DISA Frustrated in Efforts To Track Spending on Satellite Services

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WASHINGTON — The U.S. Defense Information Systems Agency (DISA) continues to have trouble tracking the Pentagon’s annual spending on commercial satellite communications services because various U.S. military organizations often contract for satellite capacity independently and without disclosure, according to an agency official.

A conservative estimate is that the Pentagon purchased about $600 million in commercial satellite services in 2010, according to Charles Edwards, the deputy chief of network services at DISA’s Commercial Satcom Center. He declined to provide any numbers for 2011. Edwards said that each year DISA officials uncover a number of contracts that they did not know anything about and that the 2010 estimate is probably low.

DISA is responsible for procuring commercial satellite services on behalf of Defense Department organizations, including the military services, primarily through a contracting vehicle known as the Future Comsatcom Services Acquisition, or FCSA, program. The U.S. General Services Administration uses the same contracting vehicle to procure services on behalf of other U.S. federal agencies.

“At the end of the day, we are only going to give you numbers we have confidence in,” Edwards said March 13 during an interview after participating in a panel discussion at the Satellite 2012 conference here.

Historically, the estimates have had to be revised at the last minute as previously unknown contracts are discovered, Edwards said. “That is why I gave you a number lower than what the final number probably will be because I’m confident that it will be at least those thresholds,” he said.

One impact of DISA’s inability to track Pentagon spending on commercial satellite capacity is that sometimes Defense Department officials procure satellite capacity that they do not need, according to an industry source. Mistakes can add up fast because each contract deals with a very high dollar value, the source said.

Defense Department organizations often contract for satellite capacity independently of DISA because doing so can shave 2 to 3 percent off the purchase prices, which in some cases can amount to $10 million, according to another industry source. This is money that otherwise would go toward covering DISA’s costs for administering the contract, this source said, adding that the agency likely will never be able to fully account for Pentagon spending on commercial satellite services.

Edwards said companies do not report contracts negotiated directly with Defense Department agencies because it would uncover the fact that Pentagon officials do not follow the proper contracting procedure.

Andy Beegan, chief technology officer for Inmarsat Government Services based here, said DISA does a great job of tracking the contracts that it administers. However, each of the U.S. military services has an ability to contract independently for communications and information technology systems. Sometimes, the solution bundles satellite with other services including ground network, data and support services. The government has had some difficulty separating out these services, he said.

Beegan said the FCSA program is expected to address the issue. Contracts for bundled services awarded under FCSA will more clearly delineate the funds that go specifically for satellite-related capabilities, he said.

“And so, from our perspective, this is doing exactly what they should be doing in addressing an issue and making sure that they are able to track and manage contracts of all different flavors that may include satellites,” Beegan said during a telephone interview.

Prior to the advent of the FCSA procurement vehicle in 2010, DISA bought commercial satellite bandwidth and related network services primarily through its Defense Satellite Transmission Services-Global (DSTS-G) program. 

Under DSTS-G, DISA was barred from procuring satellite bandwidth directly from the operators. Instead, the service was required to go through one of three approved companies, called integrators, that do not operate satellites.

The FCSA program, in contrast, allows the Pentagon to buy from larger set of firms and order bandwidth and services directly from satellite operators.