Tuesday, January 31, 2017

Satellite Servicing, Orbital ATK, MDA, "Security Control Agreements," CETA, Minister Duncan's Science Adviser & Nova Scotia Spaceports

          By Henry Stewart

NASA is waiting for the incoming Trump administration to notice its space program. Canada is also waiting for Trump, if only to help define our ongoing role in NASA programs.

But Canada's space industry is also waiting for the Trudeau government to fill all those space focused committees, plans and positions promised over the last year as outlined in the January 16th, 2017 post, "The REAL Funding Opportunity Behind the Upcoming Canadian Space Agency 'Long-Term Strategy.'"

Given those constraints, and for the week of January 30th, 2017, here are a few of the stories we're currently tracking in the Commercial Space blog:

An overview of the RSGS program. As outlined in the March 25th, 2016 DARPA post, "Program Aims to Facilitate Robotic Servicing of Geosynchronous Satellites," the servicing vehicle "jointly developed with a commercial partner would leverage DARPA’s successes in space robotics and accelerate revolutionary capabilities for working with satellites currently beyond reach." Or not, depending on who you talk with. Graphic c/o DARPA.
As outlined in the January 26th, 2017 Space News post, "DARPA satellite-servicing project comes under congressional fire," Four US lawmakers have complained to DARPA and the Pentagon that the DARPA Robotic Servicing of Geosynchronous Satellites (RSGS) program "appears to run afoul of a national space policy that discourages the government from developing space systems and services it could otherwise buy from the private sector."
The disgruntled US policymakers include House representatives Jim Bridenstine (R-Okla.), Rob Bishop (R-Utah), Barbara Comstock (R-Va.) and Duncan Hunter (R-Calif.). 
According to the lawmakers, DARPA should “stop any further action on RSGS” until DARPA completes a review “to ensure its compliance with the 2010 national space policy.” 
At least one US policymaker, representative Hunter, said the RSGS program "essentially duplicates NASA’s Restore-L mission and muddies the business case for commercial companies," chiefly by “indirectly subsidizing space-related activities that private enterprises are willing and able to carry out on their own.”
According to the article, "this week’s attention to RSGS comes about nine months after Orbital ATK’s Space Logistics subsidiary signed its multimillion-dollar contract with Intelsat to provide life extension services for multiple spacecraft over the course of five years. Orbital ATK inked the Intelsat agreement for services with its Mission Extension Vehicle, MEV-1, last April; DARPA issued its initial solicitation for RSGS the following month."
The article also singled out two other potential commercial competitors for on-orbit satellite services, Richmond, BC based MacDonald Dettwiler (MDA) which, as noted in the December 12th, 2016 post, "Will the New Space Systems Loral $127Mln NASA Space Robotic Servicing Contract Help Canada?" was the recipient of the NASA Restore-L contract through its Space Systems Loral (SSL) connection, and United Kingdom based Effective Space Solutions, which is currently "building small satellites for life-extension and other services."
MDA, which as outlined in the January 15th, 2012 post, "MDA Satellite Servicing Agreement with Intelsat Expires," also once had a satellite servicing partnership with Intelsat, is considered to be the current front runner for the upcoming RSGS contracts, but only if it succeeds in obtaining Foreign Ownership, Control or Influence (FOCI) compliance for its SSL facility in Palo Alto. 
Orbital ATK has so far declined to bid on the contracts. 
MDA HQ in Richmond, BC. Its future is currently dependent on the ongoing FOCI negotiations needed to obtain facility security clearance for its Space System Loral facility in Palo Alto, CA. Photo c/o T-Net.
  • Meanwhile, Richmond, BC based MacDonald Dettwiler (MDA) and its San Francisco, California based subsidiary (or holding company, depending on the MDA press release you favor) SSL MDA Holdings, Inc. has signed a "Security Control Agreement" with the US Department of Defense (DoD).
As outlined in the January 26th, 2017 MDA press release, "MDA signs a Security Control Agreement with the U.S. Department of Defense," the contract "completes an important step in the process to position the Company to more effectively pursue the U.S. Government space and defense markets." MDA will "now pursue facility security clearance for its operations in Palo Alto, CA to fully execute the Company's broader U.S. growth strategy." 
Under US law, and as outlined on the HG.org legal resources website page on "Foreign Ownership, Control or Influence (FOCI) and US Facility Security Clearances:
... if a product or service provider is to access classified national security information in the performance of its contract, it must obtain a facility security clearance. A major part of the U.S. federal government's vetting process for granting a facility security clearance involves assessing the organization's Foreign Ownership, Control or Influence (FOCI).
But the security control agreement (SCA) is only one method of obtaining FOCI compliance and there are obvious limitations on its usefulness. 
"One on One with Howard Lance" back when he was CEO of Harris Corporation, from the January 5th, 2011 SpaceCast Business post, " One on One with Howard Lance. More recently, the current MDA CEO has seemingly become much more reticent about speaking on the record. Photo c/o SpaceCast Business.
As outlined on the Faculty Clearance Portal (a service set up by Boston, MA based Secure Defense Consulting, for firms seeking a facility security clearance), although "the Security Control Agreement (SCA) is now the instrument least commonly used to mitigate the security risks of Foreign Ownership, Control, or Influence (FOCI), this is not really due to the SCA being undesirable."
