Commentary | Changing the Military’s Approach to Commercial Satellite Services

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It’s time to change the way the military purchases commercial satellite services. Our current method of procuring these services is too expensive, lacks strategic foresight, puts our troops at risk and disadvantages the U.S. industrial base.

The Department of Defense (DoD) relies on commercial satellite services to meet the needs of the warfighter, most prominently in the area of communications. Helpfully, there is a robust commercial market for satellite communications, driven in part by high-definition-television-loving people around the globe. The military greatly benefits from leveraging this competitive and innovative market to meet certain warfighter communication needs, rather than wholly relying on government solutions.

Unfortunately, the DoD predominantly leases these commercial satellite communications (COMSATCOM) services in the most inefficient manner possible — through expensive one-year leases and “spot market” purchases. 

According to a recent Air Force white paper on this subject, “[A]fter [the] 9-11 terrorist attacks, DoD’s operations supporting overseas contingency missions triggered a dramatic growth in COMSATCOM. COMSATCOM services were readily available on the spot market, commanding top prices. … After 10 years, the DoD continues to inefficiently buy COMSATCOM services on the spot market.” 

The cost to the taxpayer is significant. In fiscal year 2011, the last year for which numbers are available, the DoD spent over $1 billion to lease COMSATCOM services. For more recent years, the department can’t actually provide numbers, which erodes confidence in its management of a critical capability and a significant resource expenditure. 

According to an analysis from the DoD’s chief information officer and its Defense Information Systems Agency, using higher-capacity, longer-duration leases could result in billions of dollars of savings through 2030 when compared with the current baseline of small-capacity, short-duration leases. Savings generated by common-sense reforms could be reinvested in underfunded modernization programs. 

Aside from overpaying for the services, the lack of a strategic plan has additional consequences and risks for U.S. national security. For instance, in 2012, a combatant commander required commercial satellite services to support operations in his area of responsibility. The only service available to meet the warfighter requirements was from a Chinese company, using a Chinese satellite launched from a Chinese rocket. The military had no other option but to enter into a contract that undermined our military embargo on China and exposed our military to the risk that China may seek to turn off our “eyes and ears” at a time of its choosing. One year later the multimillion-dollar contract was renewed because there were no alternatives. 

Supporting the Chinese industrial base at great cost to the taxpayer, great risk to the U.S. military and lost opportunities for the U.S. industrial base certainly isn’t a “Pivot to the Pacific” strategy I’m going to support. That’s why the fiscal year 2014 National Defense Authorization Act, because of a provision I authored in my House markup, will prohibit such contracts with China and other potential adversaries. 

Lastly, the current method of procurement doesn’t allow U.S. commercial space companies to plan for stable government purchases. There is little to no identification of requirements or commitment beyond the here-and-now. According to one industry leader, “There is no incentive for commercial owner-operators to invest in the capacity the government needs for the future.” The DoD has to partner with industry to be successful.

Multiple acquisition approaches will be required to fully address the warfighter’s needs. To the credit of Air Force Space Command and others in the department, there are earnest and ongoing efforts to fix this problem that won’t require legislation. For instance, the Air Force is currently exploring arrangements to procure, rather than lease, a portion of the available bandwidth on commercial satellites, thereby enabling a longer-term solution at a substantially lower cost. The head of the Air Force Space and Missile Center, Lt. Gen. Ellen Pawlikowski, and her team have been driving change from within the Air Force. These efforts, combined with bipartisan language in my House markup and in the final fiscal year 2014 defense authorization, will continue to drive smarter and more affordable acquisition efforts.   

Significant work remains, and I urge the DoD to ensure strong leadership attention is dedicated to this important issue. My colleagues and I in Congress will continue to work to provide solutions that benefit the warfighter, the taxpayer and the industrial base. We will be working toward further reforms of this system in my fiscal year 2015 markup and through my recently formed “P3 (Public Private Partnerships) Caucus,” which is a bipartisan effort to harness the resources and innovation of the public and private sectors. 

A smarter acquisition program for these services is not just good business sense, it’s a critical imperative that will allow us to stretch scarce defense resources at a time when space is more important and more threatened by America’s adversaries and competitors. 

 

U.S. Rep. Mike D. Rogers (R-Ala.) is chairman of the House Armed Services Strategic Forces Subcommittee.