On Tuesday, April 12, 2011, Northrop Grumman Chief Executive Officer and President Wes Bush addressed the 27th National Space Symposium in Colorado Springs, Colorado. Below are his remarks.
Space – A New Way Forward
I’m delighted to be back at the National Space Symposium. Having grown up in the space business, I’m always delighted to come to NSS to connect with this great team from across government and industry that is making such a positive contribution to international security. As a community, we can take a lot of pride in our accomplishments. But one of the best things about our community is that we are always looking forward, willing to tackle the challenges ahead of us. I know that many of us here today have been at this symposium many times before. And there is always an exciting topic that seems to dominate the conversation each year. – So let me ask: How many times have we come to this symposium and heard that word "crossroads?"
Our space community always seems to be at a crossroads. It’s a common theme. And this year is no different.
What I think is different at this meeting is the nature of the crossroads at which we find ourselves. This year the threat to our community is increasingly multi-dimensional, and includes customer exhaustion with cost and schedule performance issues, economic and budget pressures that are as dire as any we have seen before, growing concerns about the vulnerability of space systems, and the emergence of even more credible substitutes for historically space-dominated missions.
Well, we can’t do much to make the budget pressures felt across all of government disappear overnight. But that fact underscores the importance of taking actions in the areas we can address, and in particular, aggressively tackling the cost and scheduling issues that encourage the termination or the paring-back of so many space programs. We all know that there is much that can be improved.
Because, let’s be honest, our commmunity’s track record on cost and schedule performance over the past decade is unacceptable. To be quantitative about that, a recent GAO report found that one in three major U.S. Defense Department programs since 1997 have had cost overruns of as much as 50 percent over their original projections. And many of those programs were satellites.
It is easy to see why so many members of congress – the very people charged with the stewardship of the tax dollars of the citizens they represent – are so skeptical of these programs. How are they to explain some of these overruns to the average American who ultimately pays for them?
Let’s put these issues in terms that the average American can relate to: Let’s say that person purchased a car for $20,000, only to be told on the day it was to be delivered, that they had to now pay another $10,000 or they would lose their car, and their original $20,000 investment. Oh and one more thing – their new car would not be delivered for two more years.
That is the news that members of congress have to break to their constituents – not very welcome news in this tough economy. And yet, that is what we seem to expect them to be willing to do on behalf of the programs we are developing.
We all know that a $500 million dollar satellite is not as simple as a car, but our industry ultimately must answer to the taxpayers. And Congress is responding, insisting that tax dollars are spent with the same care and forethought that their constituents must exercise in their family lives.
These kinds of overruns and schedule slippages are simply no longer acceptable. Not in this budget environment. And not when space itself is being viewed as riskier and riskier every year from a mission perspective due to a wide range of threats such as jamming, anti-satellite systems, and other measures.
Yes, there are a lot of reasons we’ve ended up in this situation. And some of them are valid: The loss of talent in the 90’s, when DoD budgets declined precipitously; the lack of budgeting for adequate program reserves; the focus on better, faster, cheaper at the expense of adequate resourcing.
But no matter how good the reasons, the results are unacceptable. Things like requirements creep during the development phase, or the rapidly changing threat profile, or the imperative for even more advanced technologies to get this hard stuff done – and the added costs that using the best technologies incur – these are things that usually are lost on the taxpayer.
We all have our opinions regarding the most frustrating aspects of government space system development and who bears the blame for the failures, but like it or not, the bottom line is still the bottom line. And our community’s performance over the past decade is not something we can point to with much pride, apart, of course, from the fact that the systems do work, and they work quite well.
Nevertheless, we cannot escape the fact that our national debt is within a few points of equaling our GDP. America’s taxpayers are spending nearly $1.2 Billion per day just in interest payments on that debt. Policy-makers and appropriators are searching high and low for things to cut to try to stave off this balance-sheet disaster and space is too convenient a target to ignore – it simply looks too expensive. Especially in light of the many emerging alternatives.
