Transcripts For CSPAN Discussion 20240704

We will break and have lunch. We will regather at 12 20. [indistinct conversations] dr. Hertzfeld so this one will not have as many sort of virtual folks. It is all in person. Soho karen has readily managed her risks by not having any virtual dispense on her panel. Not sure how she did that. It is all of this year. We talked about the task and experienced before, and this is more future looking and where are we going now . Karen com over to you. U. Karen thank you, scott, and actually, we are all holograms. No one is actually here. [laughter] i was not speaking into it. I was speaking into this volunteer im not sure why it is there. That is for cspan. [laughter] dr. Pace an advertisement for cspan, im watching their feet, the recording, it looks excellent. Whenever it is available, i urge you to take a look at that. That probably be the reporting of record for this event. Thanks. Karen ok. Welcome to panel 2. Well be talking about future strategies for Publicprivate Partnership. I think it is an interesting time and a lot of unique risks that we are facing these days, that Many Industries are facing these days could we will take a look at how best to make these risks, and here we have 18. We have an attorney here who understands the legal issues. We have a fellow here from inqtel. I will ask them all to introduce themselves briefly. We have jen ross here, who can tell a company how best to approach the government, and we have chris, who understands the risk and how to approach the interest side. I would like to briefly ask you to give a brief introduction, and we will move forward. Kevin i name is kevin pomfret. Im a partner with Williams Mullen law firm in tysons. Before going to law school, i was a satellite imagery analyst, the predecessor clerk nga, and i worked on the soviet missile account, which tells you how long ago it was cute i work with a lot of geospatial Satellite Companies and a variety of commercial and government contracts and things. Im also on the Advisory Committee to noaa. Hopefully we will get started quickly. I work with some foreign governments on legal and regulatory issues, counseling them, and i also class at john. Yes i also teach a class at johns hopkins. Tom hi, tom gillespie, i am a managing partner at inqtel, we investing commercially focused startups. We have been involved in space of the last eight or nine years. We take board observer seats, investments on about 17 of those. Jen hi, everyone, i am jen ross, a consultant to spacer this commandment, staying at the commercial space office. I was at the joint Aerospace Corporation for a few years, and prior to that i was a professional short seller at a hedge fund, so a little bit generic and economics tries to merge together and bring that knowledge to the commercial space office. Chris im chris kunstadter, the global head of space at axa xl. I head up the space insurance group. We head out anyone from many, live providers, space agencies, would have you. Anyone who has an asset for reliability in space, we work with. We do a lot of work with different parts of space landscape, if you will. Karen ok, thank you, everyone. We will launch into our first question, which is about industry and market trends. And what does the future hole, specifically. What are some new and emerging challenges that we must acknowledge and face . I would like to start with tom gillespie. Tom sure. Looking at the commercial market in general, the last number of years, ive seen a lot of private investment come into the sector. Has been a little rougher the last year or two as have cooled up a little bit, but a lot of new investors, interest in the commercial segment. Ukraine, the conflict in ukraine, interesting and how that has played out. We have a couple of companies that have played a role there. I think that is helpful as you look at investment, more interesting in what is going on in the sector. It is not only related to that, it things going beyond, investing in the last number of years. At this point, i think we are looking further out, on out to lunar, so we are seeing a lot of business plans, getting into remotesensing, logistics, space domain awareness, and comms in general. A lot things are happening. Challenges, you know, it is still hard to get meaningful government contracts in a lot of cases. You see Companies Getting initial contracts from places like dod, but you are not seeing huge numbers in some cases, and i think we would like to see, just speaking more broadly for investors, is what is the demand signal out there . If i do something, and it looks like it is going to work for this market, how big does the market get . Who had a background on this company, just knowing, how does it look down the line . The more investors can understand the better and more meaningful contracts happened the better. The last thing i will say is just on the financial side, in general, last year has been challenging for the investor side, particularly in the growth round. That is still kind of the case. I think the space sector nuclear needs to see more financial access. We seen some smallish acquisitions, we seen spacs that have worked out, kind of a mixed bag. So the more they can work out my think that is good. What kind of buzz was that . [laughter] karen i would like to ask you, and i would