Time for a New Approach with Satellite Control Network

The Satellite Control Network (SCN) has provided critical operations and support to our Nation’s military and intelligence satellites, along with our civil satellites and spacecraft, for over six decades. With a significant change in the threat to these systems and increasing numbers and volume requirements, the U.S. Space Force should undertake a comprehensive view of the SCN acquisition and sustainment strategy to make a revolutionary change to optimize this essential infrastructure. Elara Nova Founding Partner Maj Gen (Ret.) Roger Teague, and Partner Col (Ret.) Mark Hughes provide their insight regarding the elements of this change and desired outcomes in “Time for a New Approach with Satellite Control Network.”

Read more here…

Episode 32: Space Force Working Capital Fund to Facilitate Flexible Funding for Commercial Services

The Elara Edge Podcast

Host: Scott King 

SME: Maj Gen (Ret) Roger Teague, Founding Partner at Elara Nova (RT) 

Mike Dickey, Founding Partner at Elara Nova (MD) 

00:02 – 01:18 

Space Systems Command recently announced that the United States Space Force will have access to a working capital fund to buy commercial space services on-demand. But the fund, which is authorized to hold up to $1.2 billion in a given fiscal year, is not actually new money appropriated by Congress to the Space Force. Rather, it presents another flexible funding option to move money around in response to emerging mission requirements. 

The timing of the announcement also coincides with the Acquisition Transformation Strategy, an initiative recently unveiled by Secretary of War Pete Hegseth. Together, these actions represent how the Space Force, and the Department of War at large, is actively reforming how it acquires commercial services from industry partners. 

Welcome to The Elara Edge! Today’s topic is the Space Force’s access to a working capital fund and how it relates to the broader acquisition reforms for the Department of War moving forward. Joining us are two of Elara Nova’s Founding Partners. 

Retired Major General Roger Teague is the former Director of Space Programs for the United States Air Force, where he directed the development and acquisition of space programs for Air Force major commands. 

Sir, welcome to the show!  

01:19 – 01:19 

(RT) Thank you. Great to be with you.  

01:20 – 01:29 

It’s great to have you.  

And then we also have Mike Dickey, the former chief architect for Air Force Space Command and the United States Space Force. Mike, welcome back.  

01:30 – 01:33 

(MD) Thank you, Scott. It’s always a pleasure to be on The Edge. 

01:33 – 01:44 

So the Space Force is now authorized to access just over $1 billion in flexible funding through a working capital fund.  

But let’s start with the basics here: what is a working capital fund?  

01:44 – 04:04 

(MD)Yeah, let me take a shot at that, Scott. And I think we need to take a little step back and talk about a couple different things about money in the Department of War. There’s a process by which the Congress appropriates dollars that the military services and the Department can spend and they put that in certain accounts, and specifically call out where the government can spend that money.  

There’s a separate process that involves: what are the avenues by which the Department of War disperses money to get the services and the products that they want? And that distinction is important here when you’re talking about working capital funds. 

So on the appropriations process, that’s a long process. So the services start thinking about their budget two years before the year that they’re going to need that money. And it goes through, puts and takes at the Department level, puts and takes the Office of Management and Budget. Then it goes to Congress. And Congress gets the ultimate decision and the authority of how much money and in what accounts it goes to do the things that they’re appropriating that money for. 

So you don’t have a lot of flexibility in any given year to move money around. But things change. And so especially in the area of like, logistics and buying fuel for the Navy and for aircraft or in the case of what we’re going to talk about buying communications capacity for the entire Department. 

Those things really fluctuate year to year. So there is this concept of the working capital fund that allows you some flexibility within the year of execution to take money that was maybe appropriated for something else and move it to the working capital fund to meet emergent requirements. And it’s usually, again, like in this logistics type of business where prices are fluctuating year to year. 

And so it’s not new money. The services have to decide to take money from something else and then put it into the working capital fund so it becomes accessible. So a working capital fund is almost like it’s got aspects of a checking account and a debit card. So the account is there, but there’s no money in it unless somebody that needs a service puts money into that and then they can use that vehicle to go buy the service.  

So it’s an important distinction that the billion dollar working capital fund is not a new appropriation from the Congress. It is the authority to use a flexible avenue to spend money that’s been appropriated for something else.

04:05 – 04:09 

And Mike, what are the advantages of using a working capital fund? 

04:10 – 06:02 

(MD)Yeah, the advantages are that you get some flexibility in the year of execution. Normally when the Congress appropriates money and you want to move money from one thing into another thing, you have to go back and ask permission at pretty small dollar levels and so that process can take months. It can not get approved.  

The working capital fund gives you that again, the billion dollars. So up to $1 billion we will allow to be put into that vehicle to be spent. So there’s even a limit on the working capital fund. Again, the common misperception is that it is not new money.

The Space Force did not get $1 billion of new money to spend through that working capital fund. It just creates that avenue to spend and that working capital fund, while new to the Space Force, is not new to the Department. The Defense Information [Systems] Agency had this fund for years and years and years that we were buying satellite communication through. Once the Space Force stood up and got legs under it, that’s been moved over to the Space Force and allowed also to use not just for satellite communications, but for some other services that they might buy too. 

It’s always about services and we can get into that too. What I’ll say about that is the working capital fund accesses services from companies that already have those services available. So satellite communications is a good example. We buy 80% of the communications that are needed for the Department through commercial providers that are supplying those services across the globe. 

And so the working capital fund will prescreen a set of companies that have services that the Department is likely to need and those sort of sit astride that working capital fund and then as an army brigade or a carrier strike group or an Air Force expeditionary wing is going forward and needs a surge in capacity, they can take some of their money that might have gone towards paving a parking lot at the base and put it into working capital fund and buy that capacity as they move, as they move forward. 

06:03 – 07:01 

(RT) Scott, if I could, I would also add, I think from a big picture perspective, the working capital fund really gives operational agility. It really enables faster acquisition, especially now as the Department seeks to acquire, I know we’re going to talk a little bit more about Secretary Hegseth’s mandate and acquisition reform. But I really do believe that this is a great tool to be able to accelerate acquisition.  

And I think another great feature is that you can buy in bulk, and you got a centralized management function that’s able to buy services. Comm is a great example of that, that you’re able to have a centralized focus, but yet buy a large quantity of services and or capability.  

And the other thing that I think that’s a real advantage is that the services that are typically acquired under a working capital fund’s construct are paid for by the actual users. They’ve got skin in the game, and there’s good alignment, if you will, between the acquirer and the actual operator or user.  

07:01 – 07:06 

And what about disadvantages? Are there any risks or challenges that need to be considered? 

07:06 – 08:01 

(MD)Well one limitation of a working capital fund, it is, sort of year of execution. So it’s not a long-term contract like a lot of companies would like to get a five-year contract to help provide services, provide products, whatever it might be. This is sort of a year of execution. So in fiscal year 2026, which is the year we’re in now, if a Combatant Commander or that army brigade puts money into that pot, they can buy those services for the rest of the year. And then they got to start that process over again in the following year.  

So and it’s not buying things, right? It’s like buying services that already exist. So it’s not a path for companies to build new products, build new satellites, those types of things that you normally think about.  

It is certainly by selling the services, they can then reinvest in the back side of the infrastructure and help make those products more, services more valuable. But it’s really providing a service in the year of execution for that operational agility that Roger talked about.  

08:01 – 08:29 

(RT) Yeah, I would add one more in that it’s related to one of the advantages, that it also presents a disadvantage and or a risk in that it’s dependent on customer funding. And if the customer reduces their usage of a particular service, that fund may shrink, which may ultimately affect service continuity throughout the enterprise or as they had planned it, as an organization may have planned that. So it’s something that the acquisition organizations certainly have to be cognizant of.  

08:29 – 08:43 

Now much of the government’s acquisition protocols can be traced back to the Federal Acquisition Regulation, otherwise known as FAR.  

What influence does the FAR have when it comes to understanding how the government buys a commercial product or a service? 

08:44 – 09:45 

(MD)Yeah, I’ll say that there’s a couple of big chapters in the FAR that come to play here. The FAR Part 15 is buying bespoke military equipment – an aircraft carrier is something that’s not a commercial product, right? A fighter, a stealth fighter is not a commercial product. 

But if there is a commercial market for things, the government has a lot of black Suburbans, right? Those are basically commercial products. And so a different chapter of the FAR applies [here], which is FAR Part 12, which is buying a commercial product or commercial services, and that is basically you don’t get to decide a whole lot. 

You can say you want the black ones. But other than that, you’re buying a commercial product and you can do that in a much quicker way with less onerous cost accounting and all that kind of thing. Because there’s obviously a commercial market you can look up mSRP on those black suburbans.  

So the FAR Part 12 allows [you] to go buy those things off the commercial market when a commercial product can largely satisfy with a little bit of tweaking, perhaps, around the edges of military function. 

09:46 – 10:50 

(RT) The government really approaches buying services and products very differently. First it’s driven by acquisition strategies. The intended product or service lifecycle. How long am I going to be doing it? And then ultimately, what is the performance and its associated metrics? What outcomes am I looking to achieve with a particular product and or service? 

A service is really people and time-based. And products are really deliverable and spec-based. And so there’s some real core distinctions that I think it’s important to be mindful of as we look at that and acquisition officials are very attuned to as they consider their acquisition strategy.  

A lot of times, you’ll see contract types especially associated with service acquisitions for time and materials or some type of cost reimbursable construct, whereas, more often a product acquisition, now is more typically aligned under a firm fixed price or delivery order based construct, versus the other flexible way, if you will, more flexible, maybe, service-oriented acquisitions.  

10:51 – 11:14 

And then there are other, somewhat flexible ways the Department of War can use money appropriated to them by Congress, and I’d like to compare and contrast some of those options with the working capital fund. 

We’ll start with operations and maintenance funds, otherwise known as O&M, and then OTAs, Other Transaction Authority. So can you describe the relationship between how a working capital fund is either alike or different from those other two options?  

11:15 – 13:05 

(MD)The O&M funds and an OTA are sort of a little bit apples and oranges.  

So the Operations and Maintenance is what we call a color of money. It’s a category of money that is appropriated by Congress to do just that: operations and maintenance on a daily or weekly basis and that money is good for a year.  

So if you’re fixing up the base, if you’re flying hours for your jets, those types of things are built into the Operations and Maintenance account. In space, it’s the operations of the squadrons that are actually flying the satellites. So that’s a color of money.  

Again, an OTA is kind of like what we talked about in the working capital fund discussion is a pathway to buy things from the industry. So Other Transaction Authority means it’s outside. We mentioned FAR Part 12 and 15 – those are specific authorities. The Other Transaction Authority is sort of “and everything else,” right? So it’s a path through the contracting world. That allows you to be much more flexible in the terms and conditions negotiation with the contractor and there are some important eligibility requirements to fit into an other transaction. 

One is: are you a non-traditional contractor or do you have a non-traditional supplier as part of that contract? Because those nontraditional suppliers don’t have a certified cost and accounting systems that the Defense Department normally wants, and all the other trappings that come with working with the government. It’s a pathway to get to a non-traditional supplier base, and I think we’ll probably talk about that when we talk about acquisition transformation.  

The other way and this is important in this day and age is in Other Transaction Authority – you can be eligible for that if you also if you cost-share with the government. So in a world where we have hundreds of billions of dollars coming into this base world from the private capital markets – an Other Transaction Authority is a good way to tap into those sources of capital so the government isn’t footing the entire bill for a product or service. What did I miss, Roger? 

13:06 – 13:50 

(RT) No, I think that’s excellent, Mike. The thing I would footstomp is the fact that OTAs are contract mechanisms. They’re not funding sources. As we talked about working capital funds and O&M and whatnot ever, an OTA is a contracts mechanism.

And, while the really the working capital funds obviously are financial structures, OTAs represent external acquisition pathways to get work done. You see them typically utilized by DIU, SpaceWERX and AFWERX, non-traditional vendor kind of arrangements, is really the most often use case that I think is in service today. But it does give the flexibility for non-FAR based contracting, especially for R&D and prototyping, which is very, very helpful.  