For years, we’ve been seeing the implications of new communications alternatives to satellites. And now we have UAVS, which can fly very high and stay up for days, then come back to get refueled, and fly again – and UAV’s hold a lot of payload that doesn’t need to be space qualified.
So, to repeat: We find ourselves at a crossroads, with the future of space challenged on multiple fronts. Space is getting the label of being too expensive, inherently risky, vulnerable to countermeasures and, potentially, to substitutes as well.
So how do we respond to this situation? I suspect our first actions will be to rely on many of the same approaches we have used in the past. We will call for industrial base protection and government programs to keep our workforce intact; We will offer the familiar strategies of better future performance through risk management – “back to basics” and “evolutionary instead of revolutionary” designs;
We will work on ways to overcome the vulnerabilities I mentioned; And of course, there will be those in our community who will attack the substitutes as not having enough range, global coverage, assured access, etc.
These are the arguments we have used before, and in all honesty, there is a certain amount of reasonableness in many of these actions. But I believe these arguments alone are no longer enough.
Stand back for just a moment and try to look at this from outside the space community. If these familiar actions are the sum total of our response, it will paint a picture of desperation – a desperation to propagate the status quo at any cost. Frankly, this is not the picture any of us would want for our community, and not a picture that serves our country well for the future.
And it is certainly not a picture that will attract the best and brightest to work in our space community, as they will always have other options.
We clearly need to do something more; to take some other actions beyond our usual strategies.
I want to focus on two actions in particular that I think will make a difference for our future. There are certainly additional actions required, but I put these two forward to initiate the dialogue.
First, we need to embrace innovation to help address the issues of affordability, risk management, and vulnerability – and with the same amount of zeal we exhibit when developing new technology to extend capabilities.
We need to devise new ways to support our customers’ missions that incorporate true affordability as a requirement.
As an example, with launch costs sometimes two and three times the costs of the systems themselves, innovation in this area is particularly needed.
Innovation is our bread and butter. It’s what we do best. We must channel that quality into cost and schedule excellence, with predictable execution outcomes.
The second thing that I think will make a difference in our future is to turn the many emerging substitutes for space from rivals into partners. Again, this is a task for the innovator. With real innovation on all fronts – technical, business, acquisition, operational, etc.
Clearly, there are some national security tasks in which space is the only option. But better integration of air, space and ground would introduce new capabilities faster. It would also lead to combined solutions for the end user that would give him what he needs faster and cheaper, while justifying less expensive and less risky individual components, and providing inherent risk mitigation through layering of capability.
Of course, that would necessitate a closer relationship with the end users – and I’m talking about the boots-on-the-ground end users. Such relationships are one of the things that will be necessary to realize a better future for our community – but only if we ensure that the innovations result in meaningful ideas and a willingness to take some risks to achieve a different set of outcomes than we all might be used to.
In addition, industry and government – especially in the acquisition community – will need to work together to reach across the current buying patterns that we are all used to. Stove-piping and hermetic system autonomy is costing us – and the taxpayer – much more than it needs to. Stove-piping has got to go. The new coin of the realm must be system concepts that rely on multiple capabilities that are integrated into the conops, and are successfully operated.
These are just two examples of ideas to take a more proactive approach to creating our future. As I said, I am sure there are other ideas and better ideas. These are meant to stimulate the discussion, to help prevent us from falling victim to inaction – or the wrong action – and to help set us on a course that ultimately serves our nation and our allies well in extending the service of space far into the future.
We can choose to stand on the sideline and wait to see how things work out, or we can roll up our sleeves and do what we do best. As an industry that prides itself on innovation, we need to create the new solutions that answer the demands of those who use our systems, and those who pay for them. These are tasks that are well within the talents and capabilities of our community. I know we are up to this challenge, and I am confident we will come through today’s crossroads and continue to contribute to international security well into the future.