USSF’s Top Buyer to Industry: Stop Low-Bidding Now

The Space Force’s acquisition boss called on industry to stop low-bidding contracts and on the Pentagon to only select realistic proposals, arguing on Feb. 23 that underbidding eventually forces the Space Force to “rob our future to pay for the past.” 

Speaking at the Center for Strategic and International Studies, assistant secretary of the Air Force for space acquisition and integration Frank Calvelli warned he may be forced to cancel struggling programs and start over rather than laboring to get over-budget programs back on track.

“The reality is, I just need industry to bid properly,” Calvelli said. “Don’t low bid me and think that we’re going to award it and then fix it later.”

Calvelli, the first-ever space-focused senior acquisition executive, came on board in May 2022 and has prioritized smaller capabilities derived from existing technologies over larger, bespoke satellite platforms. He has codified that approach in a his nine tenets of space acquisition. He has also embraced the Space Development Agency’s rapid success launching the Proliferated Satellite Architecture into low-Earth orbit and Space Systems Command’s drive to leverage more commercial technology and services where possible. 

But he has also struggled with program delays and cost creep on some earlier development projects that predate the Space Force’s creation, including: 

• GPS Next Generation Operational Control Segment (OCX) 
• Advanced Tracking and Launch Analysis System (ATLAS) 
• Military Global Positioning System User Equipment (MGUE) 

All are more than a year behind schedule and were awarded contracts before Calvelli came on the scene.

“I’m at the point now where I can’t afford to keep paying for poorly awarded contracts in the past,” he said. “I’d rather cancel stuff and start over. And so I need industry to get out of the mode of low bidding. I need the government to get in the mode of awarding realistic proposals that we can actually execute.” 

The problem with delays and cost overruns is that they impact USSF’s other planned programs and projects, he said. “Every time we delay a program or we overrun a program, basically we have to use funds from our future investments and modernization or future investments in R&D to cover those overruns.”

It’s not only industry that’s at fault. The government has enabled low-bidders by awarding bids that weren’t realistic, then bailing out low bidders after the fact, he added. “The government needs to get into the habit—in their action strategies, and in their RFPs and their source selection plans—of awarding contracts that are realistic in terms of schedule, realistic in terms of costs, and to an organization that actually can do the job technically.” 

Short of canceling programs, Calvelli said he aims to “manage the hell out of them—get them over the finish line, get them done, get them finished.”

That includes biweekly calls with each program manager. It turns out to help when a senior acquisition executive is focused completely on space. 

During his 2022 confirmation hearing, Calvelli promised a “culture of program management discipline,” applying lessons from his time as deputy director of the National Reconnaissance Office.

Calvelli said that approach has paid dividends for the Space Force. His tenets have resonated with the space acquisition corps. “Something simple, like deliver ground before launch, I have had such a positive response from the team on that,” said Calvelli. “I think it’s something that no one’s ever said to them before. At the NRO, we knew that was always the case. We weren’t always perfect at it. But we always strive to deliver ground before launch. [Because] why would you launch a satellite that you can’t use? All you’re doing is using the life of the vehicle at that point in time. But that was something that I’m not sure anybody’s ever said to the great folks out at SSC, and they have responded and they are opening up programs accordingly now.” 

Calvelli has said industry has also indicated support for his approach, though some major contractors continue to push back on fixed-price contracts, which hold the contractor responsible for unanticipated cost overruns. Fixed-price deals push the risk of cost growth onto the vendors, as has been the case with Boeing on the Air Force’s KC-46 tanker and Northrop on the B-21 bomber. Both have pledged to be more careful bidding fixed-price contracts in the future.

But Calvelli defended fixed-price deals.  

“The formula that we wrote was very specific: build smaller, use existing technology, use fixed price, and then [hold schedules to be just] three years from contract award to launch,” he said. “Those are all elements of the formula.” By using existing technology, he said, both USSF and the supplier should reduce risk, making fixed-price deals more palatable.  

“I’m a little bit confused by some of the bigger primes who say they’re against that,” he said. “They should not be against that. I haven’t said I’m going to go build the next-generation Battlestar Galactica that’s never been built before [with] fixed price.” But something that’s already proven should work under such an arrangement.  

Calvelli highlighted how the Space Development Agency is leveraging commercial satellite buses for its data transport satellites—lowering costs, reducing risk, and encouraging more bidders. 

“Guess who are primes [on that program]?” Calvelli said. “Rocket Lab and Sierra Space. That’s awesome.”