like a team to tight end. I just attended a conference called investing in space, sponsored by the Financial Times in london, two weeks ago. Part of it is about the hy pe,. Is there hype . One journalist used the term zombie statistics, so where are we in be hype cycle, and how do we deal with that as an industry . Jen i can take some of that. We saw early on, and i go back click quote from josh wolf at lux capital. He said there are fobs and fomo, and a lot of investments we make our fomo, fear of missing out, but also sobs, shame of being suckered. [laughter] 800 liquidity at 0 , investors need a place to put capital, and you saw investment in high risk ventures, right . I can say over the last year and a half, as industries have been rising, we see a different risk tolerance profile. Im seeing different bifurcations in the market. Im seeing less money going to growth stage can still investments in the early states. We consolidation, because they are less exits we are seeing right now, we are starting to see more vacancies for companies that have not happy availability that have not had the ability for spot rounds, cash profitability. So i think we are at that natural consolidation cycle, and it is really going to depend on where Interest Rates go and liquidity goes over the next six months to 12 months. First of all, i think, isnt everything nowadays all hype . That is where we are as a society. There is hype around space but elsewhere. There are Certain Industries where the government have a light touch, and Certain Industries where the government has to facilitate the business to succeed, right . From a regulatory standpoint. I do a lot of work in geospatial, so the Drone Industry several years ago was getting a lot of hype around the geospatial capabilities. But because regulatory issues got so far, a lot of companies are really struggling to degrees a lot of money, but they are struggling, because they cannot do a lot of things they want to do, without getting approval from the faa. Particularly as you move out, the space sector being slow, the regulatory being slow to allow the space sector to do what he needs, to be able to attract investors and to be able to continue to generate revenue and to grow. Karen yeah. It is a good point. I want to come back to consolidation that jen mentioned briefly. Is an interesting time in that regard. Do you think, in the current climate, we are going to see more consolidations, despite the fact that we have an administration that is really scrutinizing heavily these mergers, especially if they are horizontal . Tom i do think we will see more consolidation. I think despite the trends, i think it is part of where we are in the cycle, and on the ventures i, you are going to see companies that have assets that maybe are not making it with businesses, and i think we will see them combined. I do not think they will go away completely. Chris we talk about the space economy. We should probably retire that phrase. The space economy as part of the economy, right . The economy writ large. Space economy does not stand on its own, so when we talk about investments and consolidation and that sort of thing in the space economy, it is actually broader than that. Theres more verbalization, theres more, you know, a company that has satellite is not have a company that has satellites, they have an internet worker would have you. So i think were going to see more sort of crossvertical consolidation, you know, maybe not just Space Companies buying Space Companies, but more broadening of bacteria karen chris of that. Karen chris, they were talking about for that reason, you have the cloud, which is included in that. It becomes almost a double counting kind of function that can occur, but it is large. The key word is convergence with other industries that are growing really quickly. So that goes well for the space as well. But it is just a very hard industry in the sense that it can be very crosscutting to size quickly. Chris things in space take a lot longer than people think. Take a lot longer to bring out a new launch vehicle, to roll out a new consolation. It just takes a lot longer than peoples optimistic, you know, ideas and pitches in that sort of thing. Space may take a long time. Kevin i was going to add, to chriss point, the syndicates are international and filled with corporate and unexpected progress. We are in a deal right now that has got porsche ventures, between ventures, john deere, all over the map, things would not make that would be interested in space ler. Tom yes, our company as an insurance company, we are looking at similar investments, and a competitor of ours, we are doing a few of those, too. Karen i want to get back to synergy and when our Publicprivate Partnerships appropriate, and we are they not appropriate . How can the u. S. Government development, looking forward to the future, some foundational approaches to educate our sector in a more kind of structured way . We heard in the first panel, and moon kim spoke to metricsi wants we look at many of these partnerships. Kevin that is a good question. I have two thoughts. The first, i have been in a lot of meetings where industry and government talk about partnerships. I am always struck by the fact that i think they hear Different Things when that term is used. For industry, i think they