13:51 – 14:10 

Earlier Mike, you emphasized that working capital funds are designed specifically with commercial services in mind.  

And General Teague, you’ve been on The Elara Edge in the past to discuss the Commercial Augmentation Space Reserve, or CASR, which is also designed to enable the government to leverage commercial services. Can elaborate on how CASR relates to this conversation?

14:11 – 15:02 

(RT) Yeah, and I maybe footstomp like I just did for, really what I described for the working capital fund and the difference between that and the OTA. In that CASR, again, it’s a strategic reserve concept. It’s not a financial mechanism. 

Where the working capital fund – it’s operational, it’s transactional. CASR is really contingency based and it’s policy driven. CASR really intends to establish a framework to leverage commercial space capabilities, during national security or emergency needs it’s very similar to the Air Force’s Civil Reserve Air Fleet. And its intent is to provide access to strategic capabilities, whether it be in certainly for space, but it would be for launch or satellite constellations or capabilities and or data services, during crises or surge demand times. 

15:03 – 15:26 

Now, the Space Force’s access to a working capital fund is actually through The Department of the Air Force Working Capital Fund, which will account for space services through an Enterprise Space Activity Group. 

So I have a two part question here: 

One: what does the Enterprise Space Activity Group mean? 

And two: what is the relationship between The Department of the Air Force Working Capital Fund and the Space Force’s access to it?  

15:27 – 16:22 

(MD)So, there is only one working capital fund. It is the working capital fund under the Department of the Air Force. So the Air Force can access it and the Space Force can access it under specific limitations and those limitations are established in these activity groups.  

So that’s basically the checking account, or the debit card account as we talked about earlier. So the Enterprise Space Activity Group is the account underneath The Department of the Air Force’s Working Capital Fund that the Space Force gets to sort of have control of and that’s where the limit of $1 billion has been put on that Enterprise Space Activity Group.  

So, that account, that activity group, is where the Space Force will buy things like communications, like they’re starting to do with, tactical surveillance, reconnaissance and tracking, kind of activities. Other things have been allowed underneath that activity group, but it’s all part of one working capital fund that the Department of the Air Force controls. 

16:23 – 16:46 

(RT) I’m excited about it, Scott. Only because ESAG, or the Enterprise Space Activity Group, it’s managed under the Commercial Space Office, there at SSC. 

So you’re getting alignment there of commercial space services, obviously with the warfighter and allied needs, using working capital fund mechanisms to help streamline procurement. You’re really getting after the fight tonight challenge and I’m excited about it. I think it’s a great step forward.  

16:47 – 17:07 

(MD)They’re creating a toolkit, really, of access to these companies. So in the Commercial Space Office, you’ll have access through this working capital and the Enterprise Space Activity Group, you also have the CASR activity that Roger just spoke of. So they’re putting together this set of tools within that toolbox to rapidly go out to grab commercial services when we need them most. 

17:08 – 17:32 

As the director of the Commercial Space Office, Colonel Tim Trimaillo recently called the working capital fund, “an important milestone in integrating commercial capabilities into the architecture.” 

We’ve discussed the need for an integrated space architecture on the show before. But Mike, can you recap for our audience what we mean by ‘integrated space architecture’ and why is the working capital fund would be an important milestone toward this end? 

17:33 – 18:24 

(MD)The future architecture that the Space Force is headed toward is, what they call a hybrid architecture, a resilient architecture, you know, has diversity involved in it. 

And that diversity comes from a variety of spacecraft and capabilities in a variety of different orbits, coming from a variety of different suppliers, coming from both bespoke military systems and commercial services and products that can be bought off the market that have dual-use applications.  

So the Commercial Space Office allows access to that commercial side of a hybrid architecture and that office works alongside all the program executive officers at Space Systems Command to make sure that the commercial activity comes in alongside the military bespoke activity to to provide the combat effectiveness and resilience of the hybrid architecture.

18:25 – 18:39 

(RT) I would just add that’s where that utilization of the working capital, the Space Force’s working capital fund. It’s a major enabler of that vision. It’s going to allow very rapid, flexible acquisition of commercial services that plug directly into the national security space enterprise. 

18:40 – 18:52 

The Commercial Satellite Communications Office will be the first program that’s authorized to use funds from the working capital fund. So why is satellite communications an appropriate starting point? And what other capabilities can the working capital fund be used for? 

18:53 – 19:43 

(MD)This really comes from the history of the working capital fund. So the Commercial Satellite Communications Office has existed for a long time. And it existed, as I mentioned earlier, as part of the Defense Information Systems Agency, DISA, and when the Space Force stood up, that office was moved to the Space Force and so they have the workforce, the contracts, the relationships with all these prescreened vendors and the onboarding of new prescreened vendors. They have that legacy, that history. They know how to run that machine very, very well and so that just basically came in whole to the Space Force to do that.  

Now they have been given some expanded authorities to move beyond commercial satellite communications into some of the areas we’ve talked about: space domain awareness, tactical surveillance, reconnaissance, tracking. So those are sort of more nascent mission areas. But the system, the machine is the same.

19:44 – 21:13 

(RT) Scott, I think that there’s a number of different missions and or capabilities or services that are required and are needed on a recurring service based or modular kind of commercial capability. 

And this applies to a number of different space mission areas, to include communications. But take for instance, launch, launch services. You could have on-demand access to commercial launch providers for small satellites for rapid reconstitution. There’s a tactical unit that needs a responsive launch to deploy a particular sensor or capability in a constellation after a threat event has occurred or in advance of maybe, ISR providing indications or warning that an event may be about to occur. You could certainly use an asset that way.  

Another example would be like space domain awareness. If I had a subscription-based access to a commercial tracking and characterization, anomaly detection, there’s any number of different ideas there regarding space domain awareness. But the Space Force would have access to a commercial provider to continue to monitor adversary satellite maneuvers as an example, in geosynchronous orbit or geostationary orbit. 

And, you know, make sure that it’s just another set of eyes and ears, paying attention to what’s going on and fulfilling domain requirements. So I do think that there’s a lot of different missions that commercials can contribute to on a regular basis. 

21:14 – 21:27 

This brings us to the second part of our conversation, and that is the recently announced changes from the Secretary of War Pete Hegseth, who last month unveiled the Acquisition Transformation Strategy.  

Can you speak to some of the objectives the Secretary has laid out in this document? 

21:28 – 23:06 

(MD)You know, the Acquisition Transformation Strategy is all of like 39 pages and we commend it to your nighttime reading table. But it’s based on five big points and I’ll just quickly paraphrase each of those, and then we can kind of dig into the details.  

The first one is to rebuild a defense industrial base. So this is having access to more suppliers providing products and services into the Department. It’s about private capital, participating in that industrial base.  

The second one is elevating and empowering the acquisition workforce. So kind of making some fundamental changes and we can talk about what that workforce looks – like having longer tours, being portfolio-focused instead of program-focused. And really to get away from the incentives and sometimes the disincentives for these program managers, to sort of fall back on being compliance-based instead of taking informed risk decisions.  

The next one is to maximize flexibility. So this is kind of about all the regulations that are piled on top of the law and so the first move there was to eliminate the JCIDs requirements process that’s already underway. So things like that maximize the flexibility.  

Then to do rigorous enterprise, technical and execution excellence. This has a lot to do with sort of digital transformation, being able to do digital engineering and simulation and live virtual constructive training. 

And then the last one is lifecycle risk management. So in the lifecycle of a system, does the military have the organic capability to do repairs in the field? Do we really have insight into the supply chain and any risks there?  

So those are kind of the five big things. Probably the most interesting to talk about might be the first couple, which is about the industrial base and the acquisition workforce.  

23:07 – 24:33 

(RT) Yeah, I think it’s a really important point and it’s going to provide a lot of flexibility to former PEOs and or SPD’s, as we were back in the day. 

Even so, the PEOs took an important step to be able to control, and make decisions and trades within their programs, among their programs. I think the Secretary’s memo was being very deliberate in calling them Portfolio Acquisition Executives to emphasize the fact that they are fielding a portfolio of capabilities and those capabilities are designed to satisfy a particular mission area. 

And so there are a number of different trades that Portfolio Acquisition Executives should be considering, as they field capability in response to any threat.  

I think it’s great. It empowers the acquisition executives and the team and certainly speeds decision-making and it demands accountability, not only within the government but also from industry. 

And ultimately, this is all about speed – driving capability, shrinking acquisition timelines literally from years to months or even weeks. And I think it’s much, much needed, and complemented by a number of other initiatives that are in work right now, are really helping to take the foot off the brake, and the hands off the steering wheel and letting Portfolio Acquisition Executives really take control of and drive delivery of capability.  

24:34 – 25:00 

(MD)And just to tie this conversation to what we’ve been talking about as part of that portfolio of responsibility there’s an objective of the portfolio – of the missile warning portfolio or the satcom portfolio. And if that can be satisfied by commercial, those portfolio executives have the option to go to the commercial markets and buy this too, which is different. Really, the PEOs have really been focused on the bespoke military sorts of requirements. So this adds that arrow into the quiver as well. 

25:01 – 25:39 

(RT) I think that’s a terrific point, Mike. And one other one that I was really happy to see, likewise was, if you will, reducing the bureaucracy and really reforming the Foreign Military Sales, and requirements process. 

As you talked about the requirements, but being able to get after some FMS cases, in real and meaningful ways, I think especially as nation blocs like NATO, for example, look to field commercial capabilities, and or our friends in the Far East, likewise are looking to do the same. Hopefully we will have the ability to be able to be responsive and offer commercial systems and capabilities, much, much more rapidly. 

25:40 – 26:20 

And, Sir, you said that some of these acquisition reforms really place an emphasis on speed. I’d like to tie that to what’s known as Moore’s Law, which more or less states that technology becomes more and more powerful with every iteration, particularly as costs and size decrease. 

But it seems space technologies in particular have traditionally had long acquisition timelines, which meant that by the time the government gets a certain capability up on-orbit, that capability might be outdated already – simply because the technology here on Earth continues to advance that much faster. 

So my question for you is: how does this reform effort, and that emphasis on speed, factor into the Space Force’s acquisition needs? 

26:21 – 27:32 

(RT) Well, it just reinforces and underscores the exact construct that you just outlined there, Scott, in that you’re trying to take advantage of Moore’s Law. You’re trying to continually resupply and keep current the most capable systems that you can on-orbit. 

We don’t need to be reliant on 286 and 386 computer technology that may be fielded in some of today’s systems. And I use that as a reference point, but it’s illustrative of the challenge that a lot of time space programs field, because the satellites are so well built, they often live well beyond their design life by a decade or more. 

And so you’re, if you will, stuck in a system that’s performing against a performance baseline that was designed to maybe 10 or 20 years ago, be unable to take advantage of the capabilities that exist today. And so, as Mike alluded to earlier, you’ve got acquisition executives who now are going to be able to focus on portfolios and field updated capabilities, current capabilities, much, much faster, much more consistently aligned with their objectives and ultimately the warfighter needs. 

27:33 – 27:40 

Now, broadly speaking, how should industry, and particularly the commercial space industry, be thinking about these reform efforts?  

27:41 – 28:36 

(MD) I think the most important thing that individual companies can do is to try to understand the military problem that their product or service solves. 

And if they can understand the terminology of the day or pain points and those types of things to really understand what the military is trying to achieve and where they’re having trouble achieving it. It will allow the companies then to use again some private capital, perhaps their own internal research and development funds, to present solutions to the government and then the government with OTAs and all these other pathways we’re talking about, could rapidly say, ‘Yes, that’s not perfect, but it’s 80 or 90% of the way there. I love it, I want some of that.’ 

And to move forward in purchasing those products and services. So really understanding their government customer and the military problem that is trying to be solved is the best thing a company can do to get its product and services across the line, if you will.

28:37 – 29:49 

(RT) I took away a couple of additional thoughts there, and Secretary Hegseth’s memo was blunt. It basically said “Giddy up.” He said, move faster and invest more or we might just do it for you.  