The SCA's relative unpopularity is more likely due to companies seeking FOCI compliance being owned or controlled by a foreign entity, which the SCA does not mitigate. 
According to the post, other available options to mitigate FOCI requirements include Special Security Agreements (intended to "mitigate the security risks of the foreign ownership or control while allowing the foreign entity to appoint representatives to the company's board of directors") and the more restrictive Proxy Agreement or Voting Trust Agreement (which "take away much of the foreign investors'control of the company"). 
It's certainly unusual for a foreign company such as MDA to first apply for the SCA clearance when one of the more restrictive options are required. The standard process for the company applying for FOCI clearance is to obtain only the level required in order to fulfill business requirements, which the SCA has not provided to MDA in this case.
Which process will MDA now pursue to obtain facility security clearance for Palo Alto? Stay tuned.
Greenpeace also opposed CETA, although perhaps not for reasons the Canadian space industry might understand. As outlined in the October 30th, 2016 Sputnik post, "Greenpeace on Upcoming Signing of CETA Deal: 'Cat is out of the Bag'," the CETA deal could "undermine standards and regulations on environmental protection, health and safety and workers' rights." Photo c/o REUTERS/ Agencja Gazeta/Kuba Atys.
  • It was claimed by unnamed ""space industry" sources that the Comprehensive Economic and Trade Agreement (CETA), a free-trade agreement between Canada and the European Union (EU), intended to eliminate 98% of the tariffs between the two, would cause great concern if ever enacted.
However, as outlined in the January 24th, 2017 EU press release, "CETA: Trade Committee MEPs back EU-Canada agreement," that doesn't seem to have discouraged plans to move the deal forward. According to the press release, the trade deal, "which aims to boost goods and services trade and investment flows, was approved by the International Trade Committee on Tuesday." 
And, as outlined in the October 28th, 2016 EUObserver post, "Belgium green lights unchanged CETA," the last of the 28 EU member states ratified the agreement back in October 2016, after almost a decade of negotiation.
CETA also enjoyed strong bipartisan political support in Canada. The original negotiations were concluded in August 2014 under the Stephen Harper Conservative government and then embraced by the incoming Liberal Justin Trudeau government after it gained power in October 2015. As outlined in the October 28th, 2016 YorkRegion.com post, "Trudeau Brussels-bound to sign CETA on Sunday," the current Canadian PM even visited Brussels in October, 2016 to sign-off on the final agreement. 
The Canadian kerfuffle over CETA began with the publication of the December 14th, 2016 SpaceRef.ca (now SpaceQ) post, "Free Trade Deal With Europe a Serious Cause for Concern for Canadian Space Industry," which referenced unnamed sources who claimed that CETA implementation "could have a significant negative effect on Canada’s domestic space industry.
The article also claimed that the CETA agreement allowed European "access to the Canadian civil space tendering process for goods and services," but provided "little to no reciprocal access for Canadian companies" which might want to bid on European space projects.
Certainly we'll find out the truth over the next little while. Bidders on Canadian Space Agency (CSA) contracts should possess a robust network of Canadian based employees and subcontractors able to fulfill space agency requirements and contribute to Canadian jobs, no matter where the head office might be located.
Movement in this area publicly languished for almost a full year as the government collected background information on the role, but finally started picking up stream in late 2016 when, as outlined in the December 6th, 2016 CTV News post, "Help wanted: Canada seeks new 'Chief Science Advisor'," the government began accepting applications.
Originally, applications were expected to remain open only until January 27th, 2017, but last week, Duncan announced an extension until February 8th, 2017.
The delay indicates a certain confusion at the ministerial level. It's quite possible that either the mandate for the position has not been defined enough to choose the appropriate candidate or else the appropriate candidate has, so far at least, not applied.
It will be interesting to see what the cause for the delay turns out to be. 
    Screenshot c/o CBC News.
  • And finally, another company has begun making noises about building a Canadian launch facility.
This time, as outlined in the January 31st, 2017 CBC News post, "Why a $100M rocket launch site might be coming to Nova Scotia," it's a small Nova Scotia based technology company, with American partners and undefined funding.
It's also the most recent of numerous plans to create a Canadian spaceport, either on the East coast or somewhere else. 
The most recent previous plan was covered in the  September 11th, 2016 post "Ukranian Based Yuzhnoye Design Office Eyeing a Canadian Spaceport for its Cyclone-4 Rocket." 
That plan had launchers, flight heritage and a defined business plan. This plan seems to be using the same basic building blocks (Cyclone-4 rockets looking for a North American launch facility) but subcontracted out the front facing PR people to someone outside of the Ukrainian based Yuzhnoye Design Office, which builds the Cyclone-4.
Of course, at some point, someone will need to step in with the estimated "$150Mln US (just under $200Mln CDN) in cash or kind," which was identified by John Isella, Yuzhnove's North American business representative, as the minimum investment needed to fund the facility in September 2016.
Given that, here's wishing them the best. 
For more, check out future posts in the Commercial Space blog.

