TSPR period, reliance on support contractors, 
also known as systems engineering/technical assistance (SETA), 
increased dramatically. Both groups agreed that Government 
personnel became less able to make technical decisions on their 
own. The desire to build ``faster, better, cheaper'' systems 
led the Government down a path that required the contractor to 
oversee itself and make decisions that were better suited to 
Government personnel. Participants stated that this dependence 
has become a source of frustration for both the satellite 
developers and the Government. From the satellite developers' 
perspective, the Government's domain expertise and technical 
qualifications were replaced by an overly bureaucratic process 
and increased paperwork. Executive branch participants stated 
that many experienced program managers left the Government 
because their skills were no longer valued. Many employees left 
aerospace altogether.
    The DNI created the DDNI/Acquisition position to 
reestablish program management skills, stabilize funding, and 
manage requirements within the Intelligence Community. The 
Subcommittee believes that efforts must continue to reestablish 
acquisition excellence, such as the enforcement of acquisition 
Intelligence Community Directive (lCD) 105 \11\ and 
Intelligence Community Program Guidance (ICPG) 105.1, and the 
annual report to Congress of acquisition program management 
plans.
---------------------------------------------------------------------------
    \11\ IC Directive 105 on Acquisition was released on August 15, 
2006.
---------------------------------------------------------------------------
    Both groups complained that executive branch and industry 
program managers do not have adequate funding margins to 
accommodate unexpected problems that typically arise during the 
course of a complex development effort. They described how this 
sometimes results in program managers having insufficient funds 
to address these unanticipated challenges and choosing not to 
communicate problems to senior leadership in an attempt to 
``keep the program going'' with the faint hope that things will 
work out over time. Some participants recommended maintaining 
up to a 20 percent margin to protect against unexpected issues 
and to further motivate program managers to communicate 
problems to leadership.
    The Subcommittee observes that the Intelligence Community 
has only been consistently funding the DNI's Independent Cost 
Estimates (ICE) for a few years; the cited instances of 
insufficient margin may pre-date this practice. However, the 
component agencies of the Intelligence Community should be 
compiling a track record of its ICEs compared to actual program 
costs and making appropriate adjustments. In particular, the 
DNI should ascertain whether its ICEs are making sufficient 
provision for risk and ``unknown unknowns.'' If not, and the 
cause is not determined to be an underlying issue such as the 
previously discussed rush of immature technologies into 
acquisition, then the methodology must be adjusted or the 
programs must be formally allowed to program additional margin. 
The results of the track record comparisons and any adjustments 
that have been made should be briefed to the congressional 
oversight committees at least every five years.
    Industry participants further observed that Government 
acquisition personnel frequently rotate during the life of the 
average satellite development program, They note that most 
personnel changes involve loss of program knowledge and often 
require the new employee to come up to speed very quickly. 
Continuity benefits both the Government team and the industry 
team that supports them; an effort is needed to maintain 
personnel on programs or ensure that continuity is maintained.

Recommendations on program management

     Acquisition organizations should embrace 
acquisition reform that develops and maintains qualified 
Government acquisition personnel while reducing dependence on 
systems engineering/technical assistance (SETA) contractors.
     The DDNI/Acquisition should mandate that 
sufficient margin is built into overall program cost during 
initiation of a complex program. The DDNI/Acquisition should 
review the track record of Intelligence Community ICEs to 
determine if they have been providing adequate margin or if the 
risk assessment methodology needs to be adjusted.
     The DDNI/Acquisition should mandate longer tours 
for acquisition personnel supporting high priority, multi-year 
projects. If rotations are necessary, program offices should 
provide sufficient time for overlap and transition of 
responsibility.

