The National Defense Authorization Act currently working its way through the U.S. Congress contains language dealing with use by the Department of Defense (DoD) of satellites owned or operated by foreign countries including China, North Korea and Iran. The concern expressed by the Congress has to do with whether or not it is prudent to lease satellite bandwidth on platforms where, in the event there is a conflict or even a diplomatic spat between the United States and the country that owns or operates the satellite, the service might be cut off.
Although there are a number of important details that would need to be worked out in order to implement such language, the general concern is legitimate, and it is likely that the restrictions in some form will be part of the bill when and if it is enacted. Thoughtful members of Congress and the DoD are reasonably asking, “How did we get in this situation?”
The Defense Department has some unique advantages because of its investments in space and space-based capabilities, and while it may be true that investments by others including the Chinese are narrowing the gap, the Unites States is still far ahead of everyone else. However, as our reliance on space-based capabilities has steadily grown, our acquisition practices have not kept pace, and at the same time our overall budgets have come under increasing pressure. As the Congress has pointed out, we are now in a situation where we may be vulnerable because we are depending on potential adversaries to provide capabilities we need to execute our national priorities, and that is indeed bad news.
But there is also good news: We know how to fix this problem if we choose to do so.
The current DoD approach to buying commercial satellite capacity is to go out to vendors when the government has a need and purchase out of the vendors’ existing inventory. By waiting until the last minute, the Pentagon reduces the risk that it might buy the wrong thing. However, the downside of this approach is that the DoD must pick from a limited menu of available bandwidth.
Since most DoD demand over the past 10 years was to support operations in the Middle East and Southwest Asia, in most cases there was an adequate inventory of suitable and available capacity because there are a great many satellites that could serve the area even though they were really built to serve European customers. But now that its needs are growing in Africa and in the Pacific, the Pentagon is finding it has more limited choices, and that’s the answer to the question, “How did we get here?”
Furthermore, if we don’t like the current situation, we will like the future situation even less, because demand growth is outpacing supply growth in key areas of the globe such as the broader Asia-Pacific region.
The key to addressing this challenge is to think about it in a new way. Right now the Congress is engaged in a process that might limit the risk of allowing key communications to be vulnerable to disruption, but it does not address the question of how the DoD will get enough of the more reliable communication capacity it needs. Unfortunately, to the extent others such as the DoD are seeking answers to that question, they are generally looking in the wrong direction. Specifically, the government is seeking ways to fine-tune its contracting processes when the processes themselves are the problem.
Right now, the nation is trying to buy access to global communications infrastructure the same way it buys janitorial services. These contracting arrangements actually work well when used for their intended purpose, but trying to make them work for satellite bandwidth has not and will not work because they are simply the wrong tools for the job.
Commercial satellites cost hundreds of millions of dollars each, and unless the U.S. government gives them a reason to do otherwise, the companies that buy and operate them will continue to build spacecraft to serve their large commercial customers, and the DoD will continue to have to choose from a menu of leftovers. There are forward thinkers in government who recognize and are trying to address this issue, but there are equal and opposite forces resisting change for a variety of reasons.
Some think that we should not change the way the government buys services, and they may well be correct; so as long as we think about bandwidth the same way we think about grounds maintenance, change will be very hard to enact. Others believe we should continue to buy bandwidth the way we do today precisely because it does not work very well, and that reality opens the door for them to sell the government its own satellites. And still others think that all we need to do is prohibit the Pentagon from doing business with parties it doesn’t trust and the system will somehow automatically compensate for that reduction in available supply.
But the answer is really right in front of us: Commercial satellite operators are entirely rational and predictable. If they have reason to expect they will get an adequate rate of return by investing in things the Pentagon cares about, they will do that. So all that has to happen is for DoD to tell them what kind of and how much capacity they think they will need and to commit to buying it, and industry will assume all of the investment obligation as well as the technical risk to provide it.
An added benefit to the government is that industry is not constrained by many of the practices and procedures government procurement officials have to put up with, so they routinely deliver their capabilities on time and on cost, something that government officials rarely achieve because of the acquisition system in which they must operate.
If the Congress and the nation don’t like being dependent upon the Chinese to provide satellite capacity, there is a simple fix: Give the Pentagon the authority it needs to negotiate better arrangements with providers it trusts to be there when needed. This does not require dismantling our services acquisition model, and it does not endanger the ability of Congress or the White House to provide guidance and oversight. It is simply smart management in an era of austere budgets and escalating risk.
Retired U.S. Air Force Brig. Gen. Tip Osterthaler is president and chief executive of SES Government Solutions.