They’re trying to drive speed. They’re trying to drive scalability. And so it’s a call to action, I think by certainly within the space industry to upgrade your production lines, your digital workflows, your plans for modular architectures, you’re wholly embracing commercial capabilities and standards, which gives way to offering commercial off the shelf solutions, any number of different, opportunities with regard to commercial – you don’t always have to wait for the bellwether program of record that lasts a couple of decades, because ultimately, in the end and I mentioned this before, I think that the Department is ultimately trying to drive accountability, not only speed, but accountability.  

And that these Portfolio Acquisition Executives, they should be demanding customers. They should be demanding buyers and expect industry to deliver and give the nation the kinds of capability it needs, at the price point that it expects, with transparent cost structures, and on delivery timelines that the acquisition community as a whole agrees to.  

29:50 – 31:52 

(MD)And so part of my training as an engineer is to figure out why the glass is half empty instead of half full. So let me offer a counterpoint here. Just a caution in this transformation strategy. And that is that this is not, unilaterally a decision that the Department of War can make. 

Congress appropriates the money. Congress likes to have a lot of control over how that money is spent. So whether Congress will have to sort of buy into this and provide some expanded guardrails, if you will, among the authorization and the appropriations process. 

I think there’s a reason to be optimistic about that. There’s actually both in the Senate and in the House, there are proposed space acquisition reform legislation, on the table for this, this year.  And so we’ll see how that falls out. And this transformation itself will need some funding, right? They’re talking about training and advanced digital tools and use of AI. So that will also need some funding. So it’s going to take a sort of an all-of-government sort of approach here to be able to actualize this strategy. I certainly hope that happens, but we’ll need to, kind of work the details. 

And the other thing I’ll say is, we got to this sort of onerous compliance-based process because every time there’s a slip in a program, then, ‘Okay, well, there’s probably three new policy things we can put in place to make sure that slip doesn’t happen again.’ And it just builds and builds and builds.  

What the Secretary is trying to do is provide those portfolio acquisition executives the ability to make informed risk decisions and sometimes those decisions are going to be wrong. And you have to be able to live with that and move on without then just piling back more and more bureaucracy to try to limit the decision space of that executive. 

Like to Roger’s point, we want those folks to be accountable when they make great decisions. We want to reward them. When they make bad decisions. If it was really a bad decision, then, well, we’ll be accountable in that way too. But usually those are professional acquirers and professional military men and women, and they’re going to make decisions that what’s the information at the time was the right decision and then we just deal with it from there.

31:53 – 32:17 

That brings this conversation full circle, as we’ve kind of discussed two broad changes. One was the introduction of the Space Force’s access to a working capital fund. And then two: the Acquisition Transformation Strategy that Secretary Hegseth recently unveiled. But I’d like to draw a thread between the two of them. 

What parallels do you see between the Space Force’s access to a working capital fund and the Acquisition Transformation Strategy?

32:18 – 33:04 

(MD) I believe the working capital fund, as important as it is and as useful as it is. It is a tiny step in this broader transformation strategy, right? 

There are so many things that the acquisition workforce has been hoping would happen over many years and that Congress has been wanting to happen over many years. That working capital fund is a little step, an important step, and there are a lot more steps to take and many of those have been outlined in the Acquisition Transformation Strategy. 

Many more are in the legislation that’s pending on the Hill. So, it’s all part of a broader focus on expanding the industrial base that we have available to us, taking advantage of the speed and agility of dual-use and commercial activities and making those apply to military problems that we have and we’ve got many. 

33:05 – 33:20 

Now, Elara Nova has also continued to evolve. As two of the founding partners at the strategic advisory firm, can you share some of the recent developments going on behind the scenes? 

How is Elara Nova prepared to connect what exists in industry today and where the government wants to go in the future? 

33:21 – 34:43 

(RT) Scott, I can take a shot at that. And I think maybe you’re referring or tying us back into particularly the Elara Nova Capital Advisory Services, our newly launched, strategic finance and investment advisory team.  

We stood it up at the beginning of the year, and it’s designed to bridge the gap between really space innovation, and the capital markets, whether it’s capital structuring, support for startups or, if you will, the prime contractors or even government-aligned ventures, providing strategic advice for growth and venture capitalists or infrastructure or technical due diligence expertise, even policy and compliance insight to help navigate the regulatory domain and, if you will, the environment that space companies operate within.  

Elara Nova really is positioned well, we’re just not a financial consultancy. It’s really a mission-aligned capital catalyst, so to speak. That allows us to help stakeholders across the space enterprise, help them deploy their capital with confidence. 

And they can do so in a risk-adjusted manner, and do so with confidence, because all of this, as Mike has alluded to comes together in a nexus of knowledge that ultimately allows us to raise all boats, from a space perspective, and continue to grow the enterprise in a real and positive way and make a real difference. 

34:44 – 35:19 

(MD)Yeah, well said Roger, I think we just sit at this exciting place, as you suggest, at this nexus between who are the people with the problems? And in our case it’s typically the space security, national security, and broader than just space now with aeronautics and adjacent cyber type of activities.  

Those customers with the industrial base that can solve those problems with the capital markets that can provide the fuel basically to solve those problems back to those customers. So, having that be a really dynamic and sharing ecosystem is what we are trying to do as a company and I think we’ve found some success.  

35:20 – 36:01 

This has been an episode of The Elara Edge. As a strategic advisory firm, Elara Nova is the trusted guiding partner that builds tailored teams to illuminate unseen opportunities and deliver impact across every domain.  

With the trusted insight to your decisive edge, Elara Nova is your source for expertise and guidance in cross-domain security. 

If you liked what you heard today, please subscribe to our channel and leave us a rating. Music for this podcast was created by Patrick Watkins of PW Audio. This episode was edited and produced by Regia Multimedia Services. I’m your host, Scott King, and join us next time at the Elara Edge. 

Episode 16: STRATFI and TACFI Programs Catalyze Funding to Overcome Valley of Death

The Elara Edge: Expert Insights on Space Security

Host: Scott King 

Subject Matter Experts: Major General (Retired) Roger Teague; Founding Partner at Elara Nova: The Space Consultancy (RT)

Rear Admiral (Retired) Boris Becker; Partner at Elara Nova (BB)

Jim Sullivan; Partner at Elara Nova (JS)

00:02 – 01:54 

SpaceWERX, the space innovation arm of AFWERX, recently announced the nine recipients of its first funding opportunity specifically tailored to bring space capabilities across the ‘Valley of Death,’ or the difficult transition of scaling a high-potential capability into a formal program of record. 

The funding opportunity comes through two programs: the Strategic Funding Increase or (STRATFI) and the Tactical Funding Increase or (TACFI). STRATFI and TACFI are designed to accelerate funding for start-ups and small businesses already receiving Small Business Innovation Research or (SBIR) grants – issued by the Small Business Administration. 

Through the STRATFI/TACFI Programs, eligible businesses can have their SBIR grants matched with additional funds from the Department of Defense (DOD) and private capital partners – an influx of cash that can help these businesses develop these capabilities and overcome the Valley of Death.  

Now, AFWERX is leveraging these funding programs through its SpaceWERX division to accelerate the acquisition of space capabilities for the warfighter. 

Welcome to the Elara Edge: Expert Insights on Space Security. I’m your host, Scott King. Today’s episode will serve as a round-table style discussion on how Valley of Death challenges affect start-ups and small businesses in the emerging space industry, and how the new STRATFI/TACFI funding opportunity aims to catalyze funding resources to overcome these challenges and meet DOD needs.  

First, I’d like to introduce retired Major General Roger Teague, founding partner at Elara Nova: The Space Consultancy. General Teague served in the the United States Air Force for 31 years, before transitioning to a career as an industry executive at The Boeing Company, Terran Orbital and the PredaSAR Coproration – where he secured over $25 million in Series Seed funding as he stood up PredSAR as its first employee. 

General Teague, welcome to the show!

01:55 – 01:57 

RT: Great. Good morning. And it’s great to be with you today, Scott.  

01:58 – 02:23 

We’re glad to have you here, Sir. 

Also joining us today is Elara Nova partner, retired Rear Admiral Boris Becker. 

Admiral Becker retired as the chief executive of the Naval Information Warfare Systems Command with the United States Navy, where he led an 11,000-person global organization responsible for the design, delivery, and logistics of the Navy’s digital, cyber, and space systems enterprise.   

Admiral Becker, thanks for taking the time to join us today.

02:24 – 02:26 

(BB): Hi, Scott. Thanks for having me. 

 02:27 – 02:48 

We’re happy to have you here, Sir. 

And rounding out our discussion today will be perspectives from Elara Nova partner, Jim Sullivan.  

With an extensive career as a C-Suite Executive and Board Director, Jim specializes in accelerating growth and profitability strategies for private equity firms, venture capital portfolios, public companies, and early-stage businesses.  

Jim, thanks for joining us today.  

02:49 – 02:53 

(JS): My pleasure, Scott. And, look forward to participating in this august group here.  

02:54 – 03:11 

We appreciate you being here. 

So our topic today is the Valley of Death,  which is a common phrase in military circles, but it can still mean a variety of things. 

So first and foremost, I’d like to define that term for this conversation. 

General Teague, can you describe what we mean by the Valley of Death? 

03:12 – 04:46 

(RT): You bet Scott, as you mentioned, it typically is associated with military programs and technologies. But I think even more broadly, in the financial and the business community, it really refers to those companies that are small and start-up in nature. And they may have a great technology or capability or business idea, and ultimately it’s about taking that great idea and transitioning it to a revenue-generating business. 

And that in and of itself is no easy feat. Particularly, a lot of small companies start out with some level of funding to initiate series seed typical funding that allows the company to get started and take the initial steps to field capability. But the real hard part is, then getting across that Valley to where ultimately there is a revenue-generating business, that is producing consistent returns that allows for further future funding and investment and overall business growth.  

Some don’t face this, but many do. And it’s particularly noticed in the defense business in that many times those companies have a single customer, and that’s the Department of Defense and so it’s important for those businesses to be able to consider, ‘Hey, how do I do this? How do I represent my product, my technology, my capability? How do I ultimately get the Department of Defense interested in that? And then how do I scale and how do I grow and ultimately field and deliver capability at the speed of need?’

04:47 – 05:17 

Thank you, Sir.  

So the Valley of Death encompasses a broad scope of complex challenges for the DOD and its industry partners. 

Now, the Small Business Administration, which oversees a program known as “SBIRs” – or Small Business Innovation Research – describes the Valley of Death in three phases: 

Concept Development, Protoype Development, and Commercialization. 

What does this three phase process indicate about how the government views Valley of Death challenges? 

Admiral Becker, let’s start with you.

05:18 – 07:38 

(BB): Well, I think from the government side of the equation, ultimately, it really is the same problem that the small businesses are having, because if the small business isn’t there to support the mission that the government is trying to acquire, then that’s a real problem. And so I think, it goes right back to what General Teague is talking about with the problems small businesses face in going from great idea to meet a general mission need that they understand, and then trying to take that into development and then from development, where they’ve got some initial investment, which might be friends and family. 

It might be Series A, etc., to a point where they’re on contract and if we use the Small Business Innovative Research terminology of phase three, i.e. a Commercialization contract. Where they’ve got real money and transitioning to a program of record-scale funding.  

The problem is that, from the government’s perspective it often struggles to find a way to close that gap, between having flow of dollars that in some cases initialize with the Small Business Administration and Small Business Innovative Research dollars, where they can fund that great idea, where they can develop that thought, that experiment, if you will, through PowerPoint engineering and into some initial design, and even maybe materials selection.  

Through into a phase two where they’re where they can actually have a contract to start to build stuff, mock-ups, advancing the technology readiness level.  

But then even there, that’s where the government can struggle sometimes getting from that phase two idea to a phase three where there’s program of record funding, to move it along. And in that middle, while waiting for a determination of that phase two award or waiting for determination on that phase three award, that small business is still struggling to pay the bills. 

