Resource21 Aims High, Falls Hard
Adena Schutzberg

Last October NASA decided not to award a contract based on a single bid made to commercialize the Landsat program. That bid, nearly $600 million, was from Resource21, which offered to provide Landsat-comparable imagery for at least five years. Efforts to change NASA’s mind on its decision failed and Resource21 has since terminated operations.
Resource21, by all accounts I’ve heard, was launched in 1995 specifically to bid on the Landsat continuity contract expected a few years later. Backed by Boeing, a company adept at building satellites, the company was well-seated to deliver on a contract which was basically a satellite manufacture and operations deal. Early promotion of the company, noting backing from BAE SYSTEMS, Farmland Industries, and the Institute for Technology Development, in addition to Boeing, touted the company as serving the agriculture market and looked forward to the Landsat continuity mission.
The company signed on to resell SPOT imagery and partnered with Pixxures for an online agricultural imagery service. I’ve noted in the past how few agriculture-related efforts in imagery seemed to pay off. Pixxures, which currently does not list agriculture among its target markets, recently sold off its Canadian subsidiary. Part of Emerge, once owned by ConAgra, a company tied into agriculture, is now owned by Applanix.
The 2003 Commercial Space Transportation Forecasts reports that Resource21’s proposed satellite would go ahead no matter the outcome of the Landsat Continuity Mission (LCM) decision. The satellite, to be built by Boeing, would host a 10-meter sensor and was expected in orbit by 2006. Boeing had pulled a license for the satellite in 1996, when Resource21 was formed.
In March 2002 Resource21 and
DigitalGlobe were given small awards to refine their respective plans for the final bid for the LCM. DigitalGlobe eventually pulled out of the bidding process citing high risks. That decision could have been taken two ways by Resource21: “Oh good, we are the only bidder!” or “Hmm, I wonder why they are dropping out?” DigitalGlobe has a business savvy reputation that might have been taken as a sign to look carefully at the bid. On the other hand, a smaller outfit like Resource21 might have thought that a quick, young company could outdo an older, larger rival, like DigitalGlobe.
In the end NASA felt the cost of Resource21’s bid was too high, and according to a report in Space News, “amounted to the government shouldering the entire cost of building and operating a privately owned satellite.” Just as a side note, recall that on the military side of things, the National Geospatial- Intelligence Agency hands out $500 million contracts to companies such as Space Imaging and DigitalGlobe with some regularity.
Resource21 felt it was offering a good deal. Its satellite would cost $711 million to build, launch, and run for five years. The company felt it was offering the government a discount of up to $145 million. (I’m not sure of the source of that figure which is quoted in Space News.) Landsat 7, in comparison, cost about $700 million to get into orbit and $20 million per year to operate. Resource21 hoped to sell $1.37 billion in commercial sales during the first five years of the satellite’s operation. NASA didn’t find the bid a fair partnership.
When I look over this story it sounds like a classic case of “putting all your eggs in one basket.” It can be argued Resource21 selected the wrong basket. While Space Imaging, DigitalGlobe, and ORBIMAGE have taken big risks putting commercial satellites in orbit, I for one always understood they had a “pretty sure thing” in support from the U.S. defense arena. That support has only increased as the White House issued statements about support of commercial imagery, and the country’s role in world affairs changed after 9/11. Despite scientific interest in worldwide and regional environmental issues, there’s been little “buzz” about satellite technology to serve related disciplines. The LCM website contains this statement, from September 26, 2003: “NASA is considering other options for ensuring the continuity of valuable Landsat data.”

About the Author
Adena Schutzberg is editor of EOM and GIS Monitor, a weekly e-mail newsletter from GITC America, Inc. She runs ABS Consulting Group, Inc. in Somerville, Massachusetts.

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