hear, i am going to get some revenue and make my investors happy. And theres an opportunity for longterm contract. For government, a think they here, though good, weve got someone to help us pay for what we want to do. For a lot of segments, we are Getting Congress off our back because they keep telling us to work with the commercial sector. Youve got a misalignment of expectations for expectations. It does not dig deeply into the real issues associated with Publicprivate Partnerships. Partnerships are the hardest legal documents to create because you are supposed to Work Together but you have to think about what happens with if you dont. Youre not thinking about ip. Ip risk, liability, return on investment all of the things that in a normal environment you would because youve got misalignment. I think that is a real challenge. The other thing i see, and i am going to reference someone on linkedin i follow, he, the other day, posted he follows the ecosystem and he talked about it being three sectors. Commercial, public good, science and research. The public good would be defense , infrastructure, those type of things. I think it broadly applies to the space industry as well for a lot of the work done in space. From a partnership standpoint, that is really hard. I think government inherently thinks of public good, research and science. Those are different risk profiles, different returns on investment. It is hard for industry to work in a ppp that satisfy its all of the requirements associated. There was a question you asked about weather data, making Data Available to everyone including scientists. That is a great purpose, but there are challenges associated with companies trying to sell to the government and no one is collecting all their money to buy a global data set. That is hard to work in a business environment, whether it is ppp or otherwise. In a construction contract when building a tollroad or energy plant or something, they dont worry about the scientists. What is the return on investment and risk. Also with research and development, they understand the rate of return, the risk and how long it is going to be. When you are mixing it and trying to bring them together, that is really hard. I guess that its time for me to stop. [laughter] the big thing i would have is, think about what your expectations are, but also think of the other side, what they are looking to get out of this. I do not think that is done necessarily in all of the sectors. Public good and science are important but maybe we look at ways to deal with it in a ppp environment if you really want that to work. Karen that sounds right. When it first started studying Public Private partnerships, we went to fundamental industries and they are too different from space. You do not have the Science Mission behind it. How do you quantify that . How do you integrate that into a partnership . The closest comparison i had was the pharmaceutical industry in which there is a science element. But i want to hear from the other panelists. Jen . Would you like to try men . Jen which part . Karen Publicprivate Partnerships and the challenges moving forward. How do you adapt and make it work for a Space Mission . Jen i look at it more broadly than just a specific divination and more about commercial partnerships and integration. I will caveat that i think contractor, Space Systems commands are not necessarily spots. We have a number of programs of record that provide capabilities, but there is the vendor lock. They have traditionally gone to Large Companies that are incumbent. What the general has started with the leadership of the kernel is the commercial space office. Theres a number of entities underneath that office to try to help companies from the very low trl stages all the way through ready to sell service. If you are looking for information on how to navigate space force acquisition, or how to get enough cl information you would go to the front door. That office is standing up a website to make the Response Time faster and to get more information out there. As Companies Start to grow, you might need coinvestments to help move the technology along. Space force, which is a part of but their foot is under the consul office. We will lead companies that direction. They might have venture capital. There are programs where we can have matching funds. As you move further along, we are going to have entities who work with our Space Systems Integration Office to do thoughtful, deliberate integration into our National Security space architecture. One of the things they are trying to do is to get a commercial Program Element line in the budget so that we can show industry we are serious about this. We really do want to get contracts out there, then work to get money and contracts to implement some of this with integration. How do we take these technologies come integrate it into our system, tested in an environment and start training our folks so that it becomes part of the whole ecosystem. We are trying to get past some of these barriers we have with vendor lock. Karen that is a good point. Chris, from a risk perspective as we look at p3 entities approaches with government contractors, what are the things that you look for . Chris we come into the equation late into the game. The insurance we provide starts typically at launch, or prelaunch. So