All those people with the smarts and the engineering and the capability. They’re drawing revenue into salary. And if there is no revenue, then how do you create that salary? So it becomes a cash flow issue, and if the government’s problem can often be that they can’t generate the cash flow from the customer side to flow into the business side to keep the business actually operating. 

That’s kind of a long answer to your short question, but it really comes back to how to get the providers of that innovation, able to sustain the ramp from great idea, to great engineering, to mock-up, to fieldable design.

07:39 – 08:04 

JS: And I would add to that, to what both Roger and Boris stated that for a smaller, younger company that may not have been through a process with the US government, depending upon DOD. The bureaucratic hurdles, the lengthy procurement processes that we discussed, it is not for the faint of heart. And so those who are not prepared to weather the storm will fall to the side of the road.

08:05 – 09:09 

(BB): And I couldn’t agree more with what Jim is saying. To tie it back to some of the struggles that the government folks do face, it would be too easy just to blame it on the budgeting process. Everyone can talk about that. Throw rocks at it. 

It’s a one year budget cycle instead of a two year budget cycle. Unlimited oversight. Multiple layers in the chain of command. All those problems exist.  

But one of the most difficult problems that the government faces in taking that small business and being able to apply a risk-based decision approach to funding is that we often manage at a very defined requirement level, down to a project, instead of being able to manage resources at a broader level. 

So imagine, if you will, you’ve got a business GM responsible for P&L for a sector. But they are unable to move budget around in that sector and every decision of moving $1,000 has got to go to the board, and be board-approved. 

Imagine a company trying to function like that. Well, that’s a parallel you might be able to draw with government acquisition. And, Roger, I’d be interested to hear your take on that, that idea.  

09:10 – 11:10 

(RT): I agree with you, Boris. All of those factors really contribute and make the Valley of Death, so to speak, such a difficult challenge to overcome. The companies are very tightly restricted with regard to their spending ability. They have moments and windows of opportunity and pursuits as part of whether it’s Small Business Innovative Research projects or anything that would require some level of investment. 

Those are very important investments that those small companies are making. And oftentimes they get washed up in and amongst a number of competing firms or SBIR award and I’ve been vocal about the need for the government to be much more rapid and much more deliberate about picking winners and losers, to be able to help some of these companies that, ‘Hey, if they don’t have something that’s going to be of interest, then they can pivot.’ 

That allows the smaller companies to go pursue potential commercial approaches or solutions or markets, for their particular technology.  

Where they get crosswise is they put all their eggs in the DOD basket and that may not pay off in time. And or it takes too long to ultimately be selected for a potential SBIR award and they’ve spent a lot of the precious resources that they have, on some of those SBIR pursuits and ultimately are never selected. And I liken it to an individual or someone sitting at a park throwing breadcrumbs to pigeons. For those first couple of pigeons that are there. 

It works out great. But it just doesn’t take long before the entire park is covered in pigeons and the amount of breadcrumbs are the same. And so those one or two pigeons that might have had a real good idea to be able to bring to the forefront, they just completely get taken over by everyone else who might have something to say. 

And a lot of times those technologies and capabilities get lost and so it really is a very, very difficult challenge, especially if you’re pursuing solely DOD outcomes.  

11:11 – 12:22 

(JS): And I would add the inverse side of it as well, from a private sector and financial, industry perspective: over the decades, there’s been such an exponential growth and reliance on technology in general. 

And there’s an ever-increasing need to break down and have less of a silo mentality and really have that unified strategic and operational and financial mindset between government, industry and the financial community.  

Boris and Roger could speak much more, specifically about it. But the U.S government and the DOD really prioritize national security and mission success and readiness and stability and low-risk, all within the budgeting construct and the extensive oversight. 

In contrast, you’ve got commercial and venture-backed companies are really emphasizing growth, innovation and ultimately profitability, with flexible budgeting and a much higher risk tolerance than the government is structured to do and these differences really shape distinct strategic and operational approaches. 

There has historically been a fundamental difference, but there are a number of programs that are looking to break those down.  

12:23 – 12:58 

Now, the DOD is the largest federal agency that coordinates with SBIRs grants and its companion program, Small Business Technology Transfer or STTR. 

In the case of the STRATFI/TACFI programs, businesses can have their SBIR grants matched with DOD dollars, private capital dollars, or both, based on whether the capability they’re developing has a defense-only application or dual-use application – meaning it can be used for defense purposes and in the commercial marketplace.  

Why is it important to structure the STRATFI/TACFI programs this way? Particularly in how it aims to capitalize on the SBIR process? 

12:59 – 16:03 

(BB): It’s important to distinguish between, as Roger pointed out, a strictly DOD or very DOD-focused small business trying to bring an innovative idea into the marketplace as opposed to, a company that’s got a great idea that has identified a Total Addressable Market or TAM in the commercial world. And is looking to also have some DoD contracts. They’re kind of two different approaches.  

And frankly, there’s a third as well, which is someone whose got a strictly commercial play and that’s the only marketplace they’re looking at. Then somebody realizes from the DOD side, ‘Hey, that we could use that, let’s go get some of that.’ 

So three, sort of, different use cases. Let’s talk about, specifically, this idea going from concept development to prototype to commercialization. We’ll start with the target in mind – which is commercialization. That term in the lexicon of Small Business Innovative Research, and STTRs in somewhat can be misunderstood in some way because that commercialization doesn’t strictly apply to being able to take that development item as a production item and sell it into the commercial marketplace only, it refers to being able to take that item and, use it to support an existing program where an existing program element, a ship, an aircraft, a weapons system, has been looking for an answer to a tough technical problem. They see the outcome of this product development and concept development in the SBIR and then take it on. They buy it.  

That’s the dream. You start something. You designed it. You prototype it, you move it on and through phase two, and now you’re able to demonstrate it in an operationally relevant environment at the end of that. And then a program office comes and says, ‘I’ve got budget this year. Let me start buying some of that next year. Here’s your wedge and we’re going to ramp up production. How fast can you give me x number of widgets?’  

That’s the dream. That dream collides with reality and the problem with that collision is how long it takes sometimes to get through that cycle. If you’re a small business, completely dedicated to the OSD play or to the defense play, can you survive long enough on the cash you’ve raised, to cross into that phase three commercialization contract? Does the contracting cycle line up with where you are in development? It’s a very real schedule issue to hit that window where you’re ready to go. But it’s October and, where’s the money? 

There are advantages to going to the SBIR process. One of them is that you’ve been through phase one and phase two, you’ve been through competition, so you can go straight into production. But the money has got to be there. So there are all sorts of risks associated with this and yet a great community of innovators out there and businesses entrepreneurs and risk-takers, they keep going at it and we’re better for it.  

We would not be where we are, with the technology that we have fielded for our Armed Forces around the globe today without the small businesses in the country coming up with great ideas, taking risk. But often enough, they come through and thank goodness they do.  

16:04 – 16:59 

(RT): Yeah. Boris, I agree with your assessment and the way you characterized that. I would just offer just another thought that, and while it is challenging and as frustrating as it can sometimes be for small businesses, we have to acknowledge and tip our cap to both the Air Force as well as Space Force, on these AFWERX and SPACEWERX opportunities. 

While they have their own internal challenges and whatnot ever, the services are listening, and they’re adapting and they’re reaching out to industry and they’re trying to refine their processes to allow for continued maturation, and then bringing forward those capabilities as rapidly as possible. In the end, that’s what this is about: 

Bringing capabilities rapidly for the warfighter and I think both services have done a great job of that. They continue to improve. But it is important to acknowledge that, in fact, they are making good progress. But, there’s obviously miles to go before they sleep.

17:00 – 17:54 

(JS): And Roger, that’s so important because similarly, VCs are investing in any number of companies in the market. 

But, those VCs that specifically invest in space technology, although it’s growing, it’s only around 5 to 10 percent of VC firms who will focus on the sector. And it’s primarily driven by advancements in these programs that you’re referring to. 

But, if you’ve got 80 to 90 percent of venture capital firms prioritizing traditional non-space technology due to the maturity of these markets and lower risks. 

In contrast, you’ve got aerospace and defense and the space industry are very capital-intensive businesses with long lead times, as we’ve just talked about. So it is so important that other industry players out there who are getting in and being successful, will only help to increase the participation of the VC firms along with those other programs that you referenced earlier. 

17:55 – 18:42 

(RT): Yeah. I mean, really, Jim, this is a discussion about risk and investment philosophy and patience. Is the patience there to allow some of these investment opportunities to see them through, and a very fickle market and very fickle views toward space in general, in that regard. And so how do I know? 

How do I believe in the promise that, in fact, this particular investment is going to pan out? I think you hit the nail right on the head there is like, that’s the job of the individual business to be able to ensure, assure their investors that in fact, there is significant dollars coming or investment coming on behalf of the DOD, that there is significant interest in their particular technology, and that the contracts and the scope of work and growth of business ultimately will be achieved. 

18:43 – 19:55 

(BB): Yeah. I want to really pound something here that you guys have been talking about. But it was a note I took a few moments ago. This is really all about risk. It’s all about risk and reward. And who is going to take the risk, and where the reward is to be found. 

And that’s part of what we’ve seen with the evolution of organizations like SpaceWERX and AFWERX and it’s a matter of managing that risk in a way that isn’t sort of the negotiation you get at, you know, a used car lot. Someone wins, someone loses, but there’s a way to negotiate that risk ownership such that all parties win.  

And that’s a successful negotiation, where everyone’s aims are advanced. And I think that’s been the beauty of the forward-leaning organizations and contracting strategies that have allowed for transfer of and acceptance of risk, but being able to move the reward meter, if you will, accordingly. It’s when that risk and reward are out of balance, that we find friction that will ultimately create gaps and will drive innovation away or will separate between the commercial marketplace and the DOD needs.  

19:56 – 20:20 

On a previous episode of this podcast – we discussed what at times can be a hot-and-cold relationship between the space industry and the investment community. 

But the investments through STRATFI and TACFI seem targeted in how these programs are intentionally designed. So how do these programs encourage private capital to embrace more opportunities in the space sector, while jointly bringing our national security and commercial space capabilities to bear?

20:21 – 21:05 

(RT): Really TACFI and STRATFI are the next steps beyond the initial investment that’s made. A TACFI or STRATFI Award recognizes that there is operational value that it’s been validated by an operational requirement, there’s a mission need and a mission application. 

And so they’re targeted investments that continue. If you will, the other side of the Valley of Death, really getting them to dry land, but there’s recognition and again, it’s an outward presentation of funding that says, ‘We believe in this capability,’ the government is effectively saying, ‘We value your capability from an operational perspective. And we want to make sure that that operational capability is delivered just as quickly as we possibly can.’ 

21:06 – 21:34 

(JS): And I think from the venture world, those acknowledgements, those endorsements, the validations for these smaller start-up initiatives and companies, go a long way to the venture community to say the government and various programs are really stepping up to the plate. So therefore let’s put our dollars in this because this is a worthwhile endeavor. So again, those are a very strong signal to the investment community that this is not just a fly-by-night opportunity.

21:35 – 22:29 

(RT): And so programs like STRATFI and TACFI are tools. But there in the end is, as Jim, so well-stated as well. It’s important that companies, if you will take that next step beyond this TACFI and the STRATFI and move forward into their own growth paths – both within the government as well as outside in the commercial business world and grow their businesses as they would be expected to. 

These are nurturing steps designed by the government within AFWERX and SPACEWERX, to continue to mature the technology and bring about the promise that they inherently have. But it’s not and should not be the only source of revenue.  

It’s really important that businesses embrace their responsibility to grow their capabilities outside of DOD and present those kind of capabilities that are going to be more dual-use and of broader reach across all markets.  

22:30 – 22:52 

(JS): Yeah. You need to diversify your customer base and diversify the risk. 

If you’ve got only one customer, for whatever reason, they move on to a different technology or a different provider – you’re toast. So at least if you do have that additional channel within the commercial market, then you can have many customers and the loss of one is not necessarily going to sink you.

  22:53 – 25:03 

(BB): I concur. And I keep going back to the theme of risk management, in order to get to, Roger, where you described as, you know, having the commercial TAM and then realizing that path and growth, which is good, right? 

