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Defense Satellite Programs: Lessons Learned from Navigating the Storm

The strategy of the new Presidential administration's approach to military funding has been revealed, in part, by the funding that has been approved for the Department of Defense (DoD) in the recent House-passed stimulus bill. Green energy Research, Development, Test & Evaluation (RDT&E) programs and Operations & Maintenance (O&M) programs have been granted $350 million and $4.5 billion, respectively, to help stimulate sustainable military technologies, provide for baseline costs, and support organizational redesign efforts such as the Department of the Army Base Re-alignment and Closure (BRAC) initiatives. The Senate's version of the bill, which will likely be voted on the week of February 2, includes Defense-wide RDT&E funds and an allottment of O&M funds comparable to the House bill.

Although such funding will be received warmly, many offerors are wondering where the "meat" of the funding is for new and struggling technology programs. Support of such specified R&D funding becomes especially critical for satellite programs, many of which are experiencing greater and greater bandwidth usage and greater projected demand of such usage; these current and projected needs cannot, in many of the Services estimations, be adequately met with the current systems. However, new satellite technologies can rely heavily on such R&D funding. A good example of this struggle is the Advanced Extremely High Frequency (AEHF) satellite program, which is meant to replace the DoD's current Milstar system. According to a March 2008 GAO report (GAO-08-467SP), R&D funding for the project accounted for $1,078.9 million of the total funding amount of $1,172.9, or 92%.

So what strategies should offerors employ to win business when they help provide cutting-edge data communications solutions?

The first, and tactical, strategy is to aim at sustainment and replacement of existing satellite communications systems. One particular program to watch is the Communication and Transmission Systems program, or (CTS) (GovWin Opportunity ID: 45253). According to the Deputy Project Manager, Defense Communications and Army Systems (PM DCATS), Mr. Art Reiff, funding for this particular effort is a steady target. Mr. Art explained, "This [CTS] is not a mission requirement, but rather a purchase to meet the majority of the organization's needs." Therefore, he states, the program is "predominantly funded by OPA and OMA funding, very little from R&D." OPA (Other Procurement, Army) funding and OMA (Operations & Maintenance, Army) funding are separate from the traditional RDT&E category of funding, and maintain a somewhat steadier flow of resources. Adding to CTS' attractiveness for offerors is the fact that the procurement supports a wide variety of existing systems and has a projected funding ceiling of $30 billion on all of the awarded contracts. According to the PM, these will likely be awarded by FY10.

The second, strategic strategy is to prepare for those acquisitions which are absolutely essential to the mission of the warfighter. Falling in this category is the much-maligned Transformational Satellite Communications System (TSAT) acquisition (GovWin Opportunity ID: 53286). The program has, admittedly, been off to a rocky start: there are three sequential phases to launching the system, and although the first, the Mission Operations System (TMOS) is underway, the second phase of Development and Production (D&P) and third phase of Systems Engineering and Integration (SE&I) are on hold due a restructuring of the requirements strategy itself. Despite initial concerns that AEHF would be supplanted as a stopgap solution in the event of a TSAT acquisition collapse, military officials at the Air Force remain adamant that this requirement remains more critical than ever to replace the Wideband Gap Satellites (WGS) and to assist the warfighter in receiving reliable, protected data. In a January 17, 2009 Air Force Times article, Gary Payton, Deputy Undersecretary of the Air Force Space Programs, stated: "The uniformed warfighter is adamant about getting TSAT," he said. "I'm confident that commitment and support of TSAT will continue."

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