Budget storms have reappeared on the horizon and the fore¬cast for defense expenditures, including for the GPS program, is grim with a high probability of ugly.
Budget storms have reappeared on the horizon and the fore¬cast for defense expenditures, including for the GPS program, is grim with a high probability of ugly.
The last-minute deal between Congress and the White House that raised the debt ceiling also set caps on discretionary spending, including that by the Department of Defense (DoD), between 2012 and 2021. These caps, according to the Office of Management and Budget (OMB), would reduce the expected deficit by a total of at least $2.4 trillion for that period. That includes $917 million in cuts made directly by the legislation, the Budget Control Act of 2011, and additional cuts that are to be made by a joint select committee — or “supercommittee” — of House and Senate members.
The committee doesn’t have much time. Its members must come up with a plan by the end of November and Congress must pass it before Christmas. Should they fail to agree, or should Congress fail to approve their plan, draconian cuts kick in automatically.
Meanwhile Congress has to get a budget in place for fiscal year 2012 (FY12) or the government will shut down on October 1. The Hill is expected to pass a continuing resolution that provides funding at 2011 levels. Those who follow the defense budget suggest that that is about where funding will stay once the FY12 appropriations are finalized.
“We expect the coming fiscal year to have a top line defense budget somewhere around the [level of the] fiscal year 2011 budget,” said Cord Sterling, vice president of legislative affairs at the Aerospace Industries Association. “So . . . it would be somewhere in the neighborhood of $26 to $27 billion less” than what the president originally requested for FY12.
Todd Harrison, senior fellow for defense budget studies at the Center for Strategic and Budgetary Assessments anticipates slightly deeper cuts to defense in FY12 of about $30–$33 billion. The Budget Control Act divides the cuts evenly between defense and nondefense — but lumps into the defense category with DoD the intelligence community (which tends to be a pretty high priority) and other departments such as Veterans Affairs and Homeland Defense.
The latter includes the Federal Emergency Management Agency, which has been handling the recent spate of storms and other natural disasters. Fortunately this setup, which forces the Defense Department to compete even harder for dollars, applies only to fiscal years 2012 and 2013.
The real cuts to defense, some $350 billion over 10 years, come into play in 2013 and beyond. On August 18 Jack Lew, the OMB director, sent a “budget guidance” to every federal agency instructing them to prepare two budgets for 2013 — one with cuts of 5 percent below 2011 funding levels and one with cuts of 10 percent.
It Could Get Worse in a Hurry
And that is something of a best-case scenario. The automatic cuts to defense and other agencies will be far deeper if the supercommittee fails to produce a plan that Congress accepts.
“All that has to happen for the trigger to go into effect is nothing,” said Harrison. “If they can’t pass anything, if they can’t reach any kind of compromise, then this happens. . . . And, given the amount of discord we’ve seen in Congress over the past year, that is a real possibility.”
In fact, among the more than a dozen budget and GPS experts who spoke to Washington View, few thought the supercommittee would pull together a deal that Congress would pass. Most expressed grave doubts that a plan would make it into law.
What the automatic cuts would do, explained Harrison, is “cut the defense budget rather abruptly by about $54 billion below the caps that have already been set. So, it is an additional cut — and it happens quickly. It happens in FY13.”
With all these changes, the cut to the Air Force’s space segment specifically could be as much as 20 percent, said one expert following the issue closely. This person, like all those working on, or affected by, the highly charged budget process spoke to Washington View on condition of anonymity.
As if that is not enough, the Air Force space budget, which includes GPS, may be asked to pay for things it has not been paying for up to now.
The current war efforts, for example, have been largely funded through supplemental appropriations that are not subject to the caps in the debt deal. The military contracts for the vast majority of its satellite communication services with commercial satellite companies — services that largely have been paid for through the supplemental bills.
Insiders now expect those “supplementals” to shrink as the U.S. role in Middle East conflicts is scaled back.
“I think with the budget pressures the belief is that they [the supplemental funding bills] are going to go down,” said one industry official, “and people have certainly stated that.”
Though the satcom bills will diminish as the United States pulls back from overseas conflicts — it won’t be by all that much, said another expert. According to this source, the concern then arises that, because the services are satellite related, the Air Force will be expected to pick up the bills out of its space budget.
The squeeze comes just as the GPS program is facing an inventory of aging satellites. Even before the budgetary problems arose, explained a source familiar with the program, the current constellation was expected to shrink to as few as 24 to 26 satellites by 2015 to 2017. Projections suggest it might not be possible to bring the constellation back to its current strength until 2018 or 2019 — perhaps even later.
This possibility of a shrinking constellation and a degradation of service is what most concerned those who spoke to Washington View. A level of 24 spacecraft plus three spares is needed, they said to maintain the level of accuracy and availability users now enjoy and to meet homeland and national security requirements.
That level is also necessary, explained one insider, to support NextGen — the modernized aircraft control network that the Federal Aviation Administration is currently developing, which depends on GPS for much of its new capabilities.
Coming Up with Plan B and C
To protect the GPS program the Air Force is now working furiously to find ways to do more with less.
Sources confirmed that the service took back for reconsideration its Program Objective Management document or POM, a key element in the budgetary process.
The POM, revised every other year, lays out a prioritized six-year plan covering budgets two to seven years out. As of press time the Air Force was still pondering changes to the POM that take into account the government’s reduced budgetary circumstances, sources confirmed.
