The garage where David Packard and William Hewlett started their new company in 1938 as recent Stanford University engineering graduates. (Credit: Daniel Terdiman/CNET Networks)
Since World War II, the United States has productively invested an astronomical amount of money in the research and development of “pre-competitive” technologies to achieve its goals for both the Nation’s defense and its competitiveness within the global marketplace. The American Space Program is one of many shining examples of the payoff.
Over time, subsequent rounds of government-funded development can transition specific pre-competitive technologies to the point where they become “competitive” — ready for deployment in commercial ventures that constitute attractive investment opportunities for the far deeper pockets of the capital markets.
When this happens, it is natural and appropriate for government to transition how it acquires that technology from requirements-based to performance-based procurement frameworks. The result is more capability at lower price points, and thereby more productive use of taxpayer dollars.
It is arguable whether the White House’s controversial cancellation of NASA’s Constellation Program heralds the evolution of rocket technology from pre-competitive to competitive. However, if it does, the government-as-customer stands to gain substantially by purchasing less expensive, more capable, and more reliable launch services from providers that are fully exploiting the power, productivity, and significantly larger resources of free market capitalism.
Moreover, this trend is not merely limited to how our government gets to orbit. More space program payoffs are just around the corner.
Aerospace is no longer a vertical stovepipe exclusively populated by a small cadre of highly trained “rocket scientists.” It is going horizontal, like the IT community of the 1960′s did — propelling crossover advances in a broad range of 21st Century industries such as location-based, energy, biotechnology, nanotechnology, optics and photonics, materials, robotics, and natural resources exploration and development.
To optimize the benefits of this transition for both customer and provider, current policies and regulations governing federal procurement must be adjusted. For example, Federal Acquisition Regulations and other similar rules that frame traditional cost-plus-fixed-fee federal contract relationships must now also accommodate the substantially different fixed-price business models that characterize the capital markets. ITAR/export administration, patent protection, and employment visa rules must also be updated and optimized.
And, since this transition is likely to be gradual over a long period of time, the development of “hybrid” procurement environments that simultaneously possess coordinated requirements-based and performance-based aspects would be highly desirable.
If America’s spacefaring agencies embrace this technology maturation process and are willing to let go when the time is right, the dividend from decades of government investment in aerospace R&D will be a robust American procession of job creation and productivity, investment opportunities, and community stability and growth for generations to come.
Filed under: Constellation Program, Entrepreneurship, government procurement, intellectual property, Public policy, Space 2.0, Space 2.0 in-depth
