AFA National Symposium and Annual Air Force Ball
November 19, 1999

General George Babbitt
Commander, Air Force Materiel Command
National Symposium and Annual Air Force Ball
November 19, 1999

It is a pleasure to be here. John Shaud mentioned earlier that I brought a lot of friends with me. I thought I should explain that comment. AFMC [Air Force Materiel Command] had a commander’s conference this preceding few days up at Edwards Air Force Base. There was some forethought that went into that, but as it turns out, since we were in the area, it offered the opportunity for those commanders to participate in this symposium. That fits the idea that we are training ourselves to pay attention no matter what we do day by day with the issues of space. This sometimes in the past has been a symposium attended only by people who principally pay attention to space, so there are a lot of us here that are learning.

That is another point I wanted to make: This is the second opportunity I have had to speak to this symposium. Last year I came here wondering, what in the world am I going to say to a bunch of space experts having grown up as an aircraft maintenance officer? And I have to admit I was a little intimidated. I am a little less intimidated this time, and that could be for one of two reasons: It could be that I am actually getting more comfortable with the issue of space, in which case maybe we are making progress; it could also be that, as with Dick Myers, I am just getting toward the end of my term and I am getting a little more crusty and courageous, and so I speak out and say whatever I want. We’ll see.

Anyway, I’ve got some things that I’d like to talk about – a little bit different than what the chief and General Myers talked about, but I think these are still issues that are worth your thought and discussion.

For 17 years AFA has conducted a symposium here in Los Angeles and for 17 years AFA has provided a great forum to discuss the most important national security issues facing the United States and the Air Force. I know there is a highly distinguished panel that will follow me so I appreciate the importance of making my comments brief. Looking to space for answers to today’s most compelling military questions is something we’ve all learned to do. In fact, for some it has become an obsession, and that reminds me of a story I heard about Dick Myers: It seems that as soon as the weather turned nice after Dick and Mary Jo moved to Colorado Springs, Dick planned a weekend camping trip up in the beautiful Rocky Mountains. On a crystal clear Colorado night, he and Mary Jo lay gazing up at the stars. She asked him, "Well, honey, what does it mean when you look up there?" He said, "I see danger." "Danger?" she wondered. "Yep. In my business I know that there are over 150,000 pieces of untracked space debris orbiting the Earth, any one of which could destroy one of our precious satellites." Mary Jo shook her head, "No, Dick, it means somebody stole our tent."

Let me get to the point. General Ryan and General Myers both made it quite clear in their presentations that America’s ability to fight and win in the 21^st century depends on its ability to exploit space capabilities. That is not an issue that requires much debate in an audience like this one. But what can generate debate is how will we pay for it all? How can we modernize the force in a way that preserves current capabilities, creates new capabilities, and does so within a fixed or even a declining top line. We’ve drawn down force structure, but there appears to be little more to give. Further force structure reductions are not likely to fund our needed modernization. We’ve re-engineered, out-sourced, and privatized our infrastructure. And although we have found significant savings, they do not appear to be sufficient to finance needed modernization. It may be that the military needs of America can no longer be satisfied within a fixed or declining topline. Certainly no one area of cost reduction promises to solve all of our problems. I expect the solution is a little bit of all: more top line and continued cost reduction. It is in that light that I’d like to spend some time talking about an initiative that we may not have yet fully explored.

That initiative is commercial space opportunity. Like other cost reduction initiatives, it probably won’t pay the whole bill. But it may pay part of it, and so we should be sure that we have really wrung it out before we discard it. The goal of this initiative is a little different from the normal out-sourcing initiatives. The objective was to reduce or eliminate DoD capital investment in capabilities that were similar to capabilities found in the commercial market and to focus DoD investments on unique military capabilities.

