U.S. Commercial Space Policy Guidelines

NSPD-3, February 11, 1991

A fundamental objective guiding United States space activities
has been space leadership, which requires preeminence in key areas
of space activity. In an increasingly competitive international
environment, the U.S. Government encourages the commercial use
and exploitation of space technologies and systems for national
economic benefit. These efforts to encourage commercial activities
must be consistent with national security and foreign policy interests,
international and domestic legal obligations, including U.S. commitments
to stem missile proliferation, and agency mission requirements.

United States space activities are conducted by three separate
and distinct sectors: two U.S. Government sectors the civil
and national security and a non-governmental commercial space
sector. The commercial space sector includes a broad crosssection
of potential providers and users, including both established and
new market participants. There also has been a recent emergence
of State government initiatives related to encouraging commercial
space activities. The commercial space sector is comprised of
at least five market areas, each encompassing both earth and spacebased
activities, with varying degrees of market maturity or potential:

Satellite communications the private development,
manufacture, and operation of communications satellites and marketing
of satellite telecommunications services, including position location
and navigation;

Launch and Vehicle Services the private development,
manufacture, and operation of launch and reentry vehicles, and
the marketing of space transportation services;

Remote Sensing the private development, manufacture,
and operation of remote sensing satellites and the processing
and marketing of remote sensing data;

Materials processing the experimentation with,
and production of, organic and inorganic materials and products
utilizing the space environment; and

Commercial Infrastructure the private development
and provision of spacerelated support facilities, capabilities
and services.

In addition, other marketdriven commercial space sector opportunities
are emerging.

The U.S. Government encourages private investment in, and broader
responsibility for, spacerelated activities that can result in
products and services that meet the needs of government and other
customers in a competitive market. As a matter of policy, the
U.S. Government pursues its commercial space objectives without
the use of direct federal subsidies. A robust commercial space
sector has the potential to generate new technologies, products,
markets, jobs, and other economic benefits for the nation, as
well as indirect benefits for national security.

Commercial space sector activities are characterized by the provision
of products and services such that:

private capital is at risk;

there are existing, or potential, nongovernmental customers
for the activity;

the commercial market ultimately determines the viability
of the activity; and

primary responsibility and management initiative for the activity
resides with the private sector.

Implementing Guidelines

The following implementing guidelines shall serve to provide the
U.S. private sector with a level of stability and predictability
in its dealings with agencies of the U.S. Government. The agencies
will work separately but cooperatively, as appropriate, to develop
specific measures to implement this strategy. U.S. Government
agencies shall, consistent with national security and foreign
policy interests, international and domestic legal obligation
and agency mission requirements, encourage the growth of the U.S.
commercial space sector in accordance with the following guidelines:

U.S. Government agencies shall utilize commercially available
space products and services to the fullest extent feasible. This
policy of encouraging U.S. Government agencies to purchase, and
the private sector to sell, commercial space products and services
has potentially large economic benefits.

A space product or service is "commercially available"
if it is currently offered commercially, or if it could be supplied
commercially in response to a government procurement request.

"Feasible" means that products and services meet
mission requirements in a cost¾effective manner.

"Costeffective" generally means that the commercial
product or service costs no more than governmental development
or directed procurement where such government costs include applicable
government labor and overhead costs, as well as contractor charges
and operations costs.

However, the acquisition of commercial space products and
services shall generally be considered cost-effective if they
are procured competitively using performancebased contracting
techniques. Such contracting techniques give contractors the
freedom and financial incentive to achieve economiesofscale by
combining their government and commercial work as well as increased
productivity through innovation.

U.S. Government agencies shall actively consider, at the earliest
appropriate time, the feasibility of their using commercially
available products and services in agency programs and activities.

U.S. Government agencies shall continue to take appropriate
measures to protect from disclosure any proprietary data which
is shared with the U.S. Government in the acquisition of commercial
space products and services.

U.S. Government agencies shall promote the transfer of U.S.
Governmentdeveloped technology to the private sector.

U.S. Governmentdeveloped unclassified space technology will
be transferred to the U.S. commercial space sector in as timely
a manner as possible and in ways that protect its commercial value.

U.S. Government agencies may undertake cooperative research
and development activities with the private sector, as well as
State and local governments, consistent with policies and funding,
in order to fulfill mission requirements in a manner which encourages
the creation of commercial opportunities.

With respect to technologies generated in the performance
of government contracts, U.S. Government agencies shall obtain
only those rights necessary to meet government needs and mission
requirements, as directed by Executive Order 12591.

U.S. Government agencies may make unused capacity of space
assets, services and infrastructure available for commercial space
sector use.

Private sector use of U.S. Government agency space assets,
services, and infrastructure shall be made available on a reimbursable
basis consistent with OMB circular A25 or appropriate legislation.

U.S. Government agencies may make available to the private
sector those assets which have been determined to be excess to
the requirements of the U.S. Government in accordance with U.S.
law and applicable international treaty obligations. Due regard
shall be given to the economic impact such transfer may have on
the commercial space sector, promoting competition, and the long-term
public interest.

The U.S. Government shall avoid regulating domestic space
activities in a manner that precludes or deters commercial space
sector activities, except to the extent necessary to meet international
and domestic legal obligations, including those of the Missile
Technology control Regime. Accordingly, agencies shall identify,
and propose for revision or elimination, applicable portions of
U.S. laws and regulations that unnecessarily impede commercial
space sector activities.

U.S. Government agencies shall work with the commercial space
sector to promote the establishment of technical standards for
commercial space products and services.

U.S. Government agencies shall enter into appropriate cooperative
agreements to encourage and advance private sector basic research,
development, and operations. Agencies may reduce initial private
sector risk by agreeing to future use of privately supplied space
products and services where appropriate.

"Anchor tenancy" is an example of such an arrangement
whereby U.S. Government agencies can provide initial support to
a venture by contracting for enough of the future product or service
to make the venture viable in the short term. Longterm viability
and growth must come primarily from the sale of the product or
service to customers outside the U.S. Government.

There must be demonstrable U.S. Government mission or program
requirements for the proposed commercial space good or service.
In assessing the U.S. Government's mission or program requirements
for these purposes, the procuring agency may consider consolidating
all anticipatedU.S. Government needs for the particular product
or service, to the maximum extent feasible.

U.S. Government agencies entering into such arrangements may
take action, consistent with current policies and funding availability,
to provide compensation to commercial space providers for future
termination of missions for which the products or services were
required.

The United States will work toward establishment of an international
trading environment that encourages marketoriented competition
by working with its trading partners to:

Establish clear principles for international space markets
that provide an atmosphere favorable to stimulating greater private
investment and market development;

Eliminate direct government subsidies and other unfair practices
that undermine normal market competition among commercial firms;

Eliminate unfair competition by governments for business in
space markets consistent with domestic policies that preclude
or deter U.S. Government competition with commercial space sector
activities.

The U.S. commercial Space policy Guidelines are consistent with
the National Space Policy and the U.S. Commercial Space Launch
Policy which remain fully applicable to activities of the governmental
space sectors and the commercial space sector.

Reporting Requirements

U.S. Government agencies affected by these guidelines are directed
to report by October l, 1991, to the National Space Council on
their activities related to the implementation of these policy
guidelines.