by then, the program is pretty well established, generally. As opposed to a traditional ppp, i look at the commercial free flyer, the commercial space stations. You have four companies trying to put together proposals for that and plan to build them. That is a lot of work. That is a tremendous expense. One of the insurance aspects of that is you have these very large structures, or very large space stations, and you were launching them on a falcon heavy, vulcan, or what have you, that is a lot of risk to have in one place. There isnt enough capital in the marketplace today to take that much risk. The market does not have the appetite. That is one of the issues that we see with risk. We are agnostic to the contract vehicle. Whether it is or what have you. We are fairly agnostic to that. We respond to the risk we are presented. We respond to the technical and financial exposure we are presented with. I would say that commercial free flyers are probably the best current example. Although, we were just talking before lunch about the commercial augmentation space reserve. There are elements of that that are public and private. There are the risks to the operators which exist for operators today who are providing commercial services to the government. They can be seen as legitimate targets i our adversaries. I think the whole concept and i look forward to working on this, is interesting because there are much broader implications. We have the Civil Reserve Air fleet which has been around for decades, which is an analog, but there are inferences. We look at the risk we are presented with. Karen the one take away here is that it is complex. There is a lot of complexity in terms of financial terms and insurance terms and technical choices we make. In a previous panel, there was a lot of discussion around metrics. A lot of discussion around typology. How can we name these things so we know it we are looking at . That increases transparency. You know what you are dealing with end to end. In some ways, that seems to be lacking. Before we move onto the next question about earlystage commercial ventures, do you think that would be helpful . The tricks and typology and some good definitional terms so you have the government, private sector partners, investors and insurers understand what is at play. Tom yes. This starts with understanding what everybodys motivations are and what they need out of a partnership. You need metrics. That is a key part. What are people trying to get out of it . How do you define success . There are groups that jens, she describes this end to end singing about things about how you engage with companies and what does success look like for them and that is what we need to see more of. How do you get down the path of something that is meaningful and it is not just kind of innovation theater where you are pretending to engage into partnerships but it does not lead where you want it to go. Karen do you think that would help transparency . Tom sure. Karen very good. Jen i think part of the problem too, we think in budgets. We think a two year cycles. That is too long a timeline for publicly traded companies and startups. Revenues slip per quarter. They feel it right away. So, i think there is some vernacular and cultural differences that we need to start to work with each other and at least give better expectations to these companies. Absolutely. I view you as a sherpa. For those crossing the valley of death. [laughter] jen lots of pressure. Karen theres a lot of cadavers out there. [laughter] karen it is an interesting point and it is interesting in how do these companies plug into the ecosystem. I am interviewing some startups now and they are frustrated with exactly what you said. Their schedules are urgent. They will die on the vine unless they get funding immediately, or soon. They cant deal with long schedules. I will start by asking, what cultural changes need to take place to help guide them to the other side . Jen part of it is helping the Program Offices and entities understand that time matters in these situations. Some of it is that there is a culture of fear of risk. It is difficult because leadership do not get rewarded for taking risk, but get severely punished if anything goes wrong. So, we need to put not only metrics in place, but incentivize risktakers. We need to do a better job of showing industry that we are serious. It is picking up the phone, taking the call, building solid relationships. We are trying to formalize a relationship with others out there giving White Glove Service so that we can strengthen that relationship. And then on the side that gets them to prototype and demo, we are there to catch them and put them in to these programs. Right now, the way we are trying to do that is through some type of Program Element line and getting some funding so we can run a number of id iqs. Karen good. So, as these Small Companies come into the office and engage with you, a comment i got from someone who has been involved in the process said it is kind of like aya soccer where everyone walks away with a medal. For fairness. Do you think there needs to be more focus on the front end to help with the ones that really count . Jen absolutely. I have been vocal publicly about stopping the spray and pray. Take better, larger bets on companies you think of a real