As Europe rearms, there is growing consensus that traditional modes of procuring armaments and services are no longer fully fit for purpose. Talking to ICEYE about procurement in Europe, it was clear that across the continent, procurement is changing – except, unfortunately, in the UK.
Specialising in synthetic aperture radar (SAR) satellites, Finnish company ICEYE is currently billed as one of Europe’s fastest-growing space companies. Space capabilities and intelligence, surveillance and reconnaissance (ISR) are areas that Europeans have traditionally outsourced to the United States, but this has begun to shift. Increasingly, more domestic solutions are being sought by European governments.
As a case in point, ICEYE’s satellites have become popular with a number of European governments, including the Netherlands, Greece, and Poland. This has been due to their relative affordability and, crucially, their ITAR-free nature, ensuring that their development cannot be hamstrung by US export restrictions. ICEYE already has 70 satellites in its constellation and is expecting to increase that number significantly, with its production rate increasing from the current 50 satellites per year.
Having won several European contracts quite recently, ICEYE is well placed to understand broader trends within the continent’s defence and space sectors. In a conversation with Warsight, ICEYE’s UK Vice President of Missions Damon Olloman was candid in comparing the company’s experiences across different European countries when it came to procurement.
Notably, he was particularly impressed with ICEYE’s recent experience of contracting to Germany’s Bundeswehr, which the company found took a pragmatic approach to the trade-offs of cost, capability and speed, rather than getting tied up in process. Germany military procurement has historically been considered particularly slow and bureaucratic, and as such Olloman’s praise is indicative of the serious changes occurring in Europe’s largest economy as it rearms.
The UK, by contrast, is still typified by the same sclerotic inefficiencies that have plagued it for many years, despite the rhetoric of change from successive governments. Like everyone in the defence sector, ICEYE is awaiting the publication of the much-delayed Defence Investment Plan (DIP) to understand the direction of travel for UK defence. However, it is not just about cash; there is also a lack of serious impetus to try new ways of procurement.
As an example, Olloman suggested a new procurement model for the UK Ministry of Defence (MoD) that would be applicable to companies like ICEYE. Rather than start with a large-scale contract, the MoD could start with ‘GBP 50k’ to test out the services of ICEYE and competitors as a trial, and then award preferred companies with six-month contracts. This iterative approach, Olloman argued, would allow for quicker learning on the part of the MoD and faster delivery.
However, there appears to be little appetite for such methods within the MoD itself, which is still wedded to the model of large, years-long contracts focused on the larger ‘prime’ contractors. The evident frustration with this approach has been replicated in conversations had throughout the British defence industry, especially from companies looking to challenge existing incumbents.
Part of the frustration stems from the fact that faster modes of procurement already exist within British legislation. Models such as neutral vendor frameworks and the Commercial X programme have received positive feedback within industry for greatly increasing the speed and efficiency of the procurement process. However, beyond a few isolated examples, the UK government seems unwilling to go further, whether due to bureaucratic inertia or vested interests.
Warsight also asked about trends in the British, and broader European, space industries. Olloman strongly asserted that the UK space sector has some of the best academic and engineering talent globally. The issue is actually harnessing that talent, and as such the UK’s existing lead is starting to slip. The greatest problem is the infamous ‘valley of death’ faced by so many British technology startups: funding cannot be sustained domestically, leading companies to either fold or move abroad, usually to the US.
The European space sector more broadly is evolving positively, with a particular burst of interest in new spaceports, but the key weakness is the lack of commercially-viable launch capabilities that can compete with US company SpaceX on either affordability, reliability or frequency of launch.
Work is ongoing to change that dynamic in Europe, including through the European Space Agency’s European Launcher Challenge. However, the fact that one of the chosen challengers, UK-based Orbital Express Launch, has since entered administration, is illustrative of both the problems faced by British space startups and the inherent difficulties within the wider launch industry, especially when competing with the dominant SpaceX.
When asked about European routes to competitive launch services, Olloman suggested that a company that could affordably place satellites exactly where ICEYE would like them in orbit, rather than on the pre-determined locations offered by SpaceX, would be very well received.
Despite the challenges, the future appears tentatively bright for the European space industry. However, there is still some way to go before truly sovereign European space power independent from the US can be achieved.