                         WORKFORCE DEVELOPMENT

    Roundtable participants agreed that the influence of the 
United States in world affairs is supported by its leadership 
in space. In order to maintain its standing, the United States 
must overcome three significant challenges relating to the 
development of the aerospace workforce. First, space systems 
are becoming ever more complex with new technologies posing 
engineering and scientific challenges; employees must be 
trained to understand the new challenges. Second, the space 
workforce is facing a significant loss of talent and expertise 
due to pending retirements and the challenge exists to smoothly 
transition to a new space workforce. Third, colleges and 
universities are graduating fewer scientists and engineers who 
are U.S. citizens. Creative solutions are needed to encourage 
more graduates and to recruit those who are already trained but 
who are not supporting the Intelligence Community.
    Experts in the field of space leadership suggest that an 
important element is education and training. This is a 
foundational issue for anything the United States wants to do 
in space now and in the future.\12\ A healthy industrial base 
depends on a capable workforce that can take on increasing 
engineering and scientific challenges. The Subcommittee 
believes that both industry and the U.S. Government must ensure 
that adequate employee development and continuing education 
opportunities exist to keep all personnel abreast of new 
technology.
---------------------------------------------------------------------------
    \12\ ``Space policy questions and decisions facing a new 
administration,'' The Space Review, Eligar Sadeh, June 9, 2008.
---------------------------------------------------------------------------
    Subcommittee research shows that while engineering and 
scientific challenges are ever present, current losses of 
talent and expertise require immediate attention and directly 
affect development of the space workforce. In 2007, an analysis 
completed by Aerospace Corporation concluded that the national 
security space workforce has eroded significantly over the last 
decade. They found that employment in the U.S. aerospace and 
defense industry totaled 1.1 million employees in 1990 but 
dropped to 584,000 by 2003.
    Compounding the loss of personnel is the fact that much of 
the aerospace and defense industry workforce is nearing or has 
reached retirement age. According to the Aerospace Industries 
Association, the average aerospace/defense engineer in the 
United States is nearly 60 years old. Today, approximately 27 
percent of employed engineers are eligible for retirement and 
the number of employees with science and engineering degrees 
reaching traditional retirement age will triple during the next 
decade. This demographic shift in the aerospace/defense 
population, coupled with increased research, development, and 
procurement spending, has led to the most fundamental 
industrial base concern for the defense industry: a lack of 
skilled and experienced scientists and engineers.\13\
---------------------------------------------------------------------------
    \13\ Crosslink, The State of the National Security Space Workforce, 
Patricia Maloney and Michael Leon, Spring 2007.
---------------------------------------------------------------------------
    An additional complicating factor in the development of the 
U.S. space workforce involves the number of American students 
receiving engineering and scientific degrees. A senior Defense 
Acquisition University (DAU) official stated that the 
acquisition community as a whole is facing a serious 
demographic problem. Other sources suggest that close to 30 
percent of all graduate students in science and engineering 
disciplines at U.S. universities and colleges are foreign 
nationals. At the post-doctorate level, the percentage of 
foreign nationals in science and engineering disciplines climbs 
to 60 percent.\14\
---------------------------------------------------------------------------
    \14\ The Space Review, Essays and Commentary about the final 
Frontier, Eligar Sadeh, June 9, 2008.
---------------------------------------------------------------------------
    Long-term trends show that fewer U.S. students are entering 
engineering programs. Although college attendance is 
increasing, the interest U.S. high school seniors express in 
engineering has remained flat in recent years. There will be 
more jobs available than candidates because of the strict 
security clearance requirements mandated for national security 
employment and the general lack of available students 
graduating with technical degrees. New initiatives are needed 
to increase graduation rates in science, technology, 
engineering, and mathematics (STEM) fields. New policies are 
needed to better recruit citizens with technical degrees that 
have had difficulty entering the Intelligence Community.
    NRO has its own unique workforce development issues. 
Programs initiated in the 1990s ``outsourced Government 
oversight,'' \15\ which resulted in a loss of talent and 
experience and removed the Government program offices from day-
to-day program management. Roundtable participants discussed 
the fact that the NRO does not have its own workforce. Some 
executive branch participants suggested that the NRO may need a 
small but dedicated workforce, such as an NRO career service, 
to provide stability.
---------------------------------------------------------------------------
    \15\ ``Reexamining Military Acquisition Reform: Are We There 
Yet?'', 2005, C. H. Hanks, E. I. Axelband, S. Lindsay, M. R. Malik, B. 
D. Steele. Prepared for the United States Army by the RAND Corporation.
---------------------------------------------------------------------------
    Roundtable participants also noted other factors affecting 
workforce development. They stated that many engineers find 
that the work in the satellite industry is repetitive and 
sporadic. New engineers who choose aerospace careers are not 
attracted to building identical models of existing satellites. 
Because new engineering graduates perceive the space industry 
as very cyclical, they enter the industry already looking for 
frequent career changes. Long program timelines prohibit some 
engineers from ever seeing a completed mission. In addition, 
the participants stated that current relationships between 
satellite developers are very competitive. Limited budgets 
supporting multiple large projects drive companies to believe 
that they must win business at all cost. Participants gave 
examples of how limited pools of talented personnel are 
sometimes lured from one company to another depending on who 
wins a contract; the Government usually has to pay the added 
salary costs.
    However, the majority of the workforce is left to their own 
devices when contract work shifts between companies. Many 
workers lose valuable benefits and become frustrated when 
forced to move. The Subcommittee believes that portable 
benefits could minimize the frustration for employees who must 
move between companies due to a loss of a contract or other 
downsizing,

