An artist's rendering of a Defense Satellite Communications System satellite in orbit. / US Air Force
WASHINGTON — Pentagon funding for space programs is projected to fall 37 percent over the next four years when compared to last year’s projected spending over the same time period.
The combination of fewer US satellite purchases — and thus fewer spacecraft launches — is the main driver for this shift, according to data provided from the Virginia-based analytical firm VisualDoD.
But the lower dollar amounts do not necessarily mean the US Defense Department is reducing its capabilities, experts say.
“Just the fact that we’re asking for less money doesn’t necessarily mean that we’re getting less than we did,” said Marco Cáceres, senior analyst and director of space studies for the Virginia-based Teal Group consulting firm. “In many cases, we may be getting more than in the past decade.”
During that decade, military requirements for immature technologies have contributed to cost overruns and schedule slippage on satellite programs, like the Transformational Satellite Communications System.
While federal budget pressure has contributed to less-than-planned spending across many defense sectors — including space — existing satellite constellations are lasting longer than planned, thus delaying the immediate need for expensive replacements, experts say.
DoD also has been planning changes in the makeup of its satellites, putting more payloads on a single spacecraft, thus returning a bigger bang for the buck since multiple launches are no longer required.
“They’re trying to find ways to develop and build and operate their satellite systems a lot cheaper,” Cáceres said. “My sense is they’re going to save a lot of money there in terms of satellites.”
For fiscal 2014, the Pentagon projected spending $19.2 billion on space programs from fiscal 2015 to 2018. However, DoD’s fiscal 2015 budget proposal, sent to Congress in early March, paints a much different picture.
Now it is projecting spending $14 billion on space projects across that same period, according to the data.
“They just don’t have any huge new-generation satellite systems,” Cáceres said.
The US Air Force’s 2015 budget delays two planned purchases of Lockheed Martin GPS III satellites — one in 2015 and another in 2016 — and extends delivery of Space Based Space Surveillance follow-on spacecraft. In 2015, about two-thirds of DoD’s $3.2 billion space procurement budget request resides in Air Force coffers.
The Air Force also has negotiated savings in the Evolved Expendable Launch Vehicle program, according to service budget documents. And it is looking to leverage savings by contracting private companies for space launches as opposed to using the United Launch Alliance, a joint venture between Lockheed and Boeing.
While procurement in this sector is declining, spending on space-related research-and-development projects is up $1.5 billion, or 21 percent above levels projected a year ago, between 2015 and 2018, according to the VisualDoD data.
DoD projected spending on rotary aircraft programs is actually expecting a slight uptick between fiscal 2015 and 2016 before declining between 2016 and 2018. That decline, however, is less steep than projected one year ago.
In 2014, the Pentagon projected spending $25.3 billion on rotary-lift programs from 2015 to 2018. The 2015 projection jumps nearly $7 billion to $32.2 billion.
And those figures could jump even higher if Congress adds money for additional helicopters that DoD requested in the Opportunity, Growth and Security Initiative, a White House-backed spending bill separate from the Pentagon’s budget request.
The initiative includes a $1.2 billion request for Boeing AH-64 Apache and H-47 Chinook and Sikorsky H-60 Black Hawk helicopters. The Navy also must decide whether to purchase 29 additional Sikorsky-Lockheed MH-60R submarine-hunting helicopters in 2016, which could add even more to planned helicopter spending.
In the short term, Apache procurement is expected to increase and is about $350 million greater than projections in 2014, according to VisualDoD data. Black Hawk production for the Army also climbs and the Air Force Combat Rescue Helicopter program is supposed to ramp up in the coming years.
Toward the end of the decade, the Navy is looking at replacing its Bell training helicopters with a new aircraft.
DoD’s planned spending on unmanned aircraft also is down more than 30 percent, or $1.2 billion from planned levels, as buys of current systems — such as the General Atomics MQ-9 Reaper — are expected to shrink. Still, unmanned system procurement is expected to start growing again in 2017 and 2018.
The big wild card is that DoD’s five-year base budget projections in its fiscal 2015 spending proposal are $115 billion over federal spending caps, meaning procurement profiles could be significantly altered if caps remain.
In an April 24 note to investors, analyst Byron Callan of Capital Alpha Partners said speakers at a Bloomberg event were not optimistic that US defense spending would rise in the coming years.
Speakers said that after the mid-term elections, “the key ‘signal’ to watch indicating whether budget caps can be avoided in FY16 and beyond is how much pain is felt from cuts to non-defense discretionary programs,” Callan wrote.
The projections should be taken with a grain of salt, said Gordon Adams, a Stimson Center analyst who ran defense budgeting during the Clinton administration.
“This is budgeting, this is not planning,” Adams said. “What actually is going to happen to the market in the out years is probably better suggested at the top line [budget] level than at the programmatic level because they don’t know.”