Pentagon worries about space industry with end of shuttle program

As the space-shuttle era draws to a close and budget pressures threaten to constrain spending, a senior Defense Department official said on Tuesday that the government needs to take steps to protect the aerospace industrial base and to preserve the United States' technological edge in space.

The Defense Department has not been involved in the shuttle program since the 1980s, but NASA and the military's own space operations remain inextricably linked.

"While we don't share the shuttle, we do share the industrial base," Gregory Schulte, deputy assistant secretary of Defense for space policy, told reporters at a breakfast on Tuesday morning. "And so anything that NASA does is important to us in terms of the industrial base. And anything that we do is important to NASA as well."

Concerns about the space industrial base have been percolating for years, with companies clamoring for more stable funding lines and for a long-term commitment within the government to strategies and programs.

The end of NASA's 30-year shuttle%C2%A0program opens the door to more commercial investment in space. But concerns remain about the industry's health--particularly as the Defense Department, whose space budget totals about $26 billion annually, weighs significant cuts to its accounts.

"We're worried about the state of the industrial base," Schulte said.

In a national security space strategy released earlier this year, the Defense Department and the Office of the Director of National Intelligence pledged to foster an industrial base that is "robust, competitive, flexible, healthy, and delivers reliable space capabilities on time and on budget."

Key to that, Schulte said, is injecting stability in procurement by changing acquisition practices to focus more heavily on block buys and advanced procurement funding--efforts that require congressional approval.

To sell their%C2%A0"evolutionary acquisition for space efficiency" strategy to lawmakers, Schulte and other Air Force officials are touting the benefits of their acquisition approach, including the potential for 10 percent cost savings.

Administration officials are also seeking to reform the country's archaic export control system to allow U.S. firms to sell overseas space technologies that are widely available in the commercial market--a move that would broaden their markets and boost their bottom lines.

The goal, Schulte said, is to ease the administrative burdens and speed up the process of the export control system by creating a single agency to handle these exports, as well as a single system to collect information. The key, as with the acquisition changes, will be gaining support within Congress to lift some restrictions that are now in place.

"It doesn't make sense that we disallow our commercial companies from marketing technologies that are readily available on the commercial market," Schulte said.