Wednesday, January 30, 2019

Why did Maxar Subsidiary SSL "Terminate" its Participation in the DARPA GEOsynchronous Satellite Servicing Program?

          By Chuck Black

It's hard be believe that Palo Alto CA based SSL, a subsidiary of Westminster CO based Maxar Technologies, would drop any of its US government contracts, even a public/private partnership requiring private sector funding in order to proceed.

After all, acquiring US government and military contracts was the core reason why Richmond BC based MacDonald Dettwiler (MDA) began the process of reincorporation, or "US domestication," which turned the company into US based Maxar, a firm able to bid on American government and military contracts.

But, in the latest of a series of odd twists in the ongoing Maxar meltdown, the firm announced earlier today that it has:
...exercised its right to terminate participation in the Robotic Servicing of Geosynchronous Satellites (RSGS) program, a public-private partnership with the US Defense Advanced Research Projects Agency (DARPA), citing a need to focus its resources on ensuring optimal returns when weighed against other capital priorities, such as WorldView Legion. SSL remains unwavering in its commitment to its customers on all existing contracts...
As outlined in the January 30th, 2019 Maxar press release, "Maxar Technologies' SSL Terminates its Participation in DARPA's Robotic Servicing of Geosynchronous Satellites Program," the decision: consistent with Maxar's commitment to disciplined prioritization of capital. Maxar remains confident in the potential of the on-orbit servicing market and the value of public private partnerships. 
According to the press release, SSL will also be terminating its associated contract with Menlo Park CA based Space Infrastructure Services LLC (SIS), a company SSL created in 2017 to commercialized the RSGS technologies developed from the DARPA program. SSL is currently controlled by Menlo Park CA based Finance Technology Leverage LLC, a venture capital firm focused around  biotechnology, energy and space technology.

As of press time, SSL retains its role as prime contractor for the NASA RESTORE-L robotic satellite servicing mission, a fixed price NASA contract worth between $600 - $700Mln US ($800 - $925Mln CDN) designed around a SSL 1300 satellite bus equipped to service orbiting satellites. The first RESOLVE-L is currently scheduled for launch sometime in 2020.

But while the official reason for the contract cancellation is the need to conserve funds in order to help pay down the high debt load, that decision could be problematic over the long-term given the increasing popularity and use of public/private partnerships for NASA and US military procurement contracts.

The decision doesn't do anything to dispel the growing perception that Maxar is attempting to sell SSL, but has so far been unable to find a buyer.

For all it's worth, the RESTORE-L program isn't moving forward very fast either. As outlined in the March 19th, 2017 post, "American MDA Subsidiary Promotes "DEXTRE" for US as NASA RESTORE-L Satellite Servicing Budget Slashed," RESTORE-L funding was cut from $133Mln USD ($178Mln CDN) to $45Mln US ($60Mln CDN) for fiscal year 2018.

FY 2019 funding for RESTORE-L is caught up in the fight between the US president and congress over funding the proposed US/Mexico border "wall" and hasn't yet been formally approved.

As outlined in the June 12th, 2018 Space News post, "Senate bill restores funding for NASA science and technology demonstration missions," the original FY 2019 Senate budget bill approved by the US Senate appropriations subcommittee in June 2018 included $180Mln US ($237Mln CDN) for RESTORE-L.

However, the article noted that "NASA had proposed turning Restore-L into a more general technology development program rather than a full-fledged mission to demonstrate satellite servicing technologies."

Part of the reason for that could potentially be related to Maxar's insistence, as outlined originally 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," that no Canadian based Canadarm technology is being used by Maxar in any of its US projects.

If NASA feels the need to first "develop" the necessary technology before moving ahead with a full fledged mission, there must certainly be questions about Maxar's ability to fulfill the RESTORE-L mission within the scheduled time frame.

Of course, there could be another reason. If the market for geosynchronous satellites has crashed, there would certainly be less need for satellites to repair the big geosynchronous satellites, which are in the midst of being replaced by larger constellations of smaller, easily replaceable low and medium Earth orbiting satellites.

Now that's an interesting thought.

Expect more bad news about Maxar and its subsidiaries to surface reasonably soon.
Chuck Black.

Chuck Black is the editor of the Commercial Space blog. 

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