chance. That means you have to do more Due Diligence. Not just do diligence on the trl level it is really based on the management team. So, it is having a different view of how we view risk. But if you duty Due Diligence and partner with entities who also have a team doing that, give larger bets. I think the 10 caps have done a good job. From cradletograve, if they find a quality investment, they support it. We need to do that kind of championship inside the u. S. Space force. Karen absolutely. Tom i am a lawyer. I see a lot of the park and leadership of making things easier, but then you enter into the contract vehicle, whatever that is, and you are dealing with contract managers, contract officers, structures that make it really hard for Smaller Companies to fit in. I do not know if diane is still here, but she was saying you could allocate the risk in these contract vehicles, that is hard to do. Youve got that issue to deal with for Smaller Companies, and international companies, for them how to figure out how to do the buy american act and satisfy requirements, they do not have the bandwidth. They are not big multinational corporations. There is a real legal, regulatory and contractual impediment even if everybody at Senior Management is there. It is still hard to do. I know that is a bigger conversation, but i did not want that to pass. Karen on the legal side, tell me a little about the intellectual property. How well are they managing that as they crawl through the valley of death and get to the other side . Are they able to protect it and how are they working to make sure the government has they need, get some of their critical ip is protected, which is a big fear in silicon valley, that they are giving away too much to government. Kevin from my experience, they are very mindful of trying to protect it, but they are also mindful that a lot of aspects in this sector, the government is the biggest customer, so they have to balance what they let go versus what they dont in how they protect it because they need the revenue. So, there is a back and forth. It is really hard with some of the new technologies. I was negotiating a contract with a company that had developed a platform, but was also developing algorithms that the customer was buying, but there were also trying to get intellectual Property Rights in the platform itself. The algorithm had been developed with private expense. Trying to figure out how to do with that in a contract was hard. I dont blame the other side because they are trying to do line so weve got weve got people working with contract issues. Dont get me started on the definition of technical data. It doesnt make any sense to me. Those are the types of things that are hard to work through. Companies, defense contractors have a bunch of lawyers. Smaller companies dont. Their lawyer may not be an ip lawyer. They may be a space lawyer. It is a complex issue. Tom on the venture side, there are more firms bringing up dual use. There is a growing group of venture firms out there doing more. Not just commercial. I think it is a good sign. They are still sensitive to ip questions, and it does not change the timing. If you fund something thinking you were putting this much money in that it is going to take this long to hit milestones and at the end of a series of milestones, hopefully something will good. Overly something good will happen. If you are off by a couple of months, that changes the way the venture is valued and how these guys support it. It is all very tightly wound. Karen thank you. I want to move back to risk. The climate right now between actually, the climate. Supply chain issues, inflation, which we have teamed a little bit in the u. S. In the u. K. It is. 5 . 8. 5 . There is a lot of risk. I am looking around at the war in ukraine. There is a lot going on. There is a lot of risk. The notion of larger government procurement. How do you ensure, during a time of crisis . I would like chris to address this, war insurance. If we are going to gauge in the commercial sector in this type of climate, what do we need . Kevin it is interesting because Insurance Companies who ensure everything from automobiles to people, homes to rockets. You name it. They are facing these existential risks. Geopolitics climate change, cyber, all sorts of existential risks that are threatening to have a huge impact on the Financial Services district. It is hard in our business we are a tiny part of the business. It is difficult for us because our line of business is very volatile. Results can be very good or very bad. It can all rest on a single failure. Insurance do not like volatility. Especially in times facing existential risk. They want to see nice, smooth earnings quarter to quarter. We dont exactly deliver that to them. That is ok because we do take all of the technical risk for space program. It does not matter if it is internal to the vehicle or external. We do exclude war, terrorism, cyber. But we have been talking about that because we recognize that that could be on the horizon. There could be conflict in space. Serious conflict in space. That may mean that we have a lot of bigger problems to deal with. But i think our clients are going to wake up and realize that they may be did not appreciate the scale of those risks. I have made a point in the last several weeks of asking