Over the last several years, commercial space service providers have outpaced governments in space operations. At the same time, international tensions are increasing as the United States, Russia, and China engage in strategic competition. As a result, space is becoming an increasingly congested and contested environment. The U.S. military is becoming more reliant on space systems provided by commercial operators who also provide services to civilian clients on the same platforms. These commercial space systems face increasing physical and cyber threats from adversaries. To promote the quality and resiliency of commercial satellite services providers, this article analyzes the relevant U.S. statutory law, common law torts, and international legal framework to develop a two-part legal approach to indemnify commercial providers for losses incurred by adversarial action as well as to increase the importance of system risk and resiliency in source selection. This approach would ensure that commercial satellite providers can continue supporting United States Space Command’s mission in an increasingly contested environment.
Space systems are ubiquitous every day in supporting the military and are increasingly relied upon for mission accomplishment. This reliance on space is the reason that the United States Space Command’s stated purpose is to “ensure there is never a day without space.” Commercial space providers are increasingly fulfilling the communications needs of the military. At the same time, space is becoming a more contested environment, and the risk of adversarial action is increasing.
Adversaries could target commercial spacecraft providing services to both the military and civilian customers. Adversarial action could include cyberattack, jamming or spoofing, directed energy weapons, or kinetic actions. Spacecraft could be targeted even when not actively performing work for the federal government. Without a contract provision that provides for indemnification, the risk of loss is borne by the contractor. The current regime of international treaties does not provide standing for commercial entities to assert a violation or obtain compensation. Damage to a spacecraft could have a devastating financial impact on a company, making vendors less willing to service the military because of these associated risks.
The federal government should indemnify vendors who suffer losses from adversarial action since a commercial spacecraft’s status as a military contractor asset makes it a target for adversarial action. The proposal supporting indemnification stems from common law tort actions and is informed by international and domestic space law. Indemnification from the U.S. Government would reduce financial risk for vendors seeking to do business with the Department of Defense and other space agencies. Additionally, due to increasing risk of adversarial action to spacecraft, the Department of Defense should require source selection authorities to analyze technical risk and assign a high-risk value for space services procurements. This analysis would ensure vendors incur fewer losses when facing adversarial activities and would encourage industry-wide risk mitigation.
The last few decades have witnessed the exponential acceleration of the commercial space enterprise. Where space was originally the domain of governments, thousands of satellites are now in orbit from many nations and private corporations alike, with over 100,000 commercial launch license requests anticipated over the next decade. Commercial spacecraft can serve both government and private sector requirements on the same platform. One emerging concept is known as “rideshare,” where several satellites (including both civilian and military) are launched on the same space vehicle, reducing costs of access to space. Another concept is that of the satellite bus, where a single satellite hosts multiple payloads performing different functions for different users. In acquisitions, the Space Force is gravitating towards purchase of satellite services from commercial operators, with the same satellite potentially serving multiple clients who can transmit and download data at the same time. Purchasing services instead of procurement of entire dedicated space systems can result in substantial cost savings to the government.
Many commercial space technologies provide dual use (for civilian and military purposes), such as communications or imagery, making them potential targets of adversarial aggression. For example, SpaceX’s recent decision to provide Starlink Internet services in Ukraine rendered its satellites susceptible to targeting by the Russian government. This possibility has led to SpaceX expressing concerns about the use of its Starlink technology for military purposes due to threat of retaliation against its space assets.
United States Space Command (USSPACECOM) is a combatant command that conducts space operations to “deter conflict, . . . defeat aggression, [and] deliver space combat power for the Joint/Combined Force.” USSPACECOM has several key efforts to support its mission. These include monitoring competition in space, fielding fully operational capabilities, maintaining relationships with coalition partners, maintaining digital superiority over competitors (including cyber resiliency), and integrating commercial and interagency partnerships, including promoting responsible behavior in space. USSPACECOM oversees the space components of each of the armed services.