Recommendations on workforce development

     The DNI and SECDEF should address near term 
workforce issues given the number of retirements that may occur 
in the next two to five years. The DNI should consider 
developing incentives to keep skilled, retirement eligible 
workers on the job until new recruits can replace them; and 
determining to what extent security clearance and other hiring 
policies and practices are impacting the hiring of first- and 
second-generation scientists and engineers.
     Industry and Government should work together to 
encourage students to pursue science and engineering careers 
and ensure that there are ample opportunities for diverse 
experiences and growth. Recommended steps include:
           Enhancing partnerships with K-12 
        institutions to improve math and science education. For 
        example, the DNI should review and build upon the 
        National Security Agency program that partners 
        employees with students from the local community to 
        enhance math, science, and foreign language training.
           Partnering with universities to prepare 
        students for space careers and working with 
        universities to align curricula with future space 
        needs.
     Aerospace workforce trade groups should review 
whether retirement and other benefits could be more easily 
portable across the aerospace industry. This would help 
encourage contractors to view each other as partners in support 
of national security instead of as competing business 
interests.
     A joint panel comprised of employees from the NRO 
and ODNI should assess the benefits and challenges of 
establishing a limited NRO career service. The panel should 
explore the viability of recruiting civilian program managers 
and system engineers to fill key leadership and program 
management roles, and offering mid- to senior-level military 
officers with program management and system engineering 
experience an opportunity to join the career service.

                    USE OF COMMERCIAL SPACE SERVICES

    The inclusion of industry representatives from both 
traditional defense contractors and commercial service 
providers ensured that the Intelligence Community's use of 
commercial services was addressed extensively. The Government 
purchases services from both commercial communications (both 
space and ground based) and commercial remote sensing 
companies.
    National Security Presidential Directive (NSPD) 27: ``U.S. 
Commercial Remote Sensing Space Policy'' (2003), and NSPD 49: 
``U.S. National Space Policy'' (2006) both dictate that 
commercial imagery services must be used where applicable and 
affordable. NSPD 49 states:

          Use U.S. commercial space capabilities and services 
        to the maximum practical extent; purchase commercial 
        capabilities and services when they are available in 
        the commercial marketplace and meet United States 
        Government requirements; and modify commercially 
        available capabilities and services to meet those 
        United States Government requirements when the 
        modification is cost effective.