the risk managers, the people in these companies who typically work for the treasurer, do you see war in space as a risk that you feel you want to address with insurance . Because, we exclude it from our policies. Should we develop a product . In talking with these companies, they are not interested. They dont see kinetic weapons or serious adversarial action as a real threat, something they want to address. Maybe they are more concerned with their ground infrastructure. They may have an earth station in Eastern Europe and they are worried about the russians taking that out. They are worried about cyber. Cyber insurance is important to understand that Cyber Insurance generally isnt for physical damage to an object due to a cyber act. It is really for things like data breach, loss of income. As an insurer, i am trying to figure out what my clients want. But my clients are telling me, no, we are not worried about war in space. That is a really long way of answering the question, but we are still working on it because we want to be ready when, inevitably, the adversarial action happens. Our clients are going to be running to us, asking us to take that exclusion to the policy. And we are going to say, ok. Karen i dont know how you sleep at night. [laughter] karen back to a phrase, loss of income. I have heard somewhere that base insurers for a government contract cannot necessarily ensure the asset, but you can ensure the revenue stream. Is that a good workaround . We typically do ensure the asset. Typically for a satellite, lets say sas was launching a satellite and they pay 130 million for the satellite, 100 million for the launch, capitalized interest, they could have a 300 million satellite on top of the rocket. If the rocket fails with the satellite fails, we pay for that loss of capability. Whether it is total or partial. Because geostationary satellites , there are a lot of them up there and there is a lot of capacity, most of the geo satellite operators do not buy Business Interruption coverage. Loss of revenue, extra expenses. There are enough satellites that they can typically get back up and running and they also have diverse networks. If they are broadcasting the super bowl the do not they do not just with over one satellite. Business interruption insurance is something we do sell to some small networks, radio and tv networks. Generally we are insuring the asset. The replacement cost of the satellite. Karen some of the differences are National Security space launch. These Mission Insurance processes to ensure the capability of the war fighter rather than ensuring the asset or the revenue stream. Jen we insure the u. S. Government does not buy insurance because if it were a claim where we could write a check, it would go to the treasury to go back into the bucket and have to be reappropriated and it can take many years. Would we do is we encourage the programs and theds to push financial risk back onto the contractors. Contractors dont like it, but they can buy insurance for it. That way it mitigates the exposure to the taxpayer. It gives us more business. It provides a strong link between us and the contractors. Karen thank you. Want to check to see if we have any questions from the audience. We can continue talking. Ok. Another way to address risk and address a volatile Business Climate is mergers and consolidation. I want you to briefly address, starting with tom, on m and a activity in the industry. Do you think we will see a new wave of m a frenzy . Tom yes, i would say guess in the last three years. We will see more consolidation. Some companies are have legitimate assets apart are not fully executed on the business side. There may be mergers of similar types of companies. I think we will see more of that in the next 12 months. Karen from a legal perspective, where are the trip liars for mn dave consolidation . M a consolidation . Creating this mega company that can satisfy customers with all of the sensor types. Are the defense contractors rolling out particular companies trying to fit into what they are trying to do . It is a Company Buying assets to plug into what they are trying to do or is it a private equity firm . There is a lot of different ways it could come. I do not think any of those have unique space capabilities. Private equity firm buying a bunch of companies is different than a defense company. In terms of how you structure it and what the risks are. That will be interesting to me. For some of these Smaller Companies, their prices are such that nontraditional companies could see if they could use it for things. Tom it depends on the company. If they still believe, it will be harder to talk them into doing these kinds of deals. At some point they will have to do something. You make a good point about the private equity firms, we are seeing many more of those now. We are seeing those folks creep into it. They are part of the ecosystem now. Karen as we think about increasing dependence on the government, consolidation, too big to fail. Where will we hit that, it is not like we are close to where we were 15 years ago with the big primes controlling the space sector. Do you think we need to watch for that . Too much industry consolidation, dependence on government customers on fewer companies, and how do we watch to ensure, through stress testing, that the government