United States Cyber Command (USCYBERCOM) is a combatant command with the purpose of achieving and maintaining superiority within the cyberspace domain. USCYBERCOM also has several key imperatives. These include achieving and sustaining overmatch of adversary capabilities, creating cross-domain operational advantages in cyberspace, creating information advantages, providing an agile and responsive force, and supporting partnerships with private sector, government agencies, and coalition partners.
The mission of the Space Force is to provide freedom of operation for the United States in, from, and to space, conduct space operations, and protect the interests of the United States in space. This includes the development, acquisition, and launch of space assets and services, as well as operations of space assets not assigned to other commands. The Space Force recognizes that many threats to space assets, both government and commercial, operate in the digital realm. To that end, USSPACECOM and USCYBERCOM have been working towards greater interoperability, including exercises that focus on combating cyber threats to space assets. Additionally, to support interoperability, USSPACECOM integrates cyber considerations into its operations since space systems operate within the digital domain.
As the United States military relies on commercial providers, those vendors become potential targets for adversarial action. Adversaries that may want to act against commercial space services providers contracting with the military include governments in strategic competition as well as non-state actors, such as transnational terrorist organizations, criminal entities, or “hacktivist groups.” Adversaries can use a range of measures to interrupt or deny services or retaliate against commercial operators. These activities range from disruption (temporary interruption of services), denial (temporarily eliminating access to services), degradation (permanently impairing the use of a system, usually involving physical damage), up to destruction of a spacecraft. Space or ground systems may be targeted for adversarial action at any point in a satellite’s orbit, even if it is engaged in services for civilian clients and is not continuously providing services to the military.
Disruption would typically be accomplished through communications jamming. Jamming occurs at the receiver through interruption of the uplink ground station signals or downlink signals from the satellite to disrupt communications. Denial can be accomplished through cyberattack, such as a distributed denial of service attack on ground station systems or false data uplinked to a spacecraft. Degradation can occur through use of electromagnetic weapons, directed energy weapons, or laser weapons to “dazzle or damage satellite optical sensors,” disabling a satellite in orbit. Destruction can be accomplished through kinetic means, such as anti-satellite weapons or physical means to destroy a spacecraft or create debris fields. Adversarial actions can be accomplished at a distance or through rendezvous or proximity operations. Satellites with a main purpose for orbital debris cleanup or refueling, such as the Russian satellite Cosmos-2542 or Chinese satellite Shijian-21, may also be used to “approach, interfere, or attack” other spacecraft through use of nets or tethers to move or capture a satellite or electronic means.
Russia has engaged in adversarial action on multiple occasions against commercial satellite communications providing services in Ukraine. Just prior to the February 2022 invasion, Russia deployed a degradation of services cyberattack on Viasat satellite communications terminals. The attack launched malware that erased data on modems and routers, resulting in thousands of terminals becoming permanently disabled. After the invasion, SpaceX provided Starlink satellite communications terminals to Ukraine through the United States Agency for International Development. To disrupt services, Russia jammed the frequencies used by Starlink for “hours at a time.” In March 2022, SpaceX released a software update to Starlink ground terminals that rendered Russian jamming ineffective.
Because of the increased risk that commercial satellite services providers face when serving the military in a contested environment, potential vendors may be reluctant to take on the risk of working for the military. If a company loses a spacecraft, then that could result in the company going out of business due to the costs of the loss. Without adequate assurances or compensation for companies to take on the additional risk of being targeted, the government may face a lack of qualified bidders for services contracts, making obtaining those services more expensive.
Space law is evolving based on the increasing proliferation of commercial space operators. International treaties, such as the Outer Space Treaty and Liability Convention, form the basic framework of space law. The Outer Space Treaty and Liability Convention provide for international responsibility for commercial entities operating in space. The United States has implemented domestic law and regulation for launch and operator licensing for commercial spacecraft and ground stations. As orbital debris becomes more of a concern based on the congested space environment, like-minded spacefaring nations are developing nonbinding guidelines and principles for orbital debris mitigation and peaceful exploration of space.