Henry Stewart is the pseudonym of a Toronto based aerospace writer.

1 comment:

  1. While I am all for orbital rocketry making inroads in Canada (there's your 'Moon Shot', Mr. Trudeau), it seems all we're going to do is foot the bill for building, maintaining, operating the launch site, create maybe a couple hundred jobs out of it, but not be involved in the manufacturing of the rocket itself.

    Sure, the Ukrainians have much more experience in this kind of technology than we do so it's obvious that they'd be in charge of developing the rocket itself, but their space industry is doing pretty badly. I would have tried to cut a deal to co-manufacture here in Canada their planned Mayak family of rockets instead, in addition to the launch site, considering our substantial aerospace industry.

    Furthermore, you've got to remember that the Cyclone-4 is powered by toxic hypergolic propellants. People here would have fits if they learned that rockets full of toxic fuels would be launched so close by and dumped into the Atlantic once expended. Remember this: http://www.cbc.ca/news/canada/north/russian-rocket-baffin-bay-1.3610344

    The Mayak rockets probably wouldn't face as much criticism since they would be powered by, relatively speaking, more environmentally-friendly LOx/Kerosene. Of course, all this would only be possible if Ukraine was willing to negotiate some sort of technology transfer agreement with Canada that would benefit both our nations. This would likely be subject to intense scrutiny by the Missile Technology Control Regime, which has both Canada and Ukraine as members.


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