is in a safe place . Jen some of that ownership of the lifecycle happened organically. If you look at spacex, they have done minimal act decisions. Minimal acquisitions. It was not an m a consolidation. What we have seen this year, even last week, these unicorn upandcoming companies that have a lot of cash on the Balance Sheet being able to buy impressive startups without that have a smaller valuation. I want to watch these companies, because are those the new primes . Will they replace the others . I do not know, i dont think the consolidation is truly happening because of mn day. Because of m a. Karen so you view it in a healthy way. Jen i think so, there is a number of reasons you do it. You have a Great Technology and a terrible Balance Sheet, i want the strength of someone elses Balance Sheet. Another one is, i have a Great Technology, but my customer need systems. It depends why they are being bought. There is not a blanket answer for it. Two questions that i think were related. One is kevin mentioned innovation theater. What is the danger proposed by Government Agencies engaging in that. At the same time there was another question relative to the question of demand signals from the government. The demand signal is easy for government because it can be a single dutch signal with nonappropriation items it can be a signal with nonappropriation items. Tom innovation theater basically i am saying there are pockets of the government that want to do innovation and there are programs to do that. They are not always well defined terms of what they want to accomplish, it is more about the show of doing innovation, it was in reference to the metrics. To avoid having a show, you need to define what you are trying to accomplish and what are the milestones. That is something where the theater comment. What was the other one . Demand signal. I do not think rhetoric from the white house or anywhere else does the job. It helps paint the picture. But it has to be more specific on if things play out the way the commercial sector hopes, it is not like you are guaranteed to get a contract. If it happens this way, we foresee using this market to do these things. You cannot get that specific, but it has to be more specific than rhetoric from the white house. And a related question, the transaction cost and Specialized Knowledge needed. We might also ive 90 away. Cybersecurity. Dealing with official use only information. Cybersecurity audit necessary for the Company Maybe hundreds of thousands of dollars. Is there any policy that deal with leveling the Playing Field for Smaller Companies . We seem to have a process that is biased in favor of the larger ones or midsized ones. If you are smaller, have problems working quarter by quarter, but getting qualified, making sure your requirements are there. There is a is there a minimum level to be at before you can play . If somebody comes in that is too small, do you say, come back when you are older . What might be done on the investment side and the government side to deal with these scale discrimination effects that happen. I would say on number of transaction authorities, those are not far contracts, they have some flexibility. Diu does a great job of identifying promising companies. And helping them through the contracting process. Helping them get how do you deal with that is one area where i see that. I send them over to bucky. The otas do not require the same amount of cash investing systems. 15 years ago, a Senior Aerospace person ask a question at a conference. A commercial operators do not need insurance because they buy insurance. You brought up the Mission Insurance. Jen we have had this debate a few times over the years. Do you want to kick it off . [laughter] happy to. We look very deeply into every risk we take. We analyze the technical aspects, contractual aspects, you name it. But we work in a commercial world where angus where the objective is to generate profit, protect the war fighter. If you are protecting the war fighter, you have different requirements. Much more stringent, just different requirements. In the commercial world, we expected there to be failures. If there were not failures, i would not have a job. Failures are inevitable. We just do not want we want to walk in with our eyes open when we analyze risks. The work that aerospace does for their clients is useful and important and admirable. We do not we respond to the technical risk we are presented with. We do not say do it this way, do it that way. We will respond to the technical risk, we will price it based on our models and experience, and we will write a contract that way. I will hand it over to jen now, i think i teed it up for you. [laughter] jen i dont want to speak for aerospace, but i am going to speak for aerospace. There were three catastrophic titan failures. He had to get the ship going in the right direction again. I believe it was up to 3000 requirements. Under steves leadership, he has worked with his team at aerospace to get after recurring engineering. We have launch vehicles that have flown over 100 times. You have flight history. Aerospace and the space force were part of the data. They are looking at ways to leverage flight history, automation and less on the pedigree review so you can get that amount of Mission Assurance , risk reduction. While still finding