COLORADO SPRINGS – U.S. aerospace companies are losing business to global competitors because a congressional ruling last year designed to prevent sensitive technology from falling into the wrong hands has slowed contracts processing down to a crawl.

"This issue is becoming a national scandal," Don Vanlandingham, chief executive officer of Ball Aerospace and Technology said Tuesday, April 4 at the 2000 National Space Symposium. SPACE.com is the official web sponsor of the event.

The dispute is the latest battle in a long-running war between defenders of national security and an industry fighting to stay the course with fast-paced technological advances.

Members of the aerospace industry pointed out that they have lost business to their European competitors since Congress transferred authority over export licensing from the Commerce Department to the State Department a year ago.

Congress acted on concerns that two U.S. satellite companies may have transferred sensitive satellite and missile technology to China. This shift in control means that all technology deemed sensitive by the United States government requires licenses by the State Department, which has a reputation for taking a more hawkish position on the transfer of technology than the Commerce Department.

"We realize that [the State Department] is processing 10 times the data than they were a few years ago, but we are at their mercy," said Herb Satterlee, CEO of remote-sensing satellite company EarthWatch.

EarthWatch applied for a license for its next generation of satellites in December 1998 and hasn’t yet been granted one to begin building these birds.

"If we are late on our next generation, we’re in trouble," Satterlee said. "The first thing Wall Street asks us is ‘Do you have your licenses?’ They won’t give us the money we need if we don’t," he said.

Government officials at the conference defended their position.

"Ninety-nine point nine percent of companies do what is right," said Col. Dave Garner at the Defense Threat Reduction Agency, an arm of the Department of Defense. "But there is a small percentage that aren’t so good for national security."

Garner said that the government realizes the problems with delaying the granting of licenses and is trying to address industry concerns. "I can’t change the law, but I can try to make the process easier," he said.

The European aerospace industry also weighed in on the export licensing rules.

"The restrictions make it more difficult for European governments and companies to understand the new rules of the game," said Serge Plattard, director of international relations for the French National Space Agency (CNES). He said European countries are concerned over the impact of such future projects as the International Space Station and NASA’s Mars Sample Return Mission.

"We will need information transparency and more fluid exchanges of data [for those projects]," he said.

Meanwhile, the industry continues to bring their concerns to Congress.

Aerospace Industry Association President John Douglas told the Senate Armed Services Committee a few weeks ago that U.S. satellite sales have dropped 40 percent since the transfer of regulatory control to the State Department, without any sales impact on China.

"Sixteen nations have written to the secretary of state saying ‘We are no longer going to buy any satellite parts at all from the United States because we cannot get the parts at all from the United States in time," Douglas told the Senate panel.

Last week, the government responded with a report calling for a more-defined understanding of these ambiguous export rules.

Released by the inspectors general for the Commerce, Defense, Energy and State Departments, the report also pointed out a loophole in current export licensing law that needs to be plugged. The group of agencies said rules exempting so-called fundamental research from licensing are too ambiguous and need to be addressed.