    On the surface, this guidance is clear. In practice, the 
Commercial Data Providers (CDPs) suggest that they often 
struggle for inclusion in the Intelligence Community's pool of 
satellite imagery providers. They state that Government 
investment in commercial services, as opposed to Government 
purchase of Government-owned high-resolution systems, has been 
limited.
    Participants agreed that commercial imagery services are a 
complementary capability that contributes substantially to 
national security. Despite this acknowledgement, executive 
branch participants suggested that commercial services had 
significant limitations that prevented them from being used 
more frequently to satisfy Government needs.
    CDPs state that one reason given by Government customers 
for their reluctance to rely on commercial imagery is the lack 
of ``assured access.'' Assured access is loosely defined as the 
ability of the customer to collect and receive data whenever it 
is needed, including the ability to be prioritized over other 
customers. Executive branch participants seem to believe that 
the Government is only assured access to systems that it 
physically owns. The commercial providers believe that a 
contractual agreement would afford the same assurance.
    Commercial providers have heard that potential customers 
believe that it takes longer to task and receive imagery from 
commercial systems. The executive branch is responsible for 
both the tasking and dissemination of commercial data to 
Government customers. They are also responsible for the 
requirements levied on CDPs that enable the dissemination of 
their data to those customers. Given where the control lies, 
Subcommittee members question whether CDPs' inability to 
satisfy all users is driven more by the constraints imposed on 
them, rather than by anything inherently related to a 
commercial service. To eliminate the argument, tasking and 
dissemination systems will need to improve to enable commercial 
providers to better support DOD and customers in the 
Intelligence Community.
    CDPs report that some Government agencies have not invited 
them to bid on high resolution systems. At times these 
Government agencies have restricted proposals to Government-
owned systems and not considered whether a commercial service 
can satisfy the need. Agency general counsels should review the 
legality of this limitation. Members question why the best 
solution would not become apparent after an open competition. A 
decision based on a balance between the proposed technology, 
the total cost (including Government personnel in the case of a 
Government-owned solution), and the past experience of the 
bidder in developing a system of the same caliber, should 
provide the best outcome.

Recommendations on the use of commercial space services

     A joint panel of the DDNI/Collection, NRO, NGA, 
and commercial data providers should assess whether any 
barriers impede the tasking or delivery of commercial imagery 
to potential users. If the panel identifies any technical 
barriers, it should perform a cost-benefit analysis of removing 
those barriers. The panel should also seek to eliminate policy 
barriers that unnecessarily impede the use of commercial 
imagery services. The DNI and SECDEF should approach the use of 
other commercial services that serve Government, such as 
communications or other applications, in the same way.
     The DNI and SECDEF should recommend to the next 
Administration whether to strengthen or clarify NSPD 27 and 49 
so that all acquisition organizations understand their 
responsibilities under these directives with respect to using 
commercial services.

           GOVERNMENT RESTRICTIONS ON SPACE-RELATED COMMERCE

    The Subcommittee was surprised by the frequency with which 
the International Traffic in Arms Regulations (ITAR) were 
identified by both industry and the executive branch as an 
impediment to technology development. ITAR, which is managed by 
the State Department, is intended to protect sensitive 
technologies and information from being transferred to nations 
deemed a potential security risk. Government and industry 
participants described how ITAR has motivated European 
companies to establish an international (non-U.S) collaborative 
R&D; environment where ITAR-banned technologies are produced 
indigenously, thereby defeating the premise of ITAR.\16\
---------------------------------------------------------------------------
    \16\ EADs and Alcatel are two companies that have profited by 
selling ITAR-free technology.
---------------------------------------------------------------------------
    Government and industry participants asserted that U.S. 
corporations are experiencing a loss of market share from 
openly marketed ITAR-free products and services. They further 
stated that the ITAR-free market may soon provide foreign 
countries with capabilities that match some of those of the 
United States, further placing U.S. companies at risk.
    Commercial data providers also suggested that the U.S. 
Government has imposed on them significant legal restrictions 
as part of its oversight. CDPs are concerned that U.S. 
restrictions on the sale of commercial imagery are beginning to 
inhibit their growth and their competitiveness in foreign 
markets, especially as foreign imagery satellites improve and 
foreign reliance on U.S. systems diminishes.\17\
---------------------------------------------------------------------------
    \17\ Currently commercial companies are operating under a 
panchromatic resolution restriction of 0.5 m, meaning that companies 
cannot sell data of higher resolution to non-U.S. Government entities 
without approval. The National Oceanic and Atmospheric Administration's 
licensing office states that resolution restrictions are ``subject to 
change based upon foreign availability and other considerations.''
---------------------------------------------------------------------------

