Bipartisan House Intelligence Committee Report Concludes NRO Buys Excess Satellites

As the House readies to adjourn for the August recess, the House Intelligence Committee today released a bipartisan report on how to save money in the procurement of intelligence satellites.  The report is the result of a one-and-a-half year committee review of the Intelligence Community’s (IC’s) satellite acquisition processes and was delivered to National Reconnaissance Office (NRO) today (July 31).

NRO designs, builds, launches and maintains the nation’s intelligence satellites and is headed by Director Betty Sapp.  It is one of 17 members of the IC, which is coordinated by the Director of National Intelligence (DNI), James Clapper.

In a press release, committee chairman Mike Rogers (R-MI) and ranking member Dutch Ruppersberger (D-MD) said the report “pinpoints specific areas where the IC can improve its purchase of these important systems.”

The report is classified, but the committee released a 9-page unclassified summary.  The bottom line of the report is that NRO buys satellites “faster than necessary to meet mission requirements in order to stabilize the industrial base,” but has not “sufficiently scrutinized” its assumptions on what is needed to achieve industrial base stability.  Its assumptions are based on information from the prime contractor and “NRO lacks sufficient visibility” to verify that information. 

“NRO assumes it must buy satellites at a relatively fast pace because a slower pace would lead to an increased cost per satellite. …. Unless the higher cost of slower production exceeds the cost of an excess satellite, the assumption that slower paces are too costly is flawed,” the report concludes. 

In the committee’s view, the burden is on the Office of the DNI (ODNI) and the NRO to ensure assumptions are correct and they are not paying more than necessary.  Among its five recommendations, the report calls for the ODNI to verify NRO’s assumptions externally, not using contractor-supplied information.  Specifically, it says ODNI should create a plan for using data from the Department of Commerce’s ongoing “Space Industrial Base Deep Dive” study to verify assumptions and start exploring alternative studies in case those data are inadequate.