Potential Benefits of Using Commercially Hosted Payloads

We and others have identified potential benefits of using commercially  hosted payloads to gain space-based capability, such as:
Cost savings—Commercially hosted payloads may increase  affordability because the government payload owner pays for only a  portion of the satellite development and shared launch and ground  systems costs, rather than for the entire system. Some government agencies have reported  saving hundreds of millions of dollars to date from using innovative  arrangements such as hosted payloads. Matching Payloads with Commercial Host Satellites

Opportunities to match a DOD payload with a commercial host can arise  in various ways. Specifically, these  properties include:
The size of the payload when it is stowed and when it is deployed on  orbit, including the available area on the host satellite;
The available weight and mass distribution the host satellite can
The available power on the host satellite;
The thermal requirements of the payload and corresponding capability  of the host satellite;
The requirements to limit electromagnetic interference—disturbances  that affect electrical circuits on the payload and host satellite;
The available command, telemetry, and mission data rate  requirements of the payload and corresponding capability of the host  satellite;
The compatibility of interfaces between the payload and host satellite;
The pointing accuracy and stability of the host satellite; and
The necessary orbits, including altitude and inclination. The Air Force’s Hosted Payload Office

In 2011, the Air Force created the Space and Missile Systems Center’s  (SMC) Hosted Payload Office (HPO) to provide acquisition architectures  that achieve on-orbit capability more quickly and affordably. Programs do not have to use HOPS, however, and may contract with  commercial companies directly. DOD Has Used Commercially Hosted Payloads Three Times and Three More Missions Are Planned or Underway

Since 2009, DOD has launched three experimental payloads on  commercial host satellites and plans to conduct three more missions  through 2022, as shown in figure 1. DOD estimates that it has achieved  cost savings of several hundred million dollars from these experimental  payloads. For more  information on civilian agencies that use or plan to use commercially  hosted payloads, see appendix I. DOD Has Three Commercially Hosted Payload Efforts Planned or Underway

DOD and Air Force officials told us they are planning to pursue  commercially hosted payloads for three programs in the coming decade  to achieve cost savings and on-orbit capability more quickly. Additional opportunities for commercially hosted payloads may be  forthcoming as DOD develops requirements and designs for new and  follow-on space programs. The  complexity of integrating a government payload onto a commercial host  can also drive the overall cost of the arrangement. DOD’s knowledge of commercially hosted payloads is also fragmented  across the agency. According to  an HPO official, programs are not required to use HPO expertise or tools  as they pursue using hosted payloads. We have reported in the  past that DOD’s culture has generally been resistant to changes in space  acquisition approaches and that fragmented responsibilities for  acquisitions have made it very difficult to coordinate and deliver  interdependent systems. Centralized  collection and assessment of agency-wide data would help enable DOD  to mitigate the logistical challenges inherent in matching payloads to  hosts, and better position DOD to make reasoned, evidence-based  decisions on whether a hosted payload would be a viable solution to meet  warfighter needs. Recommendation for Executive Action

The Secretary of Defense should require programs using hosted  payloads to provide cost and technical data, and lessons learned to a  central office. In implementing this recommendation, DOD should  consider whether the Hosted Payload Office is the most appropriate office  to centralize agency-wide knowledge.
Why GAO Did This Study

Each year, DOD spends billions of dollars to develop, produce, and field large, complex satellites. For such satellite systems, a single adversary attack or on-orbit failure can result in the loss of billions of dollars of investment and significant loss of vital capabilities. As DOD plans new space systems and addresses an increasingly contested space environment, it has the opportunity to consider different acquisition approaches. One such approach is to integrate a government sensor or payload onto a commercial host satellite.
House Armed Services Committee report 115-200, accompanying a bill for the Fiscal Year 2018 National Defense Authorization Act, included a provision for GAO to review DOD's use of commercially hosted payloads. This report (1) determines the extent to which DOD uses commercially hosted payloads and (2) describes and assesses factors that affect their use.
GAO reviewed DOD policies, documentation, and planning documents, and interviewed a wide range of DOD and civil government officials, and commercial stakeholders.

What GAO Found

GAO and others have found that using commercial satellites to host government sensors or communications packages—called payloads—may be one way DOD can achieve on-orbit capability faster and more affordably. Using hosted payloads may also help facilitate a proliferation of payloads on orbit, making it more difficult for an adversary to defeat a capability. Since 2009, DOD has used three commercially hosted payloads, with three more missions planned or underway through 2022 (see figure below).
DOD estimates that it has achieved cost savings of several hundred million dollars from using commercially hosted payloads to date, and expects to realize additional savings and deliver faster capabilities on orbit from planned missions. Cost savings can result from sharing development, launch, and ground system costs with the commercial host company.
Among the factors that affect DOD's use of hosted payloads are
a perception among some DOD officials that matching government payloads to commercial satellites is too difficult; and
limited, fragmented knowledge on how to mitigate various challenges
GAO found that further opportunities to use hosted payloads may emerge as DOD plans new and follow-on space systems in the coming years. However, DOD's knowledge on using hosted payloads is fragmented, in part because programs are not required to share information. In 2011, the Air Force created a Hosted Payload Office to provide expertise and other tools to facilitate matching government payloads with commercial hosts. However, GAO found that DOD programs using hosted payloads are not required and generally do not provide cost and technical data, or lessons learned, to the Hosted Payload Office, or another central office for analysis. Requiring programs that use hosted payloads agency-wide to provide this information to a central location would better position DOD to make informed decisions when considering acquisition approaches for upcoming space system designs.

What GAO Recommends

GAO recommends that DOD require programs using commercially hosted payloads to contribute resulting data to a central location. In implementing this recommendation, DOD should assess whether the Air Force's Hosted Payload Office is the appropriate location to collect and analyze the data. DOD concurred with the recommendation.