Recommendations on Government restrictions on space-related commerce

     The DDNI/Acquisition should assess the impact that 
current laws and regulations, including International Traffic 
in Arms Regulations (ITAR), are having on the space industrial 
base, and it should report recommended changes to Congress.
     NGA, as the action agency for commercial remote 
sensing data to the DOD and Intelligence Community, should help 
ensure that the rules governing how commercial remote sensing 
is regulated do not impede the ability of this commercial 
industry to compete in international markets.\18\
---------------------------------------------------------------------------
    \18\ NGA participates in the Advisory Committee on Commercial 
Remote Sensing (ACCRES), which provides information, advice, and 
recommendations to the Under Secretary of Commerce for Oceans and 
Atmosphere on matters relating to the U.S. satellite commercial remote 
sensing industry.
---------------------------------------------------------------------------

                              Conclusions

    The good news is that the United States has an enduring 
space legacy. Many of the characteristics that made the 
aerospace industry great in the past still exist.
    Some of the issues facing the aerospace industry have 
existed for many years; for example engaging and training 
personnel, stabilizing funding, ensuring open competitions that 
yield the best value to the Government, and minimizing agency 
duplication of efforts. In recent years, the industry has been 
forced to tackle new challenges such as jointly-funded programs 
with unclear authorities, significant numbers of retiring 
professionals, insufficient engineers/scientists graduating 
from colleges and universities, and failed programs that 
continue to plague current development efforts years after 
their termination.
    The executive branch has a choice. It can keep doing things 
the way it is currently doing them, or it can respond to 
Congress with a plan that clearly prioritizes and outlines all 
user requirements against a timeline that shows how the 
proposed systems fit into a funding-constrained architecture. 
Such a step will help bring stability to the aerospace 
community, both Government and industry. Admittedly, not 
everyone will be happy, but everyone will understand the 
roadmap, where they fit in, and where they can best contribute.
    Fixing the issues that exist will not take a monumental 
effort like the ``Manhattan Project,'' but it will take a 
paradigm shift. Both Government and industry will need to step 
away from their respective parochial interests. It will take 
great integrity for leaders to make decisions, not from where 
they sit in the hierarchy, but from a desire to do what is best 
for the nation. The Committee is ready to support such an 
effort.
                               APPENDICES

                  Appendix A: Roundtable Participants

Industry
    Boeing
    Digital Globe, Inc.
    General Dynamics
    Geo Eye
    Lockheed Martin
    Northrop Grumman
    Raytheon Company
Other industry sources
    Ball Aerospace and Technology Corporation
    ITT Corporation
    Orbital Sciences
    Satellite Industry Associates
Executive branch
    Director of National Intelligence
    Under Secretary of Defense for Intelligence
    Director, National Geospatial-Intelligence Agency
    Director, National Reconnaissance Office
    Deputy Director, National Geospatial-Intelligence Agency
    Deputy Director of National Intelligence for Acquisition
    Deputy Director of National Intelligence for Collections

