U.S. To Consolidate, Modify Bandwidth Buying Programs

WASHINGTON
— The
U.S.
government will consolidate its two primary contracting arrangements for commercial satellite communications capacity into one new purchasing vehicle that will enable agencies to buy bandwidth directly from satellite operators starting in 2011, government officials said Aug. 6.

The Future Comsatcom Services Acquisition (FCSA) contracting vehicle will serve both military and civil government needs and could be worth as much as $5 billion over 10 years, Karl Krumbholz, director of network services at the General Services Administration, said during a media conference call. The FCSA contract will enable agencies to purchase a wider variety of communications services and save money by eliminating duplicative contract management structures,Krumbholz said. Currently the General Services Administration buys capacity for civil government agencies through the Satcom 2 contract, while the Defense Information Systems Agency (DISA) buys capacity for Defense Department users via the Defense Satellite Transmission Services-Global contract.

Both so-called indefinite-quantity, indefinite-delivery contracts use companies known as integrators that purchase satellite capacity and sometimes create and manage entire networks on behalf of the government. The FCSA contract will not eliminate these types of managed services, Bruce Bennett, DISA’s director of satcom and teleport services, said during the call. But the government will also be able to purchase bandwidth directly from commercial satellite operators, which it cannot do under current contracts, he said. For such bandwidth-only purchases, the government will issue draft requests for proposals starting late this year, and contracts are expected to be issued starting in early 2011. Draft solicitations for the managed services contracts will be issued in early 2010, with contracts expected to be awarded in mid-2011, Krumbholz said.

Satellite operators like SES of Luxembourg and Intelsat of Washington and
Bermuda
have criticized the Defense Satellite Transmission Services-Global structure, arguing that they should be allowed to deal directly with Pentagon customers. The managed services integrators, on the other hand, have argued that because they do not own or operate satellites, their only incentive is to provide the most efficient, lowest-cost solutions to the government.

Industry officials on both sides were generally supportive of the new direction the government is pursuing, saying that increasing government flexibility will result in better service for the users.

“The recent decisions announced for FCSA reveal an ever-growing positive relationship between the commercial satellite sector and the
U.S.
government and a broadening of DISA’s view of the commercial satellite industry,” said Bob Demurs, senior vice president at Americom Government Services of McLean, Va., the
U.S.
government marketing arm of SES. “Industry as a whole can only be better served by more direct discussion, coordination and cooperation in development and delivery of commercial bandwidth to the government.”

Tom Eaton, president of CapRock Government Solutions of Fairfax, Va., formerly Arrowhead Global Solutions, one of three integrators that DISA now purchases services and bandwidth through, applauded the government’s decision to continue providing for the kinds of end-to-end networks his company offers.

“The new approach clearly differentiates between commodities, such as satellite bandwidth, versus value added comprehensive solutions,” Eaton said in an e-mailed statement. “We look forward to leveraging our global network infrastructure, expertise, and past performance in serving our customers under the new acquisition plan.”

In 2008, the government spent $350 million through the Defense Satellite Transmission Services-Global contract, and $47 million through the Satcom 2 contract, Bennett said. The military’s demand for commercial bandwidth has increased sharply since 2000, mostly to support the wars in Iraq and Afghanistan, he said. The launch of new military communications satellites covering the region is expected to limit that growth over the next few years but not reverse it, he said.