‘On the table’: Hicks says DoD, IC considering indemnifying commercial space providers

DSD Hicks Visits Southwest Border in Arizona

Deputy Secretary of Defense Dr. Kathleen H. Hicks tours the Nogales Border Patrol Station Mobile Surveillance Capabilities Site, Nogales, Arizona, June 11, 2021. (DoD photo by U.S. Air Force Staff Sgt. Brittany A. Chase)

INTELLIGENCE & NATIONAL SECURITY SUMMIT — Deputy Defense Secretary Kathleen Hicks today said that the department, including the Pentagon’s Intelligence Community partners, is looking at the possibility of indemnifying commercial space firms that become targets in conflict due to their support for US national security goals.

“It does require us to think about how we contract effectively, to include issues like indemnification,” she told the Intelligence and National Security Summit co-sponsored by the Intelligence National Security Alliance (INSA) and the AFCEA. “That is absolutely on the table.”

The question of potential indemnification has been swirling around government and industry circles for some time as national security agencies have increased reliance on innovative, and lower cost, commercial capabilities. In particular, the National Reconnaissance Office (NRO) and the National Geospatial-Intelligence Agency (NGA) in the last few years have greatly expanded use of commercial remote sensing — with commercial firms now being eyed as part of a so-called hybrid architecture to provide the IC and the US military with tactical intelligence, surveillance and reconnaissance (ISR). But doing work for the government has raised fears that commercial providers could become targets during a conflict.

That trend that has only been turbo-charged by the war in Ukraine.

David Gauthier, NGA’s head of commercial operations, told the INSA/AFCEA summit today that the agencies have “doubled” the amount of commercial data normally ingested as a result of the war.

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Further, Russian cyber attacks against Viasat and SpaceX satellite communications systems being used by Ukrainians have thrown a spotlight on the question of how DoD and the IC can “protect and defend” commercial partners to the forefront.

Indeed, Gauthier said that the issue is now on the agenda of the IC’s Commercial Space Council.

“We have some obligation to think about commercial protection. And so the IC Commercial Space Council is discussing commercial protection right now. We had a meeting on Tuesday, and it came up,” he told the summit. “I was pleased to hear SecDef earlier today say we’re even considering indemnification. So, all considerations are on the table. And we’ll work with industry and the government to figure out what the best mix is to solve the problem.”

There is precedent for the concept of indemnifying commercial providers actively contributing to military missions, based on practices of the Air Force’s Civil Reserve Air Fleet (CRAF) and the Maritime Administration’s National Defense Reserve Fleet. Under both of those constructs, commercial participants are essentially reimbursed if their plane or ship is damaged or destroyed after being nationalized and deployed.

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