Space Procurement: 'Commercial' Definition Blurred

A recent report highlights a growing concern regarding the definition of "going commercial" in space procurement. The study, released January 28, indicates that the elastic use of the term "commercial" risks obscuring the actual nature of public agencies' space-related purchases. Both the United States and European nations are increasing their reliance on private space companies, but their approaches and motivations differ significantly.

The United States typically utilizes fixed-price contracts and competition to transfer cost and technical risks to industry. In contrast, European governments often combine commercial language with substantial public oversight, driven by goals of industrial policy, sovereignty, and strategic autonomy. This divergence can lead to mismatched expectations and inefficiencies.

The report categorizes commercial procurement into three types: "Commercial-Lite," where governments retain most risk; "Commercial-Led," involving government support to de-risk development; and "Purely Commercial," where governments buy existing off-the-shelf services. The analysis of European and US programs suggests that many initiatives labeled commercial still involve significant public control or government de-risking, rather than being purely market-driven.