The Commercial Space Opportunities Study was commissioned to see what more could be done. Air Force Space Command and the Space and Missile Systems Center provided most of the study support, and the formal outbrief occurred last month. Their conclusion was that not many opportunities existed. I, for one, was surprised and a little disappointed. I wrote an e-mail to Dick Myers soliciting his thoughts. It seemed to me that we shouldn’t let this idea drop. If we could figure out how to take advantage of commercial space, it would help us put together a more reasonable and affordable space investment program. I got notes and comments back from several folks who saw my e-mail. One note in particular was very thoughtful. The author had been a member of the Commercial Space Opportunities Study team, and he wanted to explain some of the issues the way the team saw them. I was influenced by his comments. I was also emboldened--enough so that I decided to use this opportunity today to raise some of those issues that still may require debate before we put the subject of commercial space opportunities to bed.

I want to limit these remarks to opportunities where we actually buy commercial services, instead of owning the means of production. There are many opportunities to hire contractors to operate our equipment or facilities, and we should continue to pursue those opportunities where they make sense. But that is not what I am talking about today. In my e-mail to Dick I used an example of the kind of thing I am talking about: we shipped spare parts to units engaged in the air war over Serbia using FedEx. We didn’t own FedEx aircraft or their hubs. We simply paid them to deliver to parts on demand, and that is what I mean by a commercial opportunity.

Throughout these discussions, five mission areas were most frequently mentioned: launch services, range support, wideband communication, navigation, and remote sensing. I’d like to discuss some of the obstacles that appear to prevent us from taking advantage of commercial opportunities in these mission areas. And in each case, my purpose is not to argue that no obstacle exists; my purpose is to acknowledge the obstacle up front and then encourage debate that may result in ways around the obstacle. Bear with me a few more minutes.

Obstacle one. We give away our technical advantage by relying on commercial services that will also be available to our adversaries. That may be true in the case of wideband communications, navigation and remote sensing. But on the other hand, access to these services does not automatically convert to combat capability. It takes a sustained commitment to tactics, doctrine, training and hardware to fully exploit these space-based services. Few of our potential enemies have made that investment. We need to be sure before we rule out commercial options.

Obstacle two. The requirements and program approval process is long and arduous. There is little incentive to revisit our approach on programs that have already made it through. True. There would be risks and even disruption. But there are many military space programs waiting in line for investments where no opportunity for commercial investment will ever exist. We need to be sure before we rule out commercial options.

Obstacle three. Commercial systems often use proprietary wave forms, non-standard interfaces and provide little coverage in limited market areas. These can be serious problems for military customers, causing proliferation of user equipment and driving up costs. So let’s focus on the issue: What can be done to encourage commercial operators to comply with common user interfaces? What additional investments would be required to expand coverage into areas of military interest? We need to be sure before we rule out commercial options.

Obstacle four. Industry is interested in commercial operation of ranges, but not interested in range investments or any form of cost recovery. This is a problem, since our stated goal was to seek commercial investment or at least cost recovery for commercial-like services. One can certainly understand industry’s reluctance to add any cost to commercial launch, but that reluctance should not inhibit a continued dialogue over how to make it happen. This may be one of our most promising opportunities, and we need to be sure before we rule out this commercial option.

Obstacle five. U.S. Government policy prevents commercial investment in the GPS [Global Positioning System] constellation. It also prevents any form of cost recovery for the Air Force investment. This is a problem. Few space systems seem to fit the model for commercial-military sharing better than GPS. Open system architecture recommendations could lead to participation of other civil, commercial or international organizations and therefore, a sharing of the costs of providing worldwide navigation signals. I am sure I don’t fully understand the concerns of those who feel this is the wrong approach. But I do understand that GPS has created a thriving commercial market and that continued Air Force investment in that constellation diverts resources from systems that will never have a commercial appeal. We need to be sure before we rule out commercial options.

