The new U.S. Defense Department policy that dictates a detailed, step-by-step process for formulating a more rational approach to the way the Pentagon buys commercial satellite communications services is right on target.
If implemented properly, the policy by 2006 will lay the foundation for a procurement strategy that gives the Pentagon more bandwidth per dollar while enabling satellite operators to better prepare to meet the needs of what is now their largest customer. As such, the Policy for the Planning, Acquisition and Management of Commercial Satellite Communications Fixed Satellite Services represents one of those rare instances in which the grossly overused term win-win actually applies.
In issuing the policy Dec. 14, Linton Wells, acting assistant secretary of defense for networks and information integration, correctly pointed out that military-owned and -operated satellites cannot, and for the foreseeable future will not, accommodate all of the Pentagon’s bandwidth needs, contrary to past assertions by some defense officials.
Although the Defense Department has new and highly capable systems in development or on the drawing board , their availability dates are uncertain. The one with the greatest potential to reduce the military’s reliance on commercial services, the Transformational Satellite communications system, seems likely to be delayed well beyond its currently planned 2013 launch date.
Even with the Transformational Satellite system it is difficult to see how commercial services could be removed from the equation or considered separately from the overall military satellite communications architecture. Appropriately, the new policy calls for commercial services to be integrated fully into the planning for that architecture.
Another key feature of the policy is that it directs the relevant Pentagon organizations to develop a single procurement strategy that divides the military’s commercial bandwidth requirements into three categories based on predictability. This properly recognizes that some requirements, delivery of signals for the Armed Forces Radio and Television Service, for example, are stable and thus easy to predict over the long haul; while others, in particular the area-specific demand surges that accompany crises or military actions, are far more difficult. In between are so-called flexible capacity requirements that reflect the military’s regional strategic planning.
The three-layered approach should substantially reduce the requirements uncertainty that makes the Defense Information Systems Agency, which is responsible for procuring commercial services, reluctant to sign long-term contracts even though they are far more economical than the high-priced spot market leases that are typical today. It also will enable the Pentagon to better leverage its position as the market’s 800-pound gorilla to negotiate more-favorable contract terms with the satellite operators.
For its part, the satellite services industry should get the security and stability that come from long-term leases, as well as the predictability that enables it to plan better and thus lower its own costs.
Surge requirements will always be difficult if not impossible to predict, and unless the Pentagon is willing to pay to reserve large amounts of capacity that will never be used, some spot-market leasing at high prices is probably inevitable in crisis situations. It also remains to be seen whether long-term leases will be sufficient to induce satellite operators to better protect their systems, which are vulnerable to jamming and other mischief. But these issues are relatively minor.
Commercial satellites more than proved their military worth during the U.S.-led invasion of Iraq in March 2003, where, according to some estimates, they provided up to 80 percent of the satellite bandwidth consumed by U.S. and allied forces. It was based in part on this experience that the industry began pointing out the deficiencies in the existing procurement system and suggested changes that would benefit everyone involved.
Thankfully, and to its credit, the Defense Department was listening.