Because the more that we can grow small businesses and the more the small businesses are successful – the greater our economic security, which is part of our national security. So, I mean, it all kind of feeds into that broader good.  

But it’s that difficulty with managing the risk upfront that organizations, commands like AFWERX, SpaceWERX can assist the small businesses in meeting. If you can’t manage that risk period upfront on your own and the technology has a Department of Defense purpose, a market there, then an organization like AFWERX or SpaceWERX or NavalX, SOFWERX, etc. can help to fund that risk gap so that the small business can continue to develop it, en route to an intended commercial TAM, that, you know, can take off. 

And now the risk-reward payoff for the Department is the investment early – some which won’t pay out – but that investment early then leads to a commercialization of a capability that, rather than paying bespoke prices per unit, as we would, say, with buying a B-52. The government, the DOD can instead buy a commercial end-use item at a much lower unit cost because the marketplace is really a commercial marketplace. 

Think about how much the DOD would pay for Office 365 if the DOD had developed Office 365. How much would each member of the Department’s license be for that capability? Now, obviously that’s not the case. It’s a commercial product and we buy it like anybody else. Well, that’s the point.  

How to get to that point where it’s a commercial product, take the risk upfront, help the small business manage that risk, help that small business fund that risk. That’s where organizations and commands and incentives, compelling use cases for the XWERX programs begins. Over.

25:04 – 25:25 

STRATFI/TACFI were introduced by Air Force acquisition officials in 2020 and 2021, respectively, so these programs have been around for a few years. 

But this is the first time they’ve been leveraged specifically for space. What does that demonstrate about the emerging demand for space capabilities, both from a defense perspective and from a commercial perspective?

25:26 – 26:52 

(BB): The ubiquity of space. I think that’s what it speaks to. Space is a fundamental engine of our economy, across multiple sectors, and it is a fundamental capability for our national defense. Without the capabilities that pass through, or originate in space, we would not be able to execute the missions of the Department below, on or above the sea that we do today. 

And while that doesn’t mean that we can be sanguine about those capabilities, it certainly indicates that we are completely tied to those capabilities. And therefore we need to defend those capabilities, the same way that we defend our use of, and freedom of navigation on the sea.  

Because, after all, space is the new maritime and just as we explore in the maritime, just as we conduct commerce on the maritime, as we have to defend and occasionally, transition from conflict into combat in the maritime environment. So we have to be ready to do so in space and that is the compelling reason why whatever successes we have in acquisition and operations and maintenance among the services, we need to recreate those capabilities, those missions, those operations, in space. 

26:53 – 28:00 

(RT): Scott, I would only add to Boris’s outstanding comments that just that it’s encouraging to see that the Department of Defense is following through with specific investment in space that they recognize – I think the world recognizes the explosive growth that the space domain has realized. And is seeing – some estimates upwards of $1-$1.5 trillion market opportunity over the next 15 years or so, 10 or 15 years, just explosive growth and tremendous opportunities. 

And the fact that the Department of Defense is laying in this seed corn deliberately and trying to mature technologies and capabilities as much as they can, within the designed and currently known and developed space mission areas of interest for the Department of Defense. It sends a really important message. 

And, SSC, in particular, deserves a lot of praise. And the Department of the Air Force and certainly the United States Space Force, with their efforts to continue to mature this. It’s making a difference and they are bringing important capabilities consistent with their objectives.

28:01 – 28:41 

(JS): It really goes to helping to foster direct communication between the government and industry out there, ensuring that innovation really aligns with the DOD and what the requirements are. 

Look, a coordinated funding strategy really ensures a strong partnership where all sectors share the risks and benefits. You’re all rowing in the same direction. It demonstrates the government’s commitment to this innovation and really sends strong signals to the private sector and the investment community of their confidence, and the need for the resources to invest, to develop cutting edge technologies. 

28:42 – 29:01 

(RT): Yeah, I would just emphasize it really drives home the idea of transparency and trust and that’s what’s so sorely needed here. Where there’s risk and uncertainty, these kinds of investments and these kinds of actions help dispel those notions and mitigate risk and really, build trust and transparency across the enterprise. 

29:02 – 29:22 

So all things considered – how should new and emerging commercial space companies, particularly those seeking DOD contracts – view funding opportunities like STRATFI and TACFI? 

And to take that one step further, how can Elara Nova – with its team of military, industry and financial experts – support all of these stakeholders looking to overcome Valley the Death challenges?

29:23 – 30:00 

(JS): This is what Elara Nova does day in and day out. They really should see these programs as vital opportunities to gain the financial support, enlist partners on the strategic guidance, and really to carve its pathway to a successful deployment within the DOD. 

These programs can really enhance their credibility. And as we’ve said throughout, provide the necessary resources to scale, and facilitate entry into discrete markets, in line with what their mission objectives are. This is why a firm like Elara Nova is so well-positioned to guide these companies through the maze. 

30:02 – 31:17 

(RT): Well, Scott, I think that, first and foremost, Elara Nova serves a critical role as an interlocutor and that by that I mean that we help bridge the conversations across industry, across the government, across investment circles that allow us to better enable and position national security space and space at-large, for success.  

And it’s a critical role in that, as Jim just previously alluded to, we have a number of consultants and advisors within our team who have served at very senior levels across industry and across government and in the financial community who understand these challenges first-hand because they’ve lived them and they understand what it’s like to take small businesses and try to grow them personally and try to secure government contracts and try to contribute to broader space capabilities and architectures at-large.  

And so I think Elara Nova is uniquely positioned as really the only space consultancy in the world who has this kind of background, who has these kinds of experiences and can certainly advise and help better enable the future of the space economy and businesses to succeed.

31:18 – 31:55  

This has been an episode of The Elara Edge: Expert Insights on Space Security. As a global consultancy and professional services firm focused on helping businesses and government agencies maximize the strategic advantages of the space domain, Elara Nova is your source for expertise and guidance in space security. 

If you liked what you heard today, please subscribe to our channel and leave us a rating. Music for this podcast was created by Patrick Watkins of PW Audio. This episode was edited and produced by Regia Multimedia Services. I’m your host, Scott King, and join us next time at the Elara Edge.

STRATFI and TACFI Programs Catalyze Funding to Overcome Valley of Death

SpaceWERX Aims to Find, Fund and Field Space Capabilities for the Warfighter 

SpaceWERX, the space innovation arm of AFWERX, recently announced the nine recipients of its first funding opportunity specifically tailored to bring space capabilities across the ‘Valley of Death,’ or the difficult transition of scaling a high-potential capability into a formal program of record. The Strategic Funding Increase (STRATFI) and Tactical Funding Increase (TACFI) Programs, first introduced by Air Force acquisition officials in 2020 and 2021, respectively, are funded by AFWERX and designed to accelerate funding for start-ups and small businesses receiving Small Business Innovation Research (SBIR) grants. Through the STRATFI/TACFI Programs, eligible businesses may have their SBIR grants matched with additional funds from the Department of Defense (DOD) and private capital partners. Now, AFWERX is leveraging the STRATFI/TACFI Program through its SpaceWERX division to facilitate acquisition of space capabilities for the warfighter. 

“The Valley of Death in the context of start-up businesses refers to a critical early phase where a company has started operations but hasn’t yet generated sufficient revenue to cover its expenses. You’re operating on borrowed time. The challenges experienced during this phase can be exacerbated for companies who have pinned the core of their business model around government contracts,” said Major General (Ret) Roger Teague, Founding Partner at Elara Nova: The Space Consultancy. “Start-ups operate in business cycles of months while DOD budgets operate to a five-year plan. The Air Force and Space Force are using these acquisition tools to help, with many small company SBIR awards to advance research and development. Initiatives like STRATFI and TACFI are great, but they will only get you so far. The hard part is getting all the way across that Valley of Death to realize a revenue-generating business that produces consistent returns, enabling further future funding, investment and overall business growth.” 

The Valley of Death: A Three Phase Process 

The Small Business Administration’s SBIRs Program categorizes the Valley of Death through three phases: Concept Development (Phase I), Prototype Development (Phase II) and Commercialization (Phase III). The STRATFI/TACFI Programs, meanwhile, are designed to provide an influx of funding at the most vulnerable point in the process.  

“In Phase I, a business may have funds from the Small Business Administration to initialize research and develop a capability through engineering and design,” said Rear Admiral (Ret) Boris Becker, partner at Elara Nova. “Then in Phase II, they may acquire materials to contract and build mock-ups that advance the technology’s readiness level. But there’s a struggle to close that gap between Phase II and Phase III to bring that technology to commercial viability.” 

A primary challenge for many of these start-ups and small businesses, especially those developing capabilities with national security implications, is that the government’s lengthy budget cycles and extensive oversight can prove costly and burdensome to a start-up with minimal revenue and finite financial backing from its original funding sources.  

“Even when the government is funding the technology’s Phase II development, the small business may be struggling to pay the bills as they wait for a determination on an award or contract bid,” Adm Becker said. “The government can generate cash flow as a customer, but that alone may not be enough to keep the business operating. So the aim of STRATFI/TACFI is to provide these start-ups with matching funds to scale a great idea into a fieldable design and ultimately, a viable capability.”   

Matching Funds to Catalyze Growth 

STRATFI award recipients receive matching funds at a ratio of 1:2. For every SBIR dollar the business receives for developing a defense-specific capability, the DOD will match with two dollars. However, if the business is developing a ‘dual-use’ capability, or one that can be leveraged for both defense and commercial applications, every SBIR dollar can be matched at a 1:1:2 ratio from DOD and private capital partners, respectively.  

Meanwhile, TACFI offers a 1:1 match for every SBIR dollar from the DOD for defense-specific capabilities, and 1:1 matching dollars from private capital partners for capabilities with dual-use applications.  

“A STRATFI or TACFI award recognizes that there is operational value and a mission application according to DOD requirements, so they’re targeted investments,” Gen Teague said. “The awards demonstrate the DOD’s belief in these capabilities and sends a strong signal to the investment community that their investment is expected to have a strong outcome within a particular DOD program of record, which will ensure customer demand and revenue growth over time.” 

Incentives for Developing a Commercial Space Market 

Additional matches from private capital partners remain a point of emphasis for these funding programs to prioritize capabilities with dual-use applications.  

“Dual-use application in space is sorely needed, because businesses that never realize their growth objectives never really mature as companies,” Gen Teague said. “Some estimates project upwards of a $1.5 trillion market opportunity in space over the next 10 or 15 years. It’s important that businesses embrace their responsibility to grow their capabilities outside of DOD and present those capabilities that are going to be more dual-use and of broader reach across commercial markets.”  

As such, STRATFI/TACFI funding can provide a direct path to viability for small businesses seeking an entryway into the emerging space economy, as well. 

“The STRATFI/TACFI Programs send an important message to industry and private capital partners,” Gen Teague said. “The Department of Defense is following through with specific investments that they recognize will help mature technologies and capabilities within space mission areas of interest for the Department of Defense. But it’s often wise for companies to move forward with growth paths that feature dual-use applications and services, both within the government as well as in the commercial marketplace to grow their businesses.”  

Incentives for Private Capital Partners 

The STRATFI/TACFI awards are catching the attention of other private capital and venture capital firms, which have traditionally shown to have somewhat of a hot-and-cold relationship with the space sector. 

“Only around 5 to 10 percent of VC firms focus specifically on the space sector, and those that do are primarily driven by the advancements and investment opportunities in these STRATFI/TACFI programs,” said Jim Sullivan, partner at Elara Nova. “Those acknowledgements, endorsements and validations from the DOD are vital for these smaller start-up companies, so that the venture community can see their value as an investment, as well.” 

A primary challenge faced by not only these start-ups and small businesses, but also the DOD and its industry and private capital partners, is the inherent risk that comes with developing innovative technologies and capabilities. 

“One of the most difficult problems that the government faces is applying a risk-based approach to funding a small business,” Adm Becker said. “The Valley of Death issue is all about who is going to take the risk and how the reward is to be found. So organizations like AFWERX and SpaceWERX are about managing that risk in a better way. One of the advantages to the SBIR process is that the small business has been through Phase I and Phase II development, and so their STRATFI/TACFI strategy allows for the transfer of risk, as well as reward.”  