I think I’ve gone on long enough, so let me summarize. I don’t believe we have sufficiently explored commercial space options. What exploring we have done has met with obstacles. Rather than stirring our competitive juices, these obstacles seem to have stopped us in our tracks. I believe we need to go the next step. Let’s take these obstacles, accept their validity, but work to overcome them. I think we already have one shining success in the EELV [Enhanced Expendable Launch Vehicle]. Our investment ensures us that each contracter’s family of boosters will handle our range of payloads. But the real design challenge for each contractor team is to build a rocket that can be competitive in a commercial market. We will buy launch as a commercial service. This was not an arrangement born overnight. It grew and evolved over several years. We need to put that same effort and commitment into other promising areas. Gene Tattini stood up a commercial exploitation office at SMC [Space and Missile Systems Center] recently. Its charter is to carry on the work of the Commercial Space Opportunities Study. I invite Space Command, NRO, DISA [Defense Information Systems Agency] and industry to work with SMC to find ways around obstacles and to take greater advantage of commercial space services.

I am sure we will not complete this effort easily or through it solve all of our modernization problems. Some of the obstacles will truly turn out to be insurmountable. But with work, some may become opportunities, like EELV. And for each opportunity we turn into a success, we will have freed up resources to invest in capabilities that could support space control and force application missions, missions that are unlikely to ever have a commercial analog. Thanks for the invitation.

General Shaud: The first question, every program office in the Air Force is apparently critically short of Air Force engineers, some to the point of having programs be non-executable. Sir, what are you doing to recruit, retain and maintain the Air Force engineering work force?

General Babbitt: I am going to answer that in three parts. The first part is a recognition that AFMC is an acquisition command, which I guess we all recognize, but also an engineering command. We need to re-establish in everybody’s mind that engineering is heart and soul of what we do in the Air Force Materiel Command, and that is an essential part of the Air Force. The second part: We need to look at our military engineering program and why we do have such great shortfall right now. This turns out to be a fairly complex problem, and it is related to, believe it or not, pilot shortfalls. We do attract many, many new young officers coming from good engineering schools with good credentials every year. However, the Air Force only assesses so many officers to fit its total officer requirements. We are behind right now in our pilot production and have been for some time. So, a bigger percentage of those accessions goes into the rated force, as it needs to be. For awhile that means engineering and other disciplines will under-assess and under-train. That is a problem we’ve got to work, but I tell you it is a very tough problem. We have been working that with the Air Force DP [Deputy Chief of Staff for Personnel] community and with the personnel center. The third part of the answer has to do with civilian civil service engineering force. We have been in a downsizing mode for so long, we’ve sort of gotten used to that. One of the ways we handled downsizing was to not assess new young engineers, and we have lost the habit and maybe the ability of doing that. At our commanders’ conference this week, we began to realize that we are now in a position where we sort of bottomed out on our downsizing and we can hire new people to fill those vacancies created by the folks that leave this year and next year and the year after that. So one of our projects in AFMC is to get back up to speed so we can recruit and train those new civilian engineers and bring them into the Air Force to fill those positions.

General Shaud: The Air Force is looking to industry to carry more of the load in the area of space R&D and infrastructure. How realistic is this in light of industry’s focus on the market and short-term ROI [Return on Investment]?

General Babbitt: That is an interesting question. I have tried to follow by paying attention to what goes on in AFRL [Air Force Research Laboratory], just how much industry is investing in pure research. The fact of the matter is, it doesn’t appear that it is a whole lot. It does appear that industry’s R&D investment is little "r", big "D." We need to continue to be the providers of that fundamental research for the technologies that are necessary to exploit space in the future. We have struggled with the AFRL, and the science and technology budget in the Air Force this year represents a fairly significant change in shift in that investment, and we’ll continue to struggle with that. We are, I think, the principal providers of that technology.

General Shaud: As a follow on to that, how do you define a military unique investment?

General Babbitt: Space-Based Laser strikes me as a military unique investment. It is hard to imagine a commercial market there. At least, one would hope not. I would say that there might be certain kinds of remote-sensing capabilities that are truly military unique. That probably isn’t too far in the past that all remote-sensing from space was considered military unique, but nowadays there are commercial uses for that same data. Maybe it isn’t a sharp definition, but it is sellable in the market right now. But I think you can see there are some things that are marketable and there are other things probably that aren’t.

