DoD Increasingly Dependent on Satcom Services
The U.S. Department of Defense (DoD) continues to experience growing satellite bandwidth requirements driven by the application of Network Centric Warfare Doctrine. These growing needs have, in turn, led to a greater reliance on commercial satellite communications (Satcom) to augment military satellite networks (Milsatcom).
It is by now a well-known fact that approximately 80 percent of the satellite communications capacity needed for Operation Iraqi Freedom was provided by commercial satellites, when surge requirements for operations exceeded Milsatcom capabilities.
Whether you look over the short-term or long-term planning horizon, forecasts show significant growth in demand for both satellite capacity and value-added services for DoD operations worldwide that significantly exceed Milsatcom capabilities. Yet even with these compelling data, the procurement practices for these vital services have been out of step with the strategic planning of DoD operations, thus failing to deliver assured access to space-based communications to the warfighter, and the best value to the U.S. taxpayer.
In December 2003, the U.S. Government Accountability Office issued a key report calling for improvements to the planning and procurement of Satcom by the DoD. Senior military officials such as former Unders ecretary of the Air Force Peter Teets and Navy Adm. James Ellis, the former commander of U.S. Strategic Command, took responsibility to develop a responsive action plan in full cooperation with the commercial satellite industry. The goals of this process were to define and improve:
- The operations standards,
- Security requirements, and
- Procurement practices of Satcom by the DoD.
In each case, the recommendations would be integrated into a strategic framework that is in line with the DoD’s long-term goals for space and information superiority, to reinforce and promote Network-Centric Warfare doctrine, and to support the warfighters in their operations around the world.
For over a year now, Americom Government Services has been working collaboratively with DoD and the satellite community through the DoD-Industry Working Group. The exclusive focus of this team has been to improve operations, security and procurement practices.
It is not surprising perhaps that this diverse working group came to agreement on the first two rather quickly. Procurement is taking a bit longer.
To use a best-practice example from the business world, the DoD could plan for and purchase satellite bandwidth similar to the way large corporations in the media or telecom industries purchase satellite services: long-term, direct contracts with the satellite operators to ensure access to critical capacity when it is needed, at the best possible rate.
From the operators’ point of view, long-term revenue commitments against the depreciation of their very expensive space-assets, typically result in more favorable pricing for the procurer. The current DoD Satcom bandwidth procurement practice of short-term, spot market auction-based contracts does not drive price as efficiently, and in cases where there are few alternatives, or limited bandwidth available, it does not drive price at all.
Often the requirements go beyond bandwidth where value is added to satellite capacity through the design, construction and operation of satellite-based networks, or through the design and integration of satellite communications equipment. When those needs arise, it makes sense to procure these services through Satcom integrators. In fact, several of the satellite operators are leading Satcom services integrators, like Americom Government Services .
When you combine these two ideas — the efficient procurement of commercial satellite bandwidth and Satcom value-added services — you begin to answer the question posed by the December 2003 Government Accountability Office report.
We firmly believe that the planning and procurement of satellite bandwidth and value-added services is tied to the operations and security best practices for Satcom, as defined by the DoD-Industry Working Groups over this past year. As such, we believe that commercial satellite operators have a central role to play throughout the services procurement chain — bandwidth, value-added network services and integrated Satcom equipment.
Specifically we advocate the following:
- DoD should procure satellite bandwidth directly from the satellite operators;
- DoD should procure value-added Satcom network services directly from the leading Satcom service integrators;
- DoD should procure Satcom equipment and integration directly from the leading Satcom equipment integrators;
- DoD should continue to plan for Satcom (short term and long term) through its designated offices and commands like the J6 and U.S. Strategic Command in cooperation with the commercial satellite industry, and should manage and procure all Satcom bandwidth, value-added network services and equipment via an empowered and appropriately resourced Defense Information Services Agency .
Through a single planning and procurement process for all satellite-related services and equipment, the longer the contract, the better the economics for the procurer and the taxpayer, and the more predictable the access to space-based communications resources will be to support operations and the warfighter.
For these reasons, Americom Government Services is advocating that the FY 2006 Department of Defense Authorization Bill direct the Defense Department to procure satellite bandwidth directly from the commercial satellite carriers through the Defense Information Services Agency. In addition, Americom Government Services is recommending that DoD consider a hybrid approach to Satcom procurement for bandwidth, services and equipment, that ties into the Satcom operations and security recommendations of the DoD-Industry Working Group, and into long-term planning and demand forecasts.
Cooperatively planned forecasts and procurement practices that feature open and robust competition for longer contracts and multiple awards will deliver better Satcom services to DoD at a more economical price.
We’ve been discussing the need for reform long enough. The FY 2006 DoD Authorization Bill presents an important opportunity to act. Seizing this opportunity will benefit the warfighter, our country and our industry.
David Helfgott is president & chief executive officer of Americom Government Services, Inc.