The Outer Space Treaty forms the bedrock of space law. It is permissive in nature, but it also sets bounds on conduct among spacefaring nations in the interest of engaging in cooperative exploration and use of space. Governments are required to carry out their activities in outer space within the parameters of international law, “in the interest of maintaining international peace and security.” Article IX states that parties “shall be guided by the principle of co-operation and mutual assistance and shall conduct all their activities in outer space . . . with due regard to the corresponding interests” of the other parties, and the provision states that parties are to undertake international consultations if they believe their activities could cause “harmful interference” of other parties’ peaceful exploration and use of outer space. However, the Outer Space Treaty fails to define key terms like “due regard” and “harmful interference,” leaving them open to interpretation.
While harmful contamination specifically addressed cross-contamination of Earth’s environment or the space environment, harmful interference is generally understood to encompass terrestrial observation of space, radio frequency interference, and physical interference with freedom of movement in space. The Treaty also provides that nations may seek to consult with each other if there is reason to believe that a party nation’s activities in space would potentially cause interference with another party nation’s interests. It is unclear whether the consultation provisions have ever been applied.
When the Outer Space Treaty came into force in 1967, governments were the exclusive actors in space. However, the Treaty provided a few forward-looking provisions to lay the groundwork for the activities of commercial interests operating in space. The Treaty provides that a party nation to the Treaty “shall bear international responsibility” for the activities carried out by that nation’s commercial entities. Activities of commercial entities in space require authorization from their respective national governments, and the national government is responsible to provide “continuing supervision” over the activities of commercial entities to ensure conformity with the provisions of the Outer Space Treaty.
In the case of multi-national corporations or joint ventures, assessing which nation bears responsibility may prove difficult because a commercial entity may be conducting space operations from a different country from where the commercial entity’s headquarters jurisdiction is located. International responsibility for activities of a non-state actor may be difficult to attribute if there is no direct control over the entity by a national government. The status of the entity, such as whether is it is legally incorporated or is a non-state actor without official government sanction (such as a hacktivist group), may be a factor in whether attribution applies. Conversely, while the Outer Space Treaty provides for responsibility over commercial entities, it does not provide any standing for a commercial entity to assert a violation of the Treaty by another nation.
In terms of liability, the Outer Space Treaty provides that each nation which “launches or procures the launching of an object” into space, and each nation “from whose territory or facility an object is launched,” is liable for damage to another nation, person, or corporate entity caused by that object in space. However, the Outer Space Treaty provides no liability adjudication mechanism. While the Treaty provides aspirational language for how nations should conduct space activities, it does not have any enforcement mechanism if one nation engages in conduct contrary to the Treaty. The International Court of Justice (ICJ) is the judicial body that would render decisions on Treaty violations. However, while the ICJ can find a nation in violation of a Treaty provision, the decision is not necessarily enforceable. Per the U.N. Charter, the ability to enforce decisions of the ICJ rests with the U.N. Security Council. Enforcement of a decision rendered against a permanent member of the Security Council with veto power, such as the United States, United Kingdom, France, China, or Russia is unlikely to succeed. Coincidentally, these permanent members of the Security Council are all major spacefaring nations. The Security Council has only once chosen to enforce an ICJ decision in its history. Ultimately, despite establishing standards of conduct in space, the Treaty fails to define key terms and fails to provide enforcement mechanisms to ensure nations follow these principles.
The Outer Space Treaty was the first document to provide general guidelines and consensus on how nations should conduct their activities and supervise commercial entities in space. Three other major treaties followed the Outer Space Treaty to elaborate on Outer Space Treaty provisions involving liability, registration of space objects, and rescue and return of astronauts. The Liability Convention provides a framework to resolve damages caused in orbit or to Earth. While the Liability Convention provides a clear standard of liability, it fails to provide a solution because of potential difficulties in determining who may be a responsible “launching state” and the ultimate lack of enforceability of a decision. Under the Liability Convention, fault liability goes back to the launching state for damages caused by a “space object.” For damages caused on the surface of the Earth by a space object, the Liability Convention provides for absolute liability. For damages caused by activities in orbit, the Liability Convention provides:
In the event of damage being caused elsewhere than on the surface of the earth to a space object of one launching State or to persons or property on board such a space object by a space object of another launching State, the latter shall be liable only if the damage is due to its fault or the fault of persons for whom it is responsible.