General Shaud: This comes from recent press reports that suggest the DoD Comptroller has again proposed termination of Discoverer II. If the program is canceled, what does this mean for the future of space-based radar?

General Babbitt: I would love to answer that question, but I don’t know the answer and so it would be silly for me to try to stand up here and answer it.

General Myers: [From the floor] I do. If it’s cancelled, we’re going to have about a 10-year gap in technology before we get to the next leap. So we’ve just given up 10 years. Go back to my speech: I mean, it’s not much money to put in this technology to see if we can get it at a cost we can afford; that it can become an operational system. So we’re going to forfeit, my guess is, 10 years. It goes back to my pebbles--how many pebbles do you want in your saddlebags when you get to the year 2010?

General Shaud: Do you think that DoD would ever turn over the ownership of such a thing as the operation of GPS to a commercial or international organization?

General Babbitt: I would expect that there are some capabilities that we derive from the GPS constellation that General Myers and General Eberhardt would insist have to have overall control from us, but somehow there must be a way that we can continue a dialogue that says the GPS constellation provides many, many other services, and it has great commercial value, and therefore there ought to be some sharing of responsibility, including operation and certainly of revenue sharing with our commercial partners.

General Shaud: Could you give us some insight on the status of research for space systems protection?

General Babbitt: No, I can’t. That is another one I don’t know the answer to.

General Myers: [From the floor] Well, that’s part of that line, I think, that space control, that we got from Congress, now [when] we flesh out this budget, part of that will go to that.

General Shaud: You mentioned EELV as a way of buying commercial launch services. What is a commercial service that you would gain, in your view, with the EELV?

General Babbitt: I think the thing that most impresses me about EELV is the structure of the program and the example that it sets for how we might have relations with contractors in the future. I am sure there are many, many things that have to be worked out in EELV to make it successful. But I see the relationship that we have with the two principal contractors in EELV now as our position is more one of being a venture capitalist rather than being a buyer of the production or the development of the production of a particular launch vehicle. What we’ve done is put our money into the program as a venture capitalist and the consideration we get back is that those two contractor development teams have agreed to build launch vehicles, a family of launch vehicles that will launch our range of payloads to the various orbits that we need to put them at and do that with a common interface. We say, "Thank you very much." Now every launch in the future we will buy cost on delivery just like the commercial people do, and we hopefully will buy it at the same price that the commercial people do.

General Shaud: Last question: This is the obligatory BRAC [Base Realignment And Closure] question. With regard to depot work, in your view after all the BRAC actions are finalized, where will our depot work be accomplished?

General Babbitt: I am going to narrow the question. What we are talking about is the depot maintenance workload that we perform organically in house. As we complete next year the closure of Sacramento [Air Logistics Center, McClellan AFB] and San Antonio [ALC, Kelly AFB]--and we will actually complete that within less than that time frame; most of that work load is in the process of moving right now--we will be doing organic depot maintenance at three locations--Ogden [ALC, Hill AFB], Tinker [AFB] and Warner-Robins [ALC, Robins AFB]. We have had two depot maintenance off sites to plan that strategy for the future with the Chief and the Secretary in the last nine months, and I think we have a pretty good understanding of what we need in the future, what organic capability we need as a hedge against risk, not as we do it rather than private sector, but as a hedge against risk. We have sized our capacity now to about 80 to 85 percent of what we think is the need, and we think that is about right. These things change over time. I imagine if two years or three years or four years from now somebody made that same assessment, they might come up with different numbers, and that is the way we’ve set up the program. The Air Force should reassess it periodically and then make different decisions in the out years about how we would size it. For the next six to seven years, I see our current depot sized about right, and therefore the issue of whether we need less depot maintenance capacity at those three locations appears to me to be straightforward. Remember, those three bases where that depot maintenance is performed are multi-mission bases. Many activities go on, including operational missions at those locations. The Air Force’s issues overall in BRAC will be to look at those installations and say, how many installations do I need? The depot maintenance question is only part of the issue with each of those installations.

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