         Appendix B: Questions Posed to Roundtable Participants

Questions for industry participants
    1. What recommendations would your company make to the DNI 
as the best way ahead for our overhead architecture?
    2. What key issues, if any, are being overlooked by the 
Intelligence Community with respect to the way ahead decision? 
Do you foresee any paths being considered that are technically 
or programmatically dangerous?
    3. Recognizing the importance of technical employees 
entering and remaining in the aerospace industry for the 
success of any program, how would you invest our nation's 
resources to insure a healthy industrial base both now and in 
the future? How is your company ensuring it has access to 
sufficiently skilled technical employees?
Additional topics for executive branch participants
    1. Best practices for managing system level requirements;
    2. The role and importance of maintaining a stable research 
and development program which matures technologies in advance 
of initiating an acquisition;
    3. The role of commercial imagery in the Intelligence 
Community and Department of Defense;
    4. The need for improved contract and program management;
    5. Interagency collaboration and the challenges associated 
with the acquisition of satellites and the acquisition of the 
tasking, collection, processing, and exploitation and 
dissemination systems; and
    6. Challenges that are influenced by current policies or 
authorities.

                             MINORITY VIEWS

  REPORT: ``CHALLENGES AND RECOMMENDATIONS FOR UNITED STATES OVERHEAD 
                             ARCHITECTURE''

    We cannot support this report in its current form. It is 
unfortunate that it fails so completely to represent the 
countless hours of time invested by Committee Members and 
staff, along with private sector and Executive Branch 
representatives to explore the shortfalls of satellite 
intelligence collection programs--America's ``overhead 
architecture''. These serious shortcomings are particularly 
disappointing given the continuous efforts of the Republican 
Majority of the Committee during the previous Congress to force 
the Administration to develop a comprehensive architecture plan 
and to address significant flaws in current programs.
    The report falls well short of being a succinct, balanced, 
or well thought out treatment of the problems plaguing the 
overhead architecture for a number of reasons. The Majority's 
``challenges and recommendations'' contained in the report are 
biased by the methodology used during a series of round table 
discussions, and ultimately in presenting its findings. In 
short, the Majority failed to:
           capture participants' dissenting views;
           treat problems plaguing the Nation's 
        overhead architecture comprehensively rather than in a 
        haphazard, piecemeal fashion;
           address the classified systems and threats 
        that drive many architectural decisions;
           address the importance of integrated ground 
        systems for tasking, processing, exploitation and 
        dissemination;
           discuss possible adverse aspects of using 
        commercial space services;
           protect the candor of discussions with the 
        Committee that were made on a ``not for-attribution'' 
        basis;
           make a linkage between acquisition practices 
        and maintenance of one of the Nation's most important 
        treasures--our dedicated aerospace professionals.
    The series of roundtable discussions provided an excellent 
forum for Members of the Committee to discuss and learn about 
these systems, but failed to reach conclusions to help repair 
policy shortcomings at the core of the Nation's overhead 
architecture problems.
    When participants were invited to attend the roundtable 
discussions they were told that their comments would be made 
without individual attribution to ensure candor. Yet, the 
Majority has chosen to list the organizations that participated 
in the roundtable discussions. This betrays the trust the 
private sector (or for that matter, any individual) should have 
in a commitment from Congress, and it also appears to falsely 
suggest that the views of the participants are favored. It is 
critical that We maintain the trust of the private sector and 
the American people, and keep our commitments,
    On substance, the Majority has failed to address the views 
offered by the roundtable participants that do not agree with 
their views. The unknowing reader is misled to believe that the 
Majority's conclusions are the result of unanimous agreement. 
For example, participants' views differed on sole source 
contracting and open competitive contract bidding. Some of the 
private sector participants believed that a more reliable 
product results from awarding follow on work to current 
contractors via a firm fixed price contract, while smaller 
aerospace firms argued that they have difficulty gaining 
insight needed to compete with existing performers. These are 
clearly different views amongst industry participants. Failing 
to include dissenting views or disagreements among participants 
has resulted in a fundamentally flawed report.
    The report also fails to adequately address the most 
important issues related to overhead architecture. The report 
does not address the need for a durable and coherent 
architecture that can last through changes in administration 
and congressional leadership. The report does not discuss 
classified threats or classified aspects of the overhead 
architecture, which are the most important issues facing us. 
Instead of developing ideas and actions required to correct the 
nation's architectural shortfalls, the Majority offers only 
platitudes and general observations.
    The Majority also ignores one of the most fundamental and 
important aspects of developing an overhead architecture--the 
ground segment. Few of the industry participants came prepared 
to have any detailed discussions about how to improve tasking, 
processing, exploitation and dissemination of information 
derived from sensors in both air and space. Those systems are a 
vital element of our overhead assets. This is not principally a 
technology issue; it is a bureaucratic challenge. Developing an 
integrated ground capability requires leadership to cut through 
bureaucracy hindering its rapid improvement. This is an area 
where small dollar investment could yield tremendous 
improvements--which was completely unexplored by the Majority.
    The report also fails to address critical issues related to 
use of commercial satellites, even though a series of 
Presidential decision directives encourages their use to the 
maximum extent possible. Commercial remote sensing has become 
an increasingly viable answer to a host of national security 
demands. Recent Administration decisions to acquire tiers of 
collection platforms that can operate within a comprehensive 
architecture require it to address how the U.S. will 
incorporate commercial remote sensing into its architecture and 
to perform a more robust cost analysis balancing commercial 
costs against the flexibility and capability gained through ad 
hoc collection tasking changes, while also continuing the 
research and development for next generation systems. The 
issues involved in these discussions are complex and important 
and the Majority report doesn't even mention them.
    Lastly, while the report fails to address key deficiencies 
in government acquisition policies that have negatively 
impacted our ability to retain a stable, long-term, aerospace 
workforce. Government acquisition practices have forced layoffs 
and massive program reassignments when a few, expensive, highly 
technical programs are started, stalled, killed and sometimes 
restarted. We may need to fix those practices and focus on more 
frequent and steady acquisitions with shorter life spans, The 
report treats acquisition issues only superficially.
    The shortfalls above are some of the most glaring problems 
with this report, which cannot be called a comprehensive 
effort. There are times when minor revisions can result in a 
product that is useful and worthy of bipartisan support. The 
flaws in this draft were so substantial that it was not 
possible to improve the report in the time available. It is our 
view that the report is incomplete, insufficiently rigorous and 
fails to fully analyze the serious problems we face. Its 
recommendations are, in some cases, superficial or self-evident 
and in other cases questionable or not adequately supported. We 
therefore cannot recommend it as a guide for policymakers or 
decision making.

