{"id":25534,"date":"2022-03-22T13:25:43","date_gmt":"2022-03-22T13:25:43","guid":{"rendered":"https:\/\/one.sightlinemg.com\/defensenews\/uncategorized\/2022\/03\/22\/how-a-contracted-supply-chain-is-challenging-the-space-development-agencys-open-competition-model\/"},"modified":"2026-08-08T18:12:06","modified_gmt":"2026-08-08T18:12:06","slug":"how-a-contracted-supply-chain-is-challenging-the-space-development-agencys-open-competition-model","status":"publish","type":"post","link":"https:\/\/one.sightlinemg.com\/defensenews\/space\/2022\/03\/22\/how-a-contracted-supply-chain-is-challenging-the-space-development-agencys-open-competition-model\/","title":{"rendered":"How a contracted supply chain is challenging the Space Development Agency\u2019s open competition model"},"content":{"rendered":"\n<p class=\"wp-block-paragraph\">WASHINGTON \u2014 The Space Development Agency wants to maintain open competition for future satellite development contracts in a way that strengthens its industrial base, but an agency official said today that ideal is proving more difficult than expected.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">\u201cWe firmly believe that what we\u2019re trying to do is create a marketplace and send a demand signal to the market that says, \u2018We need X units in Y months on a launch pad,\u2019 and everything we say fits that model. The problem is, we\u2019re struggling a little bit to put our money where our mouth is, so to speak,\u201d SDA Technical Director Frank Turner said during a March 21 panel at the Satellite 2022 conference.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Turner was reflecting on the first two rounds, or \u201ctranches,\u201d of contracts SDA awarded for its space transport layer, which will create a mesh network of communication satellites that can transfer information from on-orbit sensors to users on the ground. <a href=\"https:\/\/www.c4isrnet.com\/battlefield-tech\/space\/2020\/08\/31\/space-development-agency-orders-its-first-satellites\/\" target=\"_blank\">In August 2020<\/a>, the agency chose York Space Systems and Lockheed Martin to build 10 satellites each for Tranche 0 of its transport layer.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Last month, SDA announced the<a href=\"https:\/\/www.c4isrnet.com\/battlefield-tech\/space\/2022\/02\/28\/space-development-agency-awards-18-billion-to-build-out-satellite-communications-layer\/\" target=\"_blank\"> second round of transport layer awards<\/a>, awarding $1.8 billion in contracts to three companies: Lockheed, York and Northrop Grumman.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">While the decision may have appeared to favor incumbents, Turner said, the selection was based on which companies wrote the best proposals, which is the government\u2019s prerogative.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The bigger issue the agency is now grappling with is supply chain dependencies among those three companies. While SDA chose three primes to build out its transport layer, there are multiple instances of sole-source suppliers at the component level, Turner said.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">\u201cSo, we\u2019ve got single points of failure built into our system that we exacerbated by virtue of the fact that they have three customers that they\u2019re working for to provide us a capability,\u201d he said. \u201cSo, how do they adjudicate across their three customers if they start having problems delivering what we need?\u201d<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Along with its transport layer contracts, SDA is partnered with L3Harris and SpaceX for Tranche 0 of its tracking layer, which will consist of eight missile tracking satellites slated to launch in 2023. The agency <a href=\"https:\/\/sam.gov\/opp\/d5139720a0694f2a916a7d1a35af5a3e\/view\" target=\"_blank\">released a solicitation on March 17<\/a> for at least 28 <a href=\"https:\/\/www.c4isrnet.com\/battlefield-tech\/space\/2022\/03\/15\/space-development-agency-to-launch-next-missile-warning-satellites-earlier-than-expected\/\" target=\"_blank\">Tranche 1 satellites.<\/a><\/p>\n\n\n\n<p class=\"wp-block-paragraph\">A senior defense official told reporters March 15 that SDA is closely monitoring the supply chain for all of its satellites. Parts shortages, particularly for electronics, are a concern for the agency.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">\u201cThose are still items that our primes are working pretty closely with their subcontractors to make sure they can mitigate,\u201d the official said. \u201cThey all have closure plans on how to get there, but those parts are not sitting on the shelf ready to go right now.\u201d<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Turner said that as SDA matures its <a href=\"https:\/\/www.c4isrnet.com\/battlefield-tech\/space\/2020\/11\/09\/gotta-go-fast-how-americas-space-development-agency-is-shaking-up-acquisitions\/\" target=\"_blank\">business model<\/a> through additional contracts \u2014 the plan is to award new batches of satellites in each capability layer every two years \u2014 it hopes to address some of these early issues.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">\u201cStarting next year, we\u2019ll begin the process of acquiring Tranche 2 to go up beginning in \u201826. So, we\u2019re going to be thinking through everything that we\u2019ve done up to this point and seeing how we can solve some of the problems we\u2019ve created,\u201d he said.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Outside of supply chain and competition concerns, Turner said another issue SDA will likely face \u2014 particularly when it launches the Tranche 1 transport satellites \u2014 is risk tolerance. The Tranche 1 Transport Layer includes 126 satellites and, he noted, even if the mission achieves a 95% success rate, that would mean six satellites failed on orbit.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">\u201cIf we spend three years in failure review boards for six on-orbit failures when the average cost per vehicle across 126 [satellites] is $10 million, we have failed as an agency completely and utterly,\u201d he said. \u201cWe talked about the government getting out of its way, that will be the biggest hurdle that we\u2019re going to trip over if we\u2019re not careful.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":"<p>The agency is concerned about supply chain dependencies among its prime contractors after its first few rounds of satellite development awards.<\/p>\n","protected":false},"author":7,"featured_media":32490,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_yoast_wpseo_meta-robots-noindex":"","_yoast_wpseo_meta-robots-nofollow":"","_yoast_wpseo_canonical":"","_acf":"","_yoast_wpseo_primary_category":23,"_jetpack_feature_clip_id":0,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","_smg_distribution_targets":[]},"categories":[160,33,163,36,23],"tags":[],"coauthors":[3468],"class_list":["post-25534","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-daily-news-roundup","category-home","category-military-space-report","category-newsletters","category-space"],"acf":{"subheadline":"","legacy_arc_id":"J2MQW2YL7NAJXH7LTXEYCPV7JE","arc_canonical_url":"\/battlefield-tech\/space\/2022\/03\/22\/how-a-contracted-supply-chain-is-challenging-the-space-development-agencys-open-competition-model\/","remove_feature_photo":false,"is_sponsored":false,"subtype":"","redirect_url":"","disable_inline_ads":false,"native_logo_pretext":"Presented 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