Streamlined satellite acquisition advances, but challenges remain
- By Nicole Grim
- Aug 14, 2013
Editor's note: This piece was updated to include comments from DISA.
The Defense Department is increasingly meeting its growing need for satellite bandwidth by leveraging commercial capacity to fill the gaps. In 2009, the Future Commercial Satellite Communications Services Acquisition (FCSA) was launched to address an inefficient procurement process by expanding industry competition and driving down commercial prices. While FCSA has in many ways delivered on its promises, the acquisition initiative has been tested by budget sequestration, growing demand for bandwidth to support mobile operations and emerging other requirements as DOD pivots toward Asia.
Commercial satellite services, or COMSATCOM, offer a less expensive and timelier supplement to traditional MILSAT services, which on average take at least five years to launch versus as little as three for commercial services. According to a DOD COMSATCOM annual usage report, fiscal 2010 was the first time the average Defense Information Systems Network Satellite Transmission Services- Global (DSTS-G) price for leased bandwidth exceeded the global industry average, solidifying the need to move away from the DSTS-G procurement process. FCSA was designed to address this shortfall by increasing competition to reduce costs.
"The greater number of contractors under FCSA has resulted in increased competition for COMSATCOM services which helps to restrain COMSATCOM pricing, and the use of GSA Schedules allows for the introduction of new COMSATCOM technologies and new contractors during the FCSA Period of Performance," said Navy Capt. Jon Kennedy, chief of DISA's COMSATCOM Center.
FCSA is divided into three purchasing channels under federal procurement rules designated GAO IT Schedule 70: transponded capacity, subscription services and custom satellite solutions. This comprehensive approach encompasses both fixed and mobile satellite services while also providing space for end users to define their own requirements using bandwidth, teleport and terminal access, network management and engineering services.
While DSTS-G only supported three vendors, there are more than ten suppliers for each FCSA component. "From the perspective of competition [DOD planners] achieved their objectives," said Skot Butler, director of strategic initiatives at Intelsat General. "They carved out different lanes so different types of providers could participate in different ways."
FCSA also seeks to reduce costs by eliminating burdensome layers of bureaucracy that have created difficulties for end users. "Under FCSA, [DOD] can go directly to those who own and operate the satellites without having to go to a middleman, and so they've eliminated some cost and a level of management which was unnecessary," said Andrew Ruszkowski, vice president of global sales and marketing at XTAR, a commercial satellite provider focusing on X-band services.
While FCSA has delivered on its most important objective, delivering cost-effective services, it hasn't yet met all DOD requirements. For instance, providing secure services remains a major hurdle for commercial providers. "If [DOD] is willing to give on secure requirements in order to get a lower price solution, that's problematic [because] there is not a lot of incentive [for COMSAT operators] to add those features," Intelsat's Butler added. That's especially true for "new security features the DOD might want to see over time, [because] there's no business case if those aren't hard requirements."
While increased competition is yielding positive results, Kennedy said, "the [increased] complexity and duration of source selection activities for many awards [means] the tradeoff is a longer time to award task orders."
Due in large part to transitions from physical to virtual presence in theaters like Afghanistan and a greater push to support mobile warfighters, demand for bandwidth is growing at a rate that will widen the gap between supply and demand. In fiscal 2012, DOD spent $640 million on COMSATCOM services. That figure is expected to grow to as much as $5 billion over the next 15 years, according to a fiscal 2013 Defense Business Board report.
"Demand will certainly outstrip the government-owned supply," predicted Ruszkowski, "so commercial is going to be a part of the equation no matter what."
But commercial providers warned much work needs to be done before FSCA can be declared a success. "There has been no long-term planning around commercial," added Butler. "It's mostly just spot market purchases and not really strategic planning."
The latest challenge faced by FCSA managers is how to address the broader issue of collaboration, or lack thereof, between DOD and commercial SATCOM providers. The failure to effectively collaborate could undermine future sustainability, observers warned. Hence, there needs to be a dialogue among DOD planners and commercial satellite providers that will forge a partnership, allowing commercial platforms to evolve as DOD requirements change.
"There is significant debate on the merits of COMSATCOM versus vs. MILSATCOM and the appropriate mix of each required for DOD," Kennedy said, "DOD has contracted for large amounts of COMSATCOM to support warfighter operations, while also continuing to expand the MILSATCOM constellations." The sixth Wideband Global SATCOM in the DOD constellation was launched on August 7 and is scheduled to be operational by early 2014.
Ultimately, DOD must leverage industry in a way that allows the commercial sector to provide more and better services where and when they are needed.
Nicole Grim is an editorial fellow at Defense Systems. Connect with her on Twitter: @nicole_grim.