                                   Peter Hoekstra.
                                   Terry Everett.
                                   Elton Gallegly.
                                   Heather Wilson.
                                   Mac Thornberry.
                                   John M. McHugh.
                                   Todd Tiahrt.
                                   Mike Rogers.
                                   Darrell Issa.

                            ADDITIONAL VIEWS

    I want to thank the Minority Members and staff for their 
contributions to this comprehensive report. It is unfortunate, 
however, that they have chosen to focus on partisanship rather 
than the important issues facing our space programs. The status 
of our overhead architecture and space workforce is simply too 
important to taint with partisan rancor; their actions are 
disappointing.
    Although the roundtables generated discussions related to 
the integrated ground architecture, the majority of these 
discussions were classified. This unclassified report was 
therefore not the proper venue to address issues related to the 
ground architecture. Instead, this is an appropriate topic for 
further study in the 111th Congress.
    Finally, I want to thank all staff who contributed toward 
this report including Robert Minehart, Staff Director for the 
Subcommittee on Technical and Tactical Intelligence, Don 
Campbell, Stacey Dixon, and Mark Young. In addition, I would 
also like to thank Frank Garcia of the Minority staff whose 
timely input, independent of the Minority Views, contributed 
substantially to this report.

                                 C. A. Dutch Ruppersberger.