an optimized process. Even though we assure, we are not worried about revenue, are worried about our war fighters but you have to do it in a smart way. The world has changed a lot. Aerospace is trying to lead the way on up my zinc the assets. Lead the way on optimizing the process. Karen it is an interesting time right now. We heard earlier about how we need to out innovate, out entrepreneur china. This is critical, bringing innovation into the space sector is critical. The dream is to promote t echnicrats and to harness new information. New innovation. Hopefully we will out innovate them. Thank you for your time. [applause] jeannie is going to tell us what this means. Jamie is going to tell us what all this means. Ladies and gentlemen. Thank you all for coming out, and thank you especially to our partners at Fort Washington Space Policy Institute for helping to put this together. I think this is a Space Community event, so it was appropriate that jen had acronyms in the talk she gave. [laughter] what i would like to leave you with is her dichotomy between fomo and sobs. [laughter] we are operating in a world where change is occurring rapidly. Where the fear of missing out israel and the consequences for missing out on opportunity are real. I hope those of you that came today or watched online came because of fear of missing out and you are not leaving. [laughter] hopefully you learned a few things. I certainly did. If we are looking at Publicprivate Partnership, and risk sharing, the point that we heard very loud and clear in the morning session is that creativity in addressing solutions founded on real thoughtfulness about relative interests and motivations and real analysis about how those pieces fit together is a much better recipe for success in any particular arrangement, then is signing onto the flavor of the moment, or getting on board the hype train or innovation theater with the things you think will get your program through an approval cycle. I view todays conversation about the past and the future as fundamentally giving us signposts. Along a path that is not actually well tracks. The space world is changing rapidly. And we are in an environment where, if you define our set of possible solutions as things that are technically feasible, economically viable, and policy acceptable, all three of those are changing and they are changing consciously and accidentally. That path that might have looked like a good way from point a to point e, point b may no longer be the right path because core assumptions have shifted. We have learned things about those assumptions and how to think creatively. We have also had the opportunity to hear from jim bridenstine. We heard about how some of those arrangements looked from his perspective. We heard from industry participants who said leas do not give me a 400 page statement of requirements that is a traditional procurement by another name. Well, may be part of the solution here is to recognize that we are not talking about a binary switch between traditional procurement and other transaction or Publicprivate Partnership or arrangement. Rather they multidimensional eight multidimensional spectrum of choices we have to make in order to have a solution that is fit for purpose. My hope is we got more insight after today into how to craft those solutions that are fit for purpose. That people are left with a sense of dialogue and openness from folks in the government, the legal community, investment, and the industry. That we are all committed to seizing the enthusiasm and innovation in nontraditional sectors in order to achieve competitive advantage. That is the goal, and we are hopefully making progress. Thank you to all of our panelists. Thank you to our cspan folks who gave us a good video feed that we will post to the world for people who were stymied by the i. T. Challenges. Glad everybody could join and looking forward to seeing you in the future. [applause] [captioning performed by the national captioning institute, which is responsible for its caption content and accuracy. Visit ncicap. Org] [captions Copyright National cable satellite corp. 2023] this evening, david gergen, advisor to president nixon, ford, reagan and clinton talks about the state of the nation. Watch the conversation live at 8 00 p. M. Eastern on cspan. You can also watch on our free mobile video cap cspan now or online at cspan. Org. This fall, what cspans new series, books that shaped america. We embark on a captivating journey in partnership with the library of congress which first created a book that shaped america, to export key works of literature from american history. The 10 books featured have provoked thought, led to significant changes and are still talked about today. Hear from featured run out experts who will shed light on the profound impact of iconic works and virtual journeys to Significant Locations intricately tied to these authors and their books. Among our featured books, common sense by thomas payne, Huckleberry Finn by mark twain, their eyes were watching god, by zora neale hurston, and weak to choose,. Watch our 10 part series, books that shaped america, started monday, september 18 at 9 00 p. M. Eastern on cspan, cspan now, or online at cspan at work. Cspan is your unfiltered view of government. 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