A Collaborative Solution to the Valley of Death 

The intentional design of the STRATFI/TACFI programs not only increase the likelihood of a start-up or small business scaling from development to commercialization, but also opens communication channels across the national security apparatus to find, fund and field capabilities effectively.  

“STRATFI/TACFI is a coordinated funding strategy that ensures a strong partnership, where all sectors share the risks and benefits,” Sullivan said. “Initiatives like these foster direct communication between the government, industry and private capital, by ensuring that innovation aligns with DOD requirements. It clarifies DOD needs so industry can more effectively develop solutions that enhance mission outcomes. Meanwhile, it demonstrates the government’s commitment to innovation and signals confidence to the investment community that there is a need for financial resources to invest in developing cutting-edge technologies.” 

Unveiling its first space-specific STRATFI/TACFI funding opportunity comes at a critical point in time for the space enterprise, especially as the latest warfighting domain plays an increasingly prominent role in facilitating operational success across military domains. 

“Space is a fundamental capability for our national defense,” Adm Becker said. “Without space capabilities, we cannot execute the missions of the Department below, on or over the sea that we do today. Therefore, we need to defend our space capabilities the same way that we defend our use of, and freedom of navigation on the sea. That is the compelling reason why whatever success we have in acquisition, operations and maintenance among the military services, we need to re-create for space.” 

Emerging Tools and Resources for the Valley of Death 

In recognition of this growing imperative for space capabilities, AFWERX is leveraging its funding tools to develop space capabilities, so new and emerging commercial space companies can take advantage of its STRATFI/TACFI Programs. 

Further, Elara Nova’s roster of former military, industry and financial experts can support start-ups and small businesses apply these funding tools to overcome Valley of Death challenges.  

“Space startups and small businesses should see these programs as vital opportunities to gain the financial support and enlist partners on strategic guidance to carve its pathway to a successful deployment within the DOD,” Sullivan said. “STRATFI/TACFI can enhance credibility throughout the development process, provide the necessary resources to scale, and facilitate entry into discrete markets that are in line with DOD mission objectives. Elara Nova is well-positioned to guide these companies through the ‘Valley of Death, by offering governments and the commercial marketplace opportunities to grow space capabilities through funding programs like this.”  

For Gen Teague, what makes Elara Nova so well-suited for these efforts is that many Elara Nova partners have personally and professionally confronted the complex challenges brought by the Valley of Death. 

“Elara Nova bridges the conversations across industry, government and investment circles to better enable and position the national security space enterprise for success,” Gen Teague said. “We have a number of consultants and advisors within our team who have served at very senior levels across the industry, government and the financial community and understand these challenges first-hand. They understand what it takes for a small business to grow and secure government contracts that contribute to broader space capabilities and architectures at-large.” 

Elara Nova is a global consultancy and professional services firm focused on helping businesses and government agencies maximize the strategic advantages of the space domain. Learn more at https://elaranova.com/. 

Episode 3: The Space Force's CASR Framework: Bridging Military Requirements and Commercial Capability

The Elara Edge: Expert Insights on Space Security

00:00 – 01:23
Earlier this year, Col. Richard Kniseley of the United States Space Systems Command initiated a program for commercial space companies to be called upon by the United States Space Force in times of crisis. This program, dubbed the Commercial Augmentation Space Reserve – or CASR for short – is akin to the United States Air Force’s Civil Reserve Air Fleet program where commercial airlines pledge to provide airlift support to the Department of Defense during an emergency. 

Recently approved by Air Force Secretary Frank Kendall, the CASR program is expected to secure funding by Fiscal Year 2026 and reflects the growing interconnectedness of military requirements and commercial capability in the national security space mission. Welcome to The Elara Edge: Expert Insights on Space Security. I’m your host – Scott King – and to better understand the purpose of CASR, I am joined by Major General Roger Teague, who retired in 2017 as Director of Space Programs in the United States Air Force. 

Before becoming a founding partner of Elara Nova, General Teague served as the vice president of Space Intelligence and Missile Defense at the Boeing Company, as well as the President and Chief Executive Officer of the PredaSAR Corporation.

General Teague – thank you for joining me today. So just as we get started – can you share a little bit about what Space Systems Command is trying to do with this CASR program?

01:23 – 02:57
Hi, Scott. It’s great to be with you. First, let me thank you personally for taking the time to talk and help inform our clients about the importance of this topic. The Commercial Space Office of the U.S. Space Force’s Space Systems Command has brought forward CASR, the Commercial Augmentation Space Reserve Initiative, as part of a broader framework to seek commercial capabilities that would augment, enhance and supplement existing capabilities, and most importantly, to add resilience to national security space, constellations and networks.

The initiative kicked off earlier this year, back in February of 2023, when Space Systems Command held a reverse industry day to roll out the CASR concept. And more broadly, CASR is based on the historical Civil Reserve Air Fleet or CRAF construct utilized for decades by the United States Air Force, where during times of crisis, conflict or urgent need, the government could call upon commercial airline partners to carry out appropriate transport or resupply or logistical support missions.

The Space Force is now actively investigating the viability of implementing a similar model for space capabilities under the CASR construct. The government team has developed a draft program and framework for CASR, which includes three levels of support and nine framework elements. 

Now the framework is designed to ensure that the Space Force can leverage the capabilities of the commercial space industry to again enhance the resilience, capacity and effectiveness of the national security space architecture.

02:58 – 03:09
I’d like to build on that idea of the CASR framework being designed off of the U.S. Air Force’s Civil Reserve Air Fleet model. In what ways is the space mission area just inherently different for a program like this?

03:10 – 04:37
Yeah, Scott, it’s a great question and it’s not always well-known that the Civil Reserve Air Fleet model has served our nation very well for many years now. Ensuring, for example, that deployed forces had the required logistical support elements in place and / or that there was support for, in and cross theater troop movements or relief supplies that were provided in response to humanitarian crises.

The CASR model is much different, though, and is significantly more comprehensive. Under CASR, Space Systems Command seeks to provide commercially augmented capabilities across every space mission area. Missions like missile warning, intelligence surveillance and reconnaissance, communications, navigation, launch all of them are going to be evaluated for enhancement under CASR. Space Systems Command seeks not only to validate what commercial capabilities exist today, but also what capabilities might be available in the very near future.

The next step is going to be to understand how those commercial capabilities could be integrated into our broader U.S. government mission architecture. CASR’s success will require significant analysis to not only evaluate the near-term capability, but also define desired end-states and outcomes, including answering important questions like: How much warfighting reserve capability do I need? When do I need it? How do I contract for it? And ultimately, how much is it going to cost? 

04:38 – 04:52
Now, space is an inherently dangerous and complex warfighting domain – so can you elaborate on what ways the Space Force has already been leveraging commercial space capabilities and how does CASR help them expand commercial space relevance to other mission areas?

04:53 – 07:27
Yeah, it’s a great question and it’s really an important one, Scott. And I think it’s one that SSC Commander General Mike Guetlein and Colonel Rich Kniseley, who’s director of the Commercial Space Office, and frankly, the broader SSC team are sorting through right now. 

For example, the Department of Defense has successfully utilized a partnership with the commercial industry purchasing satellite communication capabilities across multiple vendors for several years now. During this time, the Department has learned a lot about how to best acquire commercial services. What works – what doesn’t. All of those lessons can be successfully applied now, under CASR. 

The Space Force is going to have to evaluate all capabilities of interest on a case-by-case basis, really to fully appreciate each of them on their own merit and then understand how they can be brought to the fight. They’re going to need to answer questions like: How do I integrate them into existing architectures? How do I present those capabilities to war fighting forces? And do I need to modify my current operations? And if so, what are those changes look like?

I’ll give you one other example. Like for the ISR mission, the intelligence, surveillance and reconnaissance. There are several commercial providers today that can bring real additional capability to bear that would augment and supplement existing U.S. national capabilities to support combatant commanders who don’t always have tasking priority or the ability to have their requirements satisfied in a timely manner.

Commercial capabilities could cover down on some of those requirements, and while not always satisfying the full requirement set, they could offer support to 80% or more, which would be more than a significant addition. The idea is to provide persistent coverage and awareness more frequently over a broader area – that ultimately helps augment, supplement and complement national capabilities. 

Commercial launch is another great example. Look how the launch market has changed over the last decade or so as SpaceX has brought its capabilities into the national security space launch market. They’re now executing and delivering critical missions in direct support of national security space today. 

Finally, I would note that the CASR Initiative is complementary to the commercial space strategy now being developed at headquarters U.S. Space Force under the direction of General Saltzman. This strategy paves new ground and sets a vision. It’s an approach and strategy for national security space to be able to leverage and take advantage fully of the commercial space capabilities at large.

07:28 – 07:35
And so what are the advantages for commercial space companies? Are there any benefits in this opportunity for them to join something like the CASR framework?

07:36 – 09:32
Yeah, I think there are several advantages, Scott, for commercial space and commercial capabilities to participate in the CASR model. And I think this is the heart of what SSC is trying to get to. And one of them first is the real ability to be able to contribute to national security space. I think there are a number of companies ready to contribute that may not have had the ability to compete for or be selected as part of a service program of record. 

But nonetheless, they have an important and viable capability that could contribute to our nation’s overall defense posture. And we need to be able to find and understand what those companies are and what their capabilities are. Additional benefits include being a trusted business partner of the United States. Another foundational element I think that should not be understated.

But even more important, I think it’s just the ability for commercial business to be included as part of the broader discussion to understand and have a broader conversation about how we collectively get after some of these pacing threats that are facing the nation. It’s going to take our collective talent, wisdom and energy. Truly, a team effort is going to be required to address the very real challenges that our nation faces.

I also think it’s important to note that it’s not necessarily one company or one service. The defense of our nation has always been built around the success of the joint team and the joint fight and commercial capabilities are going to be an important part of the solution to address those threats.

Space enables every aspect of modern warfare and it’s essential that our warfighters, our partners and friends have a shared understanding of the challenges that we face and be able to contribute wherever possible. 

In the end, this is about giving our U.S. combatant commanders – those four stars responsible for protecting the U.S. and our Allies around the world – the decision advantage they need to conduct their operations with speed and lethality.

09:33 – 09:43
And sir, what is the Space Force looking to leverage from the commercial space industry? Why is it important to involve them and engage with commercial and industry partners this early in the CASS-ER development process?

09:44 – 11:42

Yeah, it’s a great question, Scott. It may be one more appropriate for General Guetlein. In my opinion, I believe that SSC first wants to gain a better understanding of all the commercial capabilities that could currently support each of the space missions.

I believe that this is going to be an eye-opening exercise in a lot of ways. The great news is that as we identify capabilities, these capabilities are going to grow and evolve – over time. And this creates a healthy conversation and dialogue when introducing new ideas regarding the best way to accomplish mission objectives.

In addition to system acquisition knowledge, it helps inform the requirements, planning and programming process, which gives the Space Force the ability to help steer growth as well as desired outcomes through specific targeted investment in specific space mission areas. 

Second, this gives the Space Force the ability to move at commercial pace to deliver at scale and replenish constellations rapidly and that cannot be understated. These timelines are much faster than typical programs of record development schedules, and combatant commanders need their requirements satisfied in a timely manner. 

A typical space program of record historically takes 7 to 10 years to field capability, and CASR gives the Space Force the ability to move at commercial speed and scale and provides the ability to replenish and refresh constellations rapidly, for example, on 3 to 5 year timelines.

All of this enables more and better data in support of decision-making. And again, this is all about getting the U.S. combatant commanders the ability to gain and maintain decision advantage. Commercial augmentation is going to greatly contribute to that objective, and it’s a major building block for tactically responsive space capabilities. We must get after the pacing threat and commercial is to help deliver and replenish capability at comparatively blistering pace and bring new technology to the fight much faster.

11:43 – 11:49
Why now? Are there any real-time examples of how leveraging commercial space capabilities can be applied to the space-based mission?