Under the Liability Convention, potentially responsible launching states are (1) the nation who launched the space object; (2) the nation who procured the launch of the space object; (3) the nation whose territory was used for the launch; or (4) the nation from whose facility the object was launched. If potentially responsible launching states and the nation suffering harm are unable to settle liability amongst themselves, then one of the involved nations may request that a Claims Commission convene to determine fault and damages. However, the Liability Convention’s provisions pose several difficulties for a nation suffering harm attempting to recover damages due to an adversary’s actions.
First, a nation is limited in the types of damages for which it can assert a claim under the Liability Convention. A nation can only recover direct damages to its space object or territory and cannot recover any indirect or consequential damages. The Liability Convention would not apply to cases where a launching state or an entity under its supervision created a harmful condition in space, such as creation of an orbital debris field that limits access to a certain location in orbit, but does not actually cause direct damage to spacecraft. The Liability Convention would not apply in the event of a cyberattack or electronic warfare that disrupts or denies spacecraft operations if such activities either did not result in damage or did not originate from another spacecraft. The Liability Convention does not cover the cost of remediation of the orbital environment. Because a nation may engage in activities that interrupt or deny services but do not damage another nation’s spacecraft, the Liability Convention has limited application.
Second, the Liability Convention’s remedies only apply to nations or international intergovernmental organizations that are parties to the treaty. When a commercial entity is harmed by activities of another government or non-governmental entity, the company must request its national government to assert a claim on its behalf. Application of the provisions of the Liability Convention, where fault is traced back to the “launching State,” can also lead to absurd results where a country could be found liable under the Liability Convention even though it had nothing to do with the operation of the space object that caused damages. This can make it difficult to enforce compensation against the owner or operator of a space object that caused damages.
Third, even if a nation asserts a claim under the Liability Convention, it may find fault and damages difficult to prove and recovery impossible. The Liability Convention provides for the convening of a Claims Commission in instances where nations dispute liability. The Claims Commission has authority to render a decision and award. A Claims Commission would follow “international law and the principles of justice and equity” (i.e., customary international tort law) to determine “fault.” The Claims Commission may reach a different result depending on whether it applies a common law or civil law perspective. Proving negligent conduct requires sufficient evidence to show a duty of care, breach of the duty of care, causation, and damages. Defining the duty of care may be difficult because there is no international negligence standard. The best evidence that could establish duty of care are non-binding guidelines promulgated by the United Nations and several spacefaring nations. These guidelines may provide a standard of practice within space that gives evidence of a duty of care. However, the lack of specific standards creates difficulties in determining fault for on-orbit activities or collisions. Even if a nation obtains a damages award from the Claims Commission for harm suffered, such decisions are unenforceable because the award is nonbinding.
In the United States, commercial spacecraft launch and operations are largely governed by regulations in accordance with the Commercial Space Launch Act. A launch license is required for spacecraft launch and/or re-entry. As part of obtaining a launch license, the operator must abide by regulatory collision avoidance standards. The Commercial Space Launch Act prescribes required insurance for launch activities. A licensee must have insurance or demonstrate adequate financial responsibility for third-party damages. However, insurance or financial responsibility is only required for launch plus thirty days.
