Defense SATCOM Requirements Remain Unclear, Fragmented Buying Habits Persist

The Department of Defense (DOD) uses both military and commercial satellite communications (SATCOM) to meet its global communications requirements. Over time, this blend has been increasingly composed of commercial services. In fiscal year 2011, DOD reportedly spent over $1 billion to lease SATCOM services from commercial providers. Despite existing mandates to help consolidate procurement, DOD components continue to buy SATCOM services independently. The disjointed buying habits are one of several hurdles preventing the Defense Department from achieving better cost efficiency in this area.

Commercial SATCOM has become a significant portion of the DOD SATCOM architecture. The military SATCOM architecture consists of three segments: a protected band, a wideband segment, and a narrowband segment. Commercial SATCOM services fall into two categories – fixed and mobile satellite services – which meet parallel requirements to the wideband and narrowband segments respectively. There is not, however, a commercial counterpart for the protected band.

Mid July 2015, the Government Accountability Office (GAO) released its most recent findings of a review of Defense Satellite Communications. The GAO has completed similar audits of the DOD’s procurement process for SATCOM in the past with some results. Between initial recommendations issued by the Government Accountability Office (GAO) in 2003 and a progress review in 2006, the DOD adopted some strategic sourcing techniques into their contracting approach and explored various procurement options. They also made adjustments to the requirements and provisioning processes to improve responsiveness and aggregate bandwidth. Also during this period, steps were taken to engage with industry on the impact of different contracting approaches.

Among the recent findings of GAO’s review, the DOD’s policy around SATCOM procurements has proved not enforceable. While all of the DOD components are required to buy commercial SATCOM through the Defense Information Systems Agency (DISA), components have continued to buy them independently (sometimes under a misguided belief that they’ll be able to meet their own needs in a more cost effective manner). The DOD’s most recent SATCOM usage report indicates that over 30 percent of commercial SATCOM is bought independently rather than through DISA channels. At the same time, DISA secures pricing for commercial SATCOM that is on average 16 percent lower than what components achieve on their own.

An initial query of the GovWin system yielded a data set of over 800 contracts spanning the last 15 years. Although the contract spending from the Defense Department is delayed, the combined levels of these contracts is obviously only a small fraction of what’s being invested in SATCOM capabilities.

The results from this preliminary search point to several major SATCOM programs worth exploring: the Future Commercial SATCOM Acquisition (both Full and Open as well as the small business set aside), SATCOM II, Portable Satellite Communications Terminals for SPAWAR (SATCOM), and Worldwide Satellite Systems Program (WWSS).

 

While these five programs supported spending as high as $500 million in FY 2011, it’s important to note that the figures include funding for civilian agency requirements. 

Isolating the portion of these programs dedicated to defense, the levels for spending to date (stretching from 2006 to the present) provides yet another view of defense SATCOM contracting habits. Since this program sampling omits spending through agency specific contracts and government-wide acquisition contracts (GWACs) like the General Service Administration’s IT schedule 70, the picture remains far from complete. 

Going through this exercise and seeing reminders of the challenges agencies encounter around financial management, it comes as little surprise that the Defense Department has not been able to determine its own current spending on commercial SATCOM. That knowledge gap presents a major hurdle for future planning. The GAO’s report highlighted the DOD’s plans for studies and pathfinder efforts. None of the planning efforts referenced in the report are expected to be completed or provide guidance before fiscal 2017. Without any anticipated near term guidance or shifts to provide recourse for enforcing procurement mandates, it’s unlikely for these buying patterns to undergo a dramatic improvement. Of course, without an established baseline for SATCOM spending, cost avoidances and efficiency improvements would be rather difficult to measure.