Monday, July 17, 2017

Orbital ATK, DARPA, MacDonald Dettwiler, DigitalGlobe & Unleashing the Lobbyists

          By Chuck Black

Those of us who need a reminder that our space industry is heavily dependent on the largesse of our political class need look no further than the recent adventures of Richmond, BC based MacDonald Dettwiler (MDA) as it seeks to gain access to US government and military markets.

Want an overview of the DARPA RSGS program? Check out the March 25th, 2016 DARPA post, "Program Aims to Facilitate Robotic Servicing of Geosynchronous Satellites." Graphic c/o DARPA.

To begin, Dulles, Virginia based Orbital ATK has failed in a legal bid to halt a Defense Advanced Research Projects Agency (DARPA) contract for robotic satellite maintenance devices awarded under the DARPA Robotic Servicing of Geosynchronous Satellites (RSGS) program in February 2017. That award, originally made to MDA subsidiary Space Systems Loral (SSL), will now be able to move forward.

But plaintiff Orbital ATK hasn't given up on its claims and will instead go to the next level and lobby the political arena to see "if the White House can help it to bring the work to the private sector."

As outlined in the July 17th, 2017 The Register post, "DARPA's robot sat-fixing program survives sueball strike," the core of the Orbital ATK suit rested with a claim that the RSGS program violated America's 2010 National Space Policy, because the policy "forbids government space research from competing with the private sector."

As outlined in the July 12th, 2017 ruling handed down by the United States District Court for the Eastern District of Virginia, US District Judge Leonie Brinkema dismissed Orbital ATK's complaint "on the basis that the 2010 National Space Policy doesn't have the force of law, meaning there was no basis for the lawsuit to proceed."

Leaving aside for the moment the question of "why" a US government agency would formulate a space policy document they didn't expect to be used as policy, it's worth noting that plaintiff Orbital ATK was also "miffed that DARPA had awarded the robosat contract to a competitor, Space Systems Loral (SSL) which, although based in California, is owned by Canadian outfit MacDonald Dettwiler. The suit suggested that at the contract's conclusion, SSL would then have the technology for its 'sole commercial use'."

Not that there's anything wrong with that, unless you're an MDA competitor. In which case you can argue that the US government provided an unfair advantage to your competition and "distorted the market."

Since the ruling avoided the question of whether the DARPA RSGS program was duplicating civilian programs, Orbital ATK will try other avenues to promote its views. They'll most likely try to gain an exception to the law for their specific case but it's possible that they might even attempt to change the law.

In either case, there is no doubt, that both sides in the court case will now unleash their lobbyists on the US government. 

As outlined in the February 4th, 2017 DennisWingo post, "On Orbit Servicing Controversy; DARPA VS Commercial," on-orbit satellite servicing has a long history, with commercial proposals going back to the 1950's and operational technology first being rolled out for the 1980's space shuttle missions, which utilized Canadian designed and built Canadarm technology. As outlined in the  December 16th, 2016 post, "MDA says No Sale of Canadarm Technology to the US Government in NASA RESTORE-L, DARPA RSGS or 'Any Other" Project,'" MDA insists that no Canadarm derived technology is being used in any of its current satellite servicing plans. Graphic c/o Dennis Wingo

Speaking of MDA and lobbyists, the company seems to be slowly working through its paperwork to finalize the acquisition of Westminster, CO based DigitalGlobe, and become the contractor of choice for various US military and civilian programs relating to Earth imaging and on-orbit satellite servicing.

Unfortunately for MDA, it's not all smooth sailing.

As outlined in the July 13th, 2017 Space Intel Report post "MDA, DigitalGlobe withdraw, resubmit acquisition documents for US national security review," the two companies have both "withdrawn and then re-filed documents about their planned merger with the US Committee on Foreign Investment in the United States (CFIUS) to give the committee additional time to assess the transaction for US national security implications."

Normally, the need to refile documents would indicate issues needing resolution before the merger is able to move forward. But the specifics of this refiling were not discussed in the public documentation, so we don't know what those issues are.

Here's what we do know. The CFIUS review is required under US law because MDA is a Canadian based company which has committed to operate DigitalGlobe as “a stand-alone division under SSL MDA Holdings Inc., which is MDA’s U.S. operating subsidiary," in order to comply with US laws and regulations governing Federal government subcontractors.

In essence, US military contractors normally need to be US owned and operated, which MDA isn't, at least so far. The official portion of MDA's US access plan to gain compliance with, or at least develop a workaround to the CFIUS requirements, is on the public record, but it likely isn't sufficient on it's own to obtain compliance.

So it's being rewritten and updated.

For more on the strategy as it stands today, check out the February 27th, 2017 post, "MacDonald Dettwiler & DigitalGlobe, the Worldview Legion Constellation, Canada's RADARSATs & America's "Deep State." For an MDA specific take, check out the July 12th, 2017 MDA/ DigitalGlobe joint press release, "MDA and DigitalGlobe Provide Update on Merger."

It's worth noting that, at least some of the strategies being used by MDA are either trade secrets (information not generally known or reasonably ascertainable by which a business can obtain an economic advantage over competitors or customer), or else heavily dependent on the political arena to facilitate. 

In which case, expect MDA/DigitalGlobe/SSL to begin unleashing a second set of lobbyist's, focused around gaining support for the DigitalGlobe acquisition.

As Daffy Duck once said, "Yike's and away!"
Chuck Black.

Chuck Black is the editor of the Commercial Space blog.

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