Operation of satellites is largely governed by the Communications Act. Regulations promulgated under the Communications Act require Federal Communications Commission (FCC) authorization for transmissions from satellites to ground stations. The National Oceanic and Atmospheric Administration (NOAA) issues licenses for remote sensing applications. To receive operation authorization, several requirements must be met to mitigate risks of orbital debris creation. Any foreign-licensed satellite seeking operation authorization must provide the same certification to access the U.S. market. New orbital debris mitigation standards provide more specific orbital debris mitigation requirements, such as collision avoidance systems, trackability, registration, and mathematical demonstration of likelihood of collision being less than 1 in 1,000. There is no insurance requirement for satellite operation, though a satellite operator must post a bond with the FCC to guarantee compliance with regulatory provisions. While commercial space launch and operations law provides orbital debris mitigation, they do little to protect against other adversarial activities.
Currently, no customary international law squarely addresses responsible behavior in space. However, several nonbinding sources of standards have been developed. First, the precautionary principle provides that nations should avoid taking actions resulting in environmental harm without balancing the risks of harm against the benefits of the action and adopting appropriate mitigation measures. Second, international debris mitigation standards aim to reduce orbital debris. While compliance with debris mitigation measures is increasing, those standards are currently nonbinding and, thus, cannot be used to establish customary international law at this point. Another example of nonbinding international standards is the Artemis Accords. This multilateral agreement is a “political commitment” to a set of nonbinding principles for conducting peaceful space exploration. Eventually, with widespread adoption and consistent state practice, these standards could form the basis of binding customary international law. However, with space becoming a more contested environment, this is not likely in the near future.
At common law, interference with personal property of another can lead to liability, even when the property at issue is not destroyed. Potential causes of action that a commercial spacecraft operator could have against an adversarial actor include trespass to chattel, conversion, or negligence. Even with a valid claim, a harmed corporation would likely not be able to prosecute such a claim against an aggressor nation or party. First, the nation perpetrating the harmful activity would provide an unfriendly forum. Second, the harmed party would have difficulty establishing personal jurisdiction over a foreign defendant unless the foreign defendant conducts sufficient business within the victim’s jurisdiction or meets the limited exceptions provided in the Foreign Sovereign Immunities Act for U.S. parties or similar laws in foreign nations. Nevertheless, exploring the potential for the basis of a tort claim is helpful when considering both the definition of “harmful interference” under the Outer Space Treaty, as well as potential parameters for an indemnification solution.
Trespass to chattel and conversion both require intent on the part of the actor to engage in conduct that results in deprivation of use or destruction of the personal property. In a case where an adversary is deliberately targeting space systems for malfeasance, the requisite intent exists to prove trespass to chattel or conversion. Negligence does not have an intent element, but rather requires the establishment of a duty of care (the duty to act as a reasonably prudent person would or the duty to avoid “harmful interference”), breach of the duty of care, causation, and damages.
Trespass to chattel involves intentional interference with the owner’s use of property. The interference must be classified as a dispossession, unauthorized use of property, or intermeddling with use of property. Intermeddling involves physical contact with the property; in the space arena this contact could include an attack with an anti-satellite weapon or rendezvous operation. Considering the speeds at which spacecraft travel, kinetic action would result in serious damage or destruction. Rendezvous operations could be accomplished by spacecraft equipped to grapple with or collect other spacecraft with nets and tethers, including orbital debris cleanup satellites. Dispossession involves actions such as taking property from the owner’s possession or barring owner or authorized user access. Potential actions such as jamming or hacking into ground station systems to take control of space systems may qualify as dispossessions under trespass to chattel. The damages available to a spacecraft user under trespass to chattel involves compensation for any damage done to the spacecraft, as well as compensation for loss of use.
Conversion involves an intentional exercise of control over another’s property that seriously interferes with the right of the owner or authorized user to control the property, such that the actor should be required to fully compensate the owner for the value of the item. A conversion action analyzes several factors to determine seriousness of the interference. From a rendezvous or proximity operations perspective, an adversary using directed energy weapons could completely disable a satellite’s payload, rendering it useless. From a cybersecurity perspective, an adversary hacking into communications systems to send false commands or jamming communications could be liable under a conversion theory if the adversary’s actions deprive the user of access to the satellite’s capabilities for a long period or cause permanent damage. In such a case, the adversary might be liable for the full value of the space system.
