PARIS — The U.S. National Geospatial-Intelligence Agency (NGA) could be forced to renegotiate elements of two multibillion-dollar commercial satellite imagery contracts with U.S.-based DigitalGlobe and GeoEye as it implements a $50 million cut to the agency’s fiscal 2012 budget appropriation and braces for even more substantial spending reductions to the EnhancedView program in fiscal 2013 and beyond.
Valued at $7.3 billion, the 10-year EnhancedView program has come under increasing budget scrutiny from lawmakers and administration officials as the U.S.seeks to reduce spending in line with a massive drawdown in military might around the world.
For now, the initial funding cut of $50 million represents a roughly 10% reduction to the program total this year, though NGA has some discretion in determining how the cuts are allocated. Internal deliberations are ongoing and NGA is expected to make a decision in the coming weeks.
“You’re going to have to find a way to probably restructure the current service-level agreements with both companies if they’re going to take $50 million out,” says one geospatial-intelligence industry official familiar with EnhancedView. “Any reduction in the budget on the service-level agreement means you’re changing the scope of the contract and you have to renegotiate.”
Last month, the Pentagon hinted at even more significant cuts to NGA’s commercial satellite imagery purchasing power, just weeks before the Obama administration is expected to send its fiscal 2013 budget blueprint to lawmakers Feb. 13. During a Jan. 26 news conference, U.S. Defense Secretary Leon Panetta outlined the Pentagon’s strategic spending priorities for fiscal 2013-17, a plan that could save roughly $260 billion over the next five years by paring back U.S. military forces and spreading cuts across service procurement programs, including purchases of commercial satellite imagery capacity “excess to requirements.”
In the meantime, NGA is awaiting the expected mid-April outcome of a White House-directed study evaluating EnhancedView requirements.
Led by the Office of the Director of National Intelligence (ODNI) and the Under Secretary of Defense for Intelligence (USDI), the findings will come too late to lessen the impact of the fiscal 2012 spending cut, though they could inform the level of further reductions to commercial satellite imagery purchases in fiscal 2014 and beyond.
NGA spokeswoman Karen Finn declined to comment on the NGA budget, which is classified, but she says the agency “supports commercial imagery as a vital part of geospatial intelligence, and EnhancedView as part of the commercial imagery program.”
Longmont, Colo.-based DigitalGlobe had not responded to a request for comment by press time, but GeoEye of Dulles, Va., says any cuts to commercial satellite imagery funding are inconsistent with the Pentagon’s strategic and budgetary priorities.
“Moreover, cuts to the EnhancedView program would be counter to presidential policy on commercial remote-sensing,” GeoEye says in a written statement. “One goal of that policy is to advance U.S. leadership in space-based Earth observation and geospatial technology. It also enabled the decision for a 2+2 commercial and classified imagery architecture, which resulted in EnhancedView. It would seem cuts to the commercial imagery program would undermine this goal.”