11:50 – 12:50
Yeah, you could probably make the case that, for example, the Ukrainian crisis is the first conflict that commercial space has made a difference in a conflict. The world is starting to see commercial space in action and the counter strategies of opposing forces to deny, degrade, disrupt or even destroy their services and effects.

I believe that we’re very soon going to start seeing even more commercial capabilities operating alongside their government, purpose-built counterparts in blended or hybrid constellations across – again nearly every space mission area. It’s also not surprising that commercial capabilities are now being targeted by adversaries. Their message is clear that if you’re contributing to a kill chain, your mission is at risk.

Commercial providers are going to need to understand and accept this risk to each of their business plans. But again, I would also re-emphasize the point that at the strategic level, it’s not about the platform. It’s only about whether commanders can make decisions and direct actions at the speed of need. 

12:51 – 13:09
Thank you, sir. And one last question here: As a founding partner of Elara Nova – how does Elara Nova’s team of consultants find themselves uniquely positioned to support the United States Space Force and Space Systems Command in essentially merging military space requirements with commercial space capabilities in something as distinct as the CASR construct?

13:10 – 14:25
Well, as we close, Scott, let me again thank you for taking the time to talk about this important topic. Your question gets to the very heart of why we – and many of our clients – believe that Elara Nova can make a difference. Elara Nova is purpose-built. No other consultancy has the breadth and depth across space like we do, and no one can speak and work across government and industry like we can.

Our team has decades of both government and private sector experience in space strategy, operations, acquisition, engineering, technology and policy. Our diverse and extensive team brings vital insights and powerful national and international connections across the defense, intelligence, civil and commercial space sectors to enable our clients’ success. 

This is a unique time in history, and Elara Nova is well-positioned to serve as an interactive leader supporting the CASR initiative and help shape and refine the conversation to bring commercial space capabilities to the United States Space Force. Help commercial companies understand how to do business for the United States Space Force, and ultimately help field the critical capabilities that the United States Space Force requires.

14:26 – 15:10
If you’re interested in learning more about the CASR framework, and the growing interconnectedness of military requirements and commercial capability in the space domain – visit our Insights page at www.elaranova.com.  

This has been an episode of The Elara Edge: Expert Insights on Space Security. As a global consultancy and professional services firm focused on helping businesses and government agencies maximize the strategic advantages of the space domain, Elara Nova is your source for expertise and guidance in space security.

If you liked what you heard today, please subscribe to our channel and leave us a rating. This episode was edited and produced by Regia Multimedia Services. I’m your host, Scott King, and join us next time at The Elara Edge.

Episode 13: Elara Nova Authors Discuss Satellite Control Network White Paper

The Elara Edge: Expert Insights on Space Security

Host: Scott King 

Subject Matter Experts: Maj Gen (Ret) Roger Teague, founding partner at Elara Nova (RT); Col (Ret) Mark Hughes, partner at Elara Nova (MH)

00:02 – 01:52 

Elara Nova’s inaugural White Paper, “Time for a New Approach with the Satellite Control Network,” set an industry-leading precedent with its call-to-action to modernize the long-neglected, but particularly critical Satellite Control Network or SCN. Considered the ‘backbone’ of space operations, the SCN is the network of ground system antennas that enable communications between operators on Earth and the Department of Defense satellites on-orbit, to ensure command and control capability. 

But the SCN facilitates connections for more than just DOD satellites, it also supports civil and intelligence agencies, as well. This means that an increasingly populated space environment, coupled with chronic under-funding and advancing satellite technology, is overextending the SCN’s capacity to support our national security space needs. 

Now, Elara Nova is using its platform to advocate for modernizing the SCN with new, innovative solutions, and operating concepts, to ensure this critical network of ground system antennas can meet the needs of the warfighter.  

Welcome to “The Elara Edge: Expert Insights on Space Security.” I’m your host Scott King and joining us today are the two co-authors of the White Paper: Retired Major General Roger Teague, founding partner at Elara Nova; and Retired Colonel Mark Hughes, partner at Elara Nova. 

General Teague served for over 31 years in the United States Air Force, and held the role of Director, Space Programs from the Office of the Assistant Secretary for Acquisition in Washington, D.C.  

Colonel Hughes retired after a 24-year career with the United States Air Force, including the role of Principal Personal Advisor to the Under Secretary of the Air Force. 

General Teague, I’d like to start with you. Can you share a little bit about the purpose of the White Paper and how the idea for it came about? 

01:53 – 03:20 

(RT): You bet. Scott. Let me first say that I think it’s very important, as our fellow founders have talked about many times, we believe that Elara Nova is multi-faceted, and it’s important that we be thought leaders in this space. We have such an incredible, talented team that has such a diverse space background and that it’s important that in fact, we have a responsibility to be able to get the word out on various topics and subjects and matters of significant importance across the space enterprise. 

And that was really the primary motivator for the article on the SCN. Obviously, there are a number of different space mission areas that require urgent, repair and or modernization and we just felt that, as we talked to various clients and we talked to various senior leaders and we considered all the options.  

It was important to highlight what, frankly, is the backbone of all satellite control, across both the Air Force, the Space Force, the intelligence community and NASA. It is, in fact, a piece of nationally critical infrastructure, across the United States and it supports so many different aspects of our nation’s ability to conduct satellite operations successfully.  

And so we felt like it was important to highlight this issue. There are many, many more topics that we intend to talk about and write about. But this one, came to the forefront, as we were considering those elements that were absolutely critical to our future success.

03:21 – 03:35 

And so Colonel Hughes, what makes the fact that all these agencies rely on the SCN, a liability for it to be targeted by U.S. adversaries? And how can the Space Force ensure that the SCN remains reliable and secure for all of these agencies? 

03:36 – 05:14 

(MH):The SCN unto itself is not the only node or way to communicate, but it certainly is the primary node. And when you look at warfighters, they absolutely have to have the ability to command and control the forces in the field at the right place, at the right time, to get the effects that they need. 

And if they don’t have that ability, then you’re not going to be able to get the warfighting effects that are necessary across the whole spectrum of warfare. 

And so the agencies, the other agencies to include the intelligence agencies, serve in that mission and the civil agencies require it to perform. We all require getting assets at the right place to do their job, and it is a liability on a single network. So our adversaries would look to take out the primary node, if only to cause confusion on our side and inability to act quickly and effectively. 

In that case, we need to like we’re disaggregating all our sensing systems and our satellite systems and decentralizing, disaggregating the architecture. We need to do the same thing with our paths of communications to command and control those assets. And in that case, it means to put in multiple nodes, multiple points in order to get the message through. It is a liability if we can’t do that because the system has to be reliable and has to be secure to a level it needs to be to accomplish the mission.  

05:15 – 05:31 

The White Paper also describes that newer satellites are requiring twice the number of contacts with ground systems to execute command and control functions.  

So Colonel Hughes, can you explain why this is the case? And what makes the Satellite Control Network limited in its ability to support these changes in satellite technology?  

05:32 – 06:57 

(MH): It’s a great point because we have more satellites coming on-orbit than we’ve had before and that’s part of the disaggregation, decentralization for all these missions. The mission has become more complex to be able to respond faster with more technological input as well.  

And therefore, you have to be more responsive in a dynamic environment. It’s not just one pass over the Earth. I’m inside of the SCN antenna. I want to make a correction, check a status.  

And but now you have many, many more satellites out there trying to get many, many more contacts during that pass and it becomes a scheduling problem to do that. And the system itself is not designed to handle multipath situations. Now certain systems will have their own backup to take their own commands, but the SCN also has to be there to support it. 

It’s the new changes in technology driven by the mission concept that we have. That’s getting to the point, getting to an oversubscription or over-capability where the user has to prioritize these against multiple missions.

06:58 – 07:29 

Thank you, Sir, and so a de-centralized approach, with multiple antennas and a variety of connection points, can create greater resiliency in our network of ground systems antennas to communicate with satellites in space. 

But the White Paper also points to a more threatening space environment, coupled with chronic underfunding and advancing satellite technology, that altogether are exposing the fragility of the current Satellite Control Network that’s in place today.  
 

General Teague, can you elaborate on these dynamics and how together they create this vulnerability for the United States?

07:30 – 09:46 

(RT): Yeah, Scott, I think Mark really highlighted some key points there, but I mean, this issue isn’t new. Unfortunate as it may be, it is a soft. It’s a soft target. The location of the antenna sites globally are well known. The SCN has been under cyber attack for many years now. It takes a lot of effort and a lot of diligence to make sure that our networks remain clean and that the missions are able to execute successfully.  

But that said, those sites in and of themselves, they’re pretty well isolated and they’re pretty well known and a kinetic strike would do incredible damage. And so it’s important that as we think about what the future looks like, that there are resilient options available so that we be able to continue the mission, and not necessarily have to be dependent upon the current infrastructure associated with the Satellite Control Network as it exists today.  

Senior leaders within both the Air Force and the Space Force have been talking about this issue for a long time. And it is the stated doctrine of both Chinese and Russian leadership to be able to expose those vulnerabilities and cripple the United States, where it’s vulnerable, and space is certainly in their crosshairs.  

There are multiple examples throughout the past several years, where they’re demonstrating, if not firing, and letting their intentions be known very publicly that they have U.S. space capabilities in their crosshairs.  

And that should be a wakeup call to all Americans because indeed, our very way of life is, in fact, being threatened: our ability to live our lives throughout our daily activities, name your favorite one. Even just simply driving to the grocery store with your GPS-guided cell phone and or execute a banking transaction or simply fill up your car with gas. All of those functions that Americans and people around the world take for granted are at risk. 

And the fact that the SCN – it has not received the budget support, and we have not taken the time to recapitalize and truly, redevelop and or, find new ways of doing that business that would provide resiliency in its architecture across the network, creates in and of itself, a vulnerability that we must address as soon as possible.

09:47 – 10:18 

Thank you, Sir. And so the White Paper ties the Satellite Control Network’s role to the Space Force’s Line of Effort number one: to field combat-ready forces. 

This Line of Effort has been a key message for General Chance B. Saltzman, the Chief of Space Operations for the United States Space Force, who is aiming to align the efforts of system acquirers, operators, and sustainers under new, “Integrated Mission Deltas.” 

So General Teague, why is it important to associate the Satellite Control Network within the context of “combat readiness?” 

10:19 – 11:32 

(RT): Yeah, sure. Scott, again, I think this gets back to the core, the objectives that General Saltzman is trying to achieve. 

He realizes that his resources are limited and that we can’t continue to do business as we always have: for basically, a requirement is developed. And then you throw it over the fence for the acquirers to go acquire it, and then they throw it back to the operators and then the sustainers, and it’s a long-cycle that is not always efficient. 

And I think his objective of forming Integrated Mission Deltas gets to the core of that is that I bring those communities under one roof and I let them sort things out dynamically in real time and much faster pace in fielding and operating capability very, very quickly. 

I think what’s important and one of the recommendations that we make in this, White Paper, though, as well, is to bring both the intelligence community as well as NASA, the National Aeronautics and Space Administration, because they are such heavy users of the Satellite Control Network as well. There are a number of important voices that need to be brought to the table. 

As I said, this is a piece of nationally critical infrastructure, and all voices need to be heard with regard to what its future, system operation and capabilities are going to look like.

11:33 – 11:37 

And how can this approach ensure a seamless delivery in the Space Force’s ground network capability? 

11:38 – 12:49 

(RT): Well, any at all. Scott, any and all space mission systems are critical to be able to field and operate, maintain and sustain, credible space forces. As I mentioned earlier, the Satellite Control Network serves as the background for all satellite operations.  

And so as we consider General Saltzman’s edict, this was an easy application. But it’s more than just technology hardware in boxes and deployed ground stations, right? 

I mean, it’s actually to include the people who operate, acquire and sustain this as part of his intent, to ultimately transition to Integrated Mission Deltas. And I think it’s important that as this is the foundation of where he is going with the Integrated Mission Deltas. Is that on a mission area-by-mission area basis that we look through a different lens, through operations, acquisition and sustainment and that we think about our systems and the way we acquire and operate and sustain them differently than we ever have in the past.  