This article provides two proposed solutions to ensure that the military can acquire high-quality commercial space services and ensure cost efficiency over procuring dedicated space systems. First, the federal government should provide indemnification that would cover a loss from adversarial action. Second, acquisition policy should ensure that the risks of adversarial action and the provider’s offered countermeasures are considered as a technical risk factor in source selection of space services providers.
Indemnification would reduce the risk faced by commercial satellite services providers serving the military. When a commercial space services vendor works for the military, the vendor opens itself up to risk of adversarial action. To date, these actions have been benign. However, adversaries have the capability to cause serious damage. Space services providers may not be adequately capitalized to continue providing services during a conflict if they face a severe financial loss.
Indemnification would compensate the provider for losses incurred from adversarial action. While insurance is only required for the first thirty days following launch, indemnification would cover losses incurred after insurance lapses. For space services, indemnification could cover a full array of potential damages incurred, from loss of use and lost revenue up through compensation for damages or destruction of spacecraft. Indemnification could be provided through a claims process or through the federal government paying the contractor a fee within the contract for the services provided to obtain adequate insurance to cover the space systems for the term of the contract.
Indemnification would financially enable a vendor to reconstitute its assets. Because it can be difficult to ascertain which of a vendor’s satellites are providing services to the military, and when those satellites are providing services, a vendor’s spacecraft could potentially be targeted at any time, regardless of whether it was actively providing services to the military at that moment. Thus, indemnification should be provided regardless of location in orbit or whether a spacecraft was actively providing services to the military at the time of loss. Indemnification would be a secondary payer to insurance coverage that the commercial operator has in place. Even if a satellite operator has insurance covering its space systems, indemnification may be needed because many insurance policies exclude losses due to war or hostile action from coverage. Available funding could be a factor in the level of indemnification that the government provides. The federal government then could employ sanctions or international remedies to attempt to recover costs incurred for indemnification.
Indemnification on the scale proposed in this article would likely require specific authorization from Congress to surmount potential fiscal law issues. Under the Anti-Deficiency Act, the federal government cannot spend money without a specific appropriation from Congress. Appropriations provide limitations on the purposes for which the funds may be spent, the time during which the funds may be spent, and the amount of funds that may be spent. Federal agencies typically operate through one-year appropriations for operations and maintenance of the federal agency. Congress also appropriates funds for special purposes such as research and development and also creates accounts with their own funding mechanisms outside of the appropriations process, such as the Superfund for industrial contamination cleanup. Since indemnification claims could arise at any point and claims could exceed amounts available under the current year appropriations applying to the underlying contract, an indemnification program would likely need a specifically appropriated multi-year funding source from Congress, similar to the Superfund program. As a backstop to prevent any fiscal law issues, any indemnification clause in a services contract would have to be subject to the availability of funds.
Federal indemnification has been provided in other contexts, to include ultrahazardous activities, research and development, environmental restoration, and COVID-19 response. While there is precedent, absent a regulatory determination that space activities are ultrahazardous, indemnification would likely require statutory implementation to ensure the availability of funding based on the scope of potential indemnification. Indemnification reduces contractor risk exposure. This solution will ensure that the military is able to procure high-quality commercial services at lower cost than dedicated space systems and help mitigate what is otherwise a significant barrier to additional competition in this arena.
As a counterpart to indemnification, space services procurement should also consider the vulnerabilities of a potential vendor’s systems to adversarial action. Consideration of space systems’ resiliency could reduce the potential amount of indemnification required. Risk reduction from a technical standpoint based on source selection factors, such as equipment hardening, would render spacecraft and ground stations less susceptible to interruption of services or damage from adversarial actions. As a result, reduction of vulnerabilities to a potential vendor’s systems would result in needed indemnification compared to a program of indemnification alone.
When the federal government purchases goods and services, procurement officials solicit bids from vendors and analyze competing proposals to determine best value for the government. In each procurement, the source selection authority may assign different weights to various factors such as cost, technical capability, quality, risk, and past performance to determine the best value. The factors of cost, quality, and past performance are the only mandatory factors. Source selection authorities have wide latitude to determine best value in each procurement.