“Now that they know the degree of cuts, they’ve got to start over,” said Sterling. “So where they were building a POM at one level they now know it’s going to be significantly less than that. They are doing a number of drills over there to determine what that level will be . . . and everything is on the table.”
Sources confirmed that one almost certain change will be a recasting of the three-phase GPS III program, which provides for “technology insertion” after completion of the IIIA satellite now under development by a team led by Lockheed Martin. The separate designations for the IIIB and IIIC phases will be dropped, said several sources, and system enhancements — including spacecraft crosslink capability intended to speed updates and the high-powered spot beams meant to help counter jamming — will be deferred or dropped.
Cuts could also occur to the next-generation Operational Control System called GPS OCX, being developed by Raytheon. In action on the DoD FY12 appropriations bill during the summer, the House had already removed $48 million in funding from the OCX program request and $50 million from GPS IIIB.
Other cost-cutting ideas under consideration include changes to satellite purchases, multi-satellite launches, and altering the configuration of the constellation. A suggestion is even kicking around that the military use more commercially available user equipment.
One of the concepts that has been proposed is the idea of extending the purchase of the GPS IIF satellites beyond the dozen spacecraft currently contracted for and delaying buys of the GPS III satellites. As part of this suggestion, the new OCX ground control system needed for the GPS III satellites would also be deferred and enhancements made to the current system now operated by Boeing.
According to one industry official the two measures would save the government roughly $1.5 billion. Part of the savings would come, the official said, from the fact the GPS IIF production line is already in place and part would come from savings on the software development for OCX and further development on the GPS III satellites.
The idea got a boost earlier this year when the OCX failed to pass a crucial milestone in its development program, a preliminary design review (PDR). Raytheon subsequently completed the action items, known as PDR Issue Notices, which were identified during the review and received a thumbs-up on the PDR from the Air Force at the end of August. One of the goals of OCX, noted a Raytheon spokesman, is a cost savings over the current ground system of 27 percent initially and then 50 percent after three years.
More with Less
Another idea getting a hard look is the launching of multiple GPS satellites on a single rocket. The savings per satellite could be as much as $60 to $100 million, one source estimated.
“We have looked at the ability to do a dual manifest. There is enough rocket capability and room in the fairing to do that,” said Ken Torok, Jr., vice-president for Navigation and Communication Systems at Boeing, which manufactures the GPS IIF satellites. The satellites would not really need to be changed, he added, but “there would have to be work done to create the payload integration hardware to accommodate both of the satellites inside the fairing.”
The same could be done for the GPS III satellites, sources explained. Under the current plan a GPS III spacecraft uses roughly 60 percent of the capacity of an EELV medium launch vehicle, and the push is on to put two satellites on one launcher.
If extra non-navigation payloads that have been added to the GPS spacecraft were dropped and some other design changes made — such as incorporating the batteries now used on commercial satellites and tweaking the power output a bit — GPS III could eventually evolve into a lean IIID satellite where three satellites could fly on one launcher, one expert said.
Where those satellites would go is also up for discussion. It would make a lot of sense, some sources told Washington View, to enhance the medium Earth orbit constellation with one or two geosynchronous (GEO) satellites that could be parked over signal-challenged areas — such as the mountainous Middle East.
A GEO satellite could also be used as an emergency backup if two or three MEO satellites in the same orbit happened to go off-line at the same time, said one expert. A GEO satellite that can be moved around to meet different needs would be particularly useful, another source noted.
Amidst the endless talk of cutbacks, at least one possible bright spot exists for the commercial GPS industry — COTS, that is commercial off the shelf equipment. Some have suggested that the Air Force follow the lead of other agencies and use less expensive (and sometimes more capable) commercial equipment for some of its needs as a way to save money.
About half of the GPS receivers now in use are already commercial receivers, explained one source, and many are more capable than the current DoD receivers. For example, military receivers, said the source, don’t have a road map built in — so, when users try to get directions to go from one point to another, the receiver displays a straight line vector and not a map.
Though Washington View has been told the idea of COTS receivers has yet to gain traction within the Air Force, switching where possible could boost both capability and cuts costs by a factor of 10, said one expert. That money, they explained, is in the same budget bucket as the rest of the program and could conceivably go towards paying for the equipment changes needed to do multiple launches.
Is it possible that a shift to COTS could really gain traction?
THE JOINT SELECT COMMITTEE ON DEFICIT REDUCTION
The interests of the GPS community — at least those of some of its biggest players — will be represented, albeit indirectly, on the new, budget-cutting supercommittee. Lockheed Martin is headquartered in Bethesda, Maryland, just outside Washington, in the district represented by Democrat Chris Van Hollen. Raytheon is headquartered in Waltham, Massachusetts, which is represented by Sen. John Kerry. Boeing, though it moved its headquarters from Seattle to Chicago, is among the top five contributors to campaigns of Sen. Patty Murphy of Washington, according to OpenSecrets.org. The 12 members and their affiliations are listed below.
Republicans
Co-chairman Jeb Hensarling, Texas
Rep. Dave Camp, Michigan
Rep. Fred Upton, Michigan
Sen. Pat Toomey, Pennsylvania,
Sen. Rob Portman, Ohio
Sen. Jon Kyl, Arizona
Democrats
Co-chairman Sen. Patty Murray, Washington
Sen. Max Baucus, Montana
Sen. John Kerry, Massachusetts
Rep. James Clyburn, South Carolina
Rep. Xavier Becerra, California
Rep. Chris Van Hollen, Maryland