And I think that gets to the core of what General Saltzman is trying to achieve. We are resource constrained. The Space Force is resource constrained. And so it’s important to think and act differently and field the most credible forces possible. 

12:50 – 13:03 

Thank you, Sir. And so the White Paper calls for ten or more major contractors to support the management of modernizing the SCN.  

Colonel Hughes, why ten or more? How should commercial space companies view this call to action?  

13:04 – 14:53 

(MH): You have to go back to the history of one: how we manage the system over decades. 

And General Teague referred to this as we were split in the acquisition and the operations community. And that all also came to how they were funded and how they were supported throughout their lifecycle to do that. Operators would want a near-term fix, acquirers would want to advance capability. Over 60 years, there have been many, many upgrades and even some of the legacy systems still exist.  

You now have individual contracts being let by individual acquisitions or operations commands that have been legacy throughout the system, that aren’t integrated in their delivery of capability. I did it for my entity, and as Roger said, I’ll throw it over the wall and that’s what’s occurred.  

In order to match what General Saltzman wants. And that is we should all be together working for that same capability and on the same team, using the bucket of money that we have to deliver capability in the best way that we can. And we also have to make sure that we, be conscious about the legacy capabilities that the system has – so we don’t sunset them too early.  

Why ten or more? It’s because companies get into this system and get to support them, and then they become the core, knowing of all the things they have to do on these systems. We are talking about multiple hardware configurations, software configurations and because they have to be integrated, multiple interfaces and configuration controls. You can’t just make a simple change without evaluating it.

14:54 – 15:19 

Thank you, Sir, and the White Paper uses the National System of Interstate and Defense Highways Act of 1956, signed into law by the Eisenhower administration, as an example of how a strong infrastructure can also enable military capability.  

Colonel Hughes, can you expand upon this parallel and how we can apply lessons learned from the Interstate and Highways Act, to also upgrade our ground-based infrastructure for space in a similar way? 

15:20 – 16:24 

(MH): The infrastructure that we have in our highway system was born of military necessity, recognized by President Eisenhower when he was a General and saw how efficiently the German forces were able to move capability. And as he came back into the presidential role, he saw that everyone was building their own, non-connected, non-standard, integrated road system that wasn’t getting to what it needed to be and money was being inefficiently spent. 

In order to get this raised to the right level. He determined – it is better to raise this up to a federal level, because this infrastructure is so critical to us. And as it turned out, not only was this critical for the military aspect of being able to move equipment, logistics across the country rapidly, but it also fueled our economic engine.  

That’s the lesson that we can inform the Space Force is to look at this as a national infrastructure problem.

16:25 – 16:51 

Thank you, Sir, and at the top of the discussion, we mentioned that the Satellite Control Network was just the first White Paper published by Elara Nova. But the ground network supporting our space infrastructure is just one issue in the broader national security space discussion.  

So my question to each of you is: what happens next? What lessons can we learn from this process with the Satellite Control Network, and how can we apply it to other relevant programs that need attention?

16:52 – 18:02 

(RT): Scott. Certainly, I think the Department of Defense and the U.S. Space Force have a number of different systems that have similar stories to the Satellite Control Network. They’re aging, they’re outdated. They need next generation capability. But I will tell you Elara Nova needs to be thought leaders and needs to be advocates on behalf of the entire space domain.  

I think it’s important that we talk about budgets. I think it’s important that we talk about cyber threats, and the kinds of threats that everyday Americans might be facing, but yet completely unaware of. I think it’s important that we talk about the kinds of capabilities that are provided through space that are often taken for granted simply just because they’re orbiting 23,000 miles above our heads. 

So as we look at this through our leadership lens, we are going to be engaging on a number of different topics in the days and months ahead, to be able to address them from an independent perspective.  

Again, these are decisions that are being made with regard to where our tax dollars are being spent and the kind of capabilities that we pursue and the kind of capabilities we choose to integrate. All of those decisions have consequences and it’s important that we get it right.

18:03 – 18:25 

(MH): The fact that we’ve entered this goal of being thought leaders has stimulated a lot of thinking as to where we can take it. And there will be many many opportunities to talk about missions, to talk about budgets, to talk about infrastructure, even management and operational approaches. That’s why it’s great to have Elara Nova.

18:26 – 19:04 

This has been an episode of The Elara Edge: Expert Insights on Space Security. As a global consultancy and professional services firm focused on helping businesses and government agencies maximize the strategic advantages of the space domain, Elara Nova is your source for expertise and guidance in space security. 

If you liked what you heard today, please subscribe to our channel and leave us a rating. Music for this podcast was created by Patrick Watkins of PW Audio. This episode was edited and produced by Regia Multimedia Services. I’m your host, Scott King, and join us next time at the Elara Edge.

White Paper Ushers in New Era of Thought Leadership for Space Community 

Elara Nova’s Call-to-Action to Modernize the Satellite Control Network Sets Precedent for Industry-Leading Advocacy

Considered the ‘backbone’ of space operations, the Satellite Control Network (SCN) is the network of ground system antennas that enable command and control communications between operators on Earth and the Department of Defense (DOD) satellites on-orbit. But an increasingly populated space environment, coupled with chronic under-funding and advancing satellite technology, is overextending the SCN’s capacity to support national security space needs. Now, Elara Nova is leveraging its platform to advocate for modernizing the SCN, setting an industry-leading precedent for thought leadership with its inaugural White Paper, “Time for a New Approach with the Satellite Control Network.” 

“The Satellite Control Network is a nationally critical infrastructure because it supports so many different aspects of our nation’s ability to successfully conduct satellite operations: across the Air Force, the Space Force, the intelligence community, and even NASA,” said Maj Gen (Ret) Roger Teague, founding partner at Elara Nova and co-author of the White Paper. “One of our key recommendations is to bring both the intelligence community and NASA into the conversation to determine what the system’s future operations and capabilities are going to look like.” 

The aging SCN infrastructure reflects the growing complexities of an interconnected space domain. Through programs like the Proliferated Warfighter Space Architecture, there is a growing trend for de-centralizing space architectures to facilitate greater resiliency in space-based capability. The ground network supporting these architectures, however, has remained the same. 

“We have more satellites coming on-orbit than ever before, all of which are trying to make contact with the SCN antennas as they pass over the Earth,” said Col (Ret) Mark Hughes, partner at Elara Nova and co-author of the White Paper. “The SCN is not designed to handle multi-path connections, so it’s getting to the point of oversubscribing the system’s capability so much that we have to prioritize connections across multiple missions. Therefore, the command and control mission has become more complex at a time when we have to be more responsive in a dynamic space environment.” 

The Command and Control Imperative 

Perhaps no mission supported by the SCN is as vital as the DOD requirement for command and control of its space assets. 

“The SCN is the primary node for command and control of forces in the field, and so it becomes a liability as a single network,” Col Hughes said. “Our adversaries will look to take out this primary node because without it, we can’t ensure that the right space assets will be in the right place, at the right time, in order to get the desired results. We have to move beyond this single network for command and control, which means creating multiple nodes and connection points to ensure greater reliability and security for the Department of Defense.” 

Therefore, Gen Teague and Col Hughes argue that the time is now for the ground system supporting these architectures to de-centralize, as well. If it doesn’t, the SCN will remain an ‘Achilles’ heel’ of the United States’ space architecture.  

“The SCN’s antenna locations are well-known, and so a kinetic strike would do incredible damage,” Gen Teague said. “The system is also subject to constant cyber attacks. So it’s important to consider future requirements that have resilient command and control options available, so that we’re not solely dependent on the current infrastructure associated with the Satellite Control Network as it exists today.” 

Implications for the General Public

While the need to modernize the SCN is already well-known among senior military officials, a successful attack would also carry wide-ranging implications for the general public. To this end, Gen Teague co-authored an opinion editorial with Gen (Ret) John E. Hyten, senior principal advisor at Elara Nova, to amplify the potential consequences of inaction. 

“It is the stated doctrine of both Chinese and Russian leadership to expose vulnerabilities and cripple the space capabilities of the United States, and so the SCN will certainly be in their crosshairs,” Gen Teague said. “That should be a wake-up call to all Americans, because our way of life is being threatened to its core. Space is integrated throughout our daily activities, from driving to the grocery store with GPS navigation, to executing a banking transaction or filling up your car with gas. Therefore, an antiquated SCN architecture creates a vulnerability that we must address as soon as possible.” 

A Call-to-Action for Modernization

In response, the White Paper calls for collaboration within the DOD, and across industry, to develop innovative solutions and operating concepts for the aging ground network.  

“In the past, there have been individual contracts through the respective acquisitions or operations commands, but they haven’t been integrated in their capability delivery like General Saltzman wants,” Col Hughes said. “Commercial space companies should also view this call-to-action as a revolutionary approach to developing the next generation of ground systems, because this modernization will require multiple hardware and software configurations to be integrated with multiple interfaces and configuration controls.” 

Despite what appears to be an overwhelming challenge in modernizing this national infrastructure, achieving a de-centralized ground network remains possible. As an example, the White Paper draws parallels to the Eisenhower administration’s development of an interstate highway system after World War II.  

“General Eisenhower realized the military necessity of a highway system after he saw how efficiently German forces logistically moved capability during World War II,” Col Hughes said. “Then in a presidential role, he recognized that the states were building their own, non-connected, non-standardized and non-integrated road system, which wasn’t going to be sufficient. So he raised the issue up to a federal level, because national infrastructure is so critical for not only rapidly moving military capability, but facilitating our economic growth. That’s the lesson that we can use to inform the Space Force as it considers this national infrastructure problem.” 

Aligning the Ground Network to Achieve Space Force Doctrine

With a robust, de-centralized ground network in place, the Space Force can follow through on its objective known as Line of Effort #1: fielding combat-ready forces.  

“General Saltzman’s edict is about more than just deploying technology hardware at ground stations,” Gen Teague said. “It has to include the people who operate, acquire and sustain this ground network as we ultimately transition to Integrated Mission Deltas. So the White Paper gets back to the core objectives that General Saltzman is trying to achieve: bringing the acquisition, operations and sustainment communities together to field an operating capability of a modernized system at a much faster pace.”  

An escalating threat environment in space, particularly from peer adversaries like Russia and China, signals that time is of the essence to implement a new, modernization strategy.  

“The number one take-away for the audience is that the time for action is now,” Col Hughes said. “The SCN has been a neglected part of the critical infrastructure for too long. The mandate for space forces is to unify our understanding of the requirements and come up with a new approach to build a more resilient and technologically responsive ground system for the warfighter and civilian agencies.” 

Elara Nova and Thought Leadership for the Space Industry

That is why Elara Nova’s efforts go beyond the advocacy role of its White Paper, to include facilitating collaboration across the space community to develop innovative solutions and operating concepts.  

“We have received overwhelmingly positive feedback for highlighting the Satellite Control Network – which truly affects everyone,” Gen Teague said. “But there still needs to be a conversation about determining the appropriate resources to modernize it. As the White Paper suggests, we must bring forward an Integrated Mission Delta approach, to include the intelligence community and NASA, to develop a solution for this issue and field a new capability quickly.” 

The SCN, however, is not the only system under the Space Force’s purview that will require modernization. Therefore, after successfully establishing itself as a thought leader within its first year of operations, Elara Nova is embracing its emerging role in delivering industry-leading research to meet the demands of national security space.  

“The Department of Defense and the U.S. Space Force have a number of different systems that have similar stories to the Satellite Control Network, in that they’re aging and outdated,” Gen Teague said. “This White Paper is part of a broader initiative within Elara Nova for thought leadership, as we look to address the space security issues of today and into the future. So as we look through our leadership lens, we are going to be engaging on a number of different topics in the days, weeks and months ahead to address these issues from an independent perspective, because we have to get it right.”  

Elara Nova is a global consultancy and professional services firm focused on helping businesses and government agencies maximize the strategic advantages of the space domain. Learn more at https://elaranova.com/.