When evaluating an offer, the source selection authority assigns strengths and weaknesses to each factor, which together with the factor weightings, helps determine which offeror receives the contract. A technical risk factor assesses the risk that an offeror’s proposed technical approach could cause delayed, degraded, or unsuccessful performance, increased costs, or need for increased oversight. In a space services procurement, the technical risk factor should encompass the degree of risk faced by the offeror, including cybersecurity vulnerabilities and susceptibility to kinetic or non-kinetic adversarial action. Currently, the source selection authority has discretion whether to consider a technical risk factor and the weight to assign to it, so technical risk could range from no consideration to the most important consideration in an evaluation. Thus, currently there is no consistency from one procurement to another for consideration of technical risk of loss or interruption of services from adversarial action.
The Space Force’s commercial space services acquisition departments, such as Space Systems Command, should mandate consideration of technical risk for commercial space systems. Such a policy should be a collaborative effort with USSPACECOM and USCYBERCOM based on the potential adversarial threats faced by space systems and the available technology or measures that can be used to mitigate these threats. Technical risk could be evaluated on a continuum based on the risk to the mission if adversarial action takes a space system offline.
In addition to the technical risk that a potential vendor faces, technical risk can also award strengths for mitigation measures implemented by a vendor. One potential advantage provided by emerging large constellations is product redundancy. If a group of satellites is destroyed or taken offline, services can continue uninterrupted because of the availability of the remaining satellites, which may number in the thousands in some constellations. Cybersecurity should be an important mitigating factor to risk from cyberattack on ground systems or spacecraft. Other mitigation measures include shielding against kinetic or electromagnetic attack or on-orbit maneuverability to escape an aggressor’s rendezvous or proximity operations. A focus on technical risk and mitigation measures in source selection, informed by operational perspectives from USSPACECOM and USCYBERCOM, would drive resulting innovation by industry. As a result, commercial providers would design and operate their systems with a priority on risk mitigation, making them less likely to face losses from adversarial action. This priority would help ensure that USSPACECOM and other operators receive more resilient commercial platforms. The government would receive a better product from commercial providers and could face fewer claims than a program of indemnification alone by consideration of risks and resiliency within source selection.
The military’s increasing reliance on commercial industry for satellite communications and imagery services creates added risk that an adversary will disrupt services or damage systems. Commercial providers do not currently have good legal recourse for this contingency. The Outer Space Treaty and Liability Convention do not provide reliable legal recourse for companies. U.S. domestic law currently does not provide an avenue for recovery in the event of loss either.
To encourage commercial space industry to provide services to the military, and encourage competition for contracts, the federal government should indemnify contractors for losses that may be incurred due to adversarial action, even if the satellite was not actively engaged in military activities when the loss occurred. Contractors should be indemnified for any physical damage to assets as well as loss of their use, even if temporary. The federal government can seek recovery for indemnification compensation provided to the contractor against the responsible adversary through sanctions or international treaty provisions.
In addition to providing indemnification for space services vendors, acquisition policy should require that adversarial action risk and mitigation measures be considered when awarding space services contracts. Policy could dictate the weight that technical risk receives compared to other factors for contract award. By implementing a policy to minimize potential risk at the outset of source selection, the government would be able to provide more reliable services for operations and reduce the amount of indemnification needed.
Coupling indemnification with technical risk analysis in source selection would minimize the potential for losses, providing stability and certainty to vendors and space operators. This enables cost savings from using commercial services procurement instead of requiring a dedicated satellite platform. Indemnification would provide certainty that the vendor would be compensated in the event of adversarial action. Technical risk analysis would ensure that the government selects more secure/resilient spacecraft platforms, ensuring reliability for operators and reducing the potential indemnification needed. Together, these suggested approaches will assist the military in acquiring the commercial space services necessary to accomplish its mission.
