Satellite Bandwidth for Lunch: Buy or Bring?

The commercial satellite operators that support DoD missions have long advocated for changes to the way the DoD contracts for commercial satellite bandwidth. Why? Why would a commercial satellite operator want the DoD to become more efficient at buying its bandwidth? Shouldn’t commercial satellite operators be happy with selling bandwidth to the DoD each year at premium prices?

The truth is, we see the bigger picture. And that is, efficient buying by the Government would allow industry to more effectively plan for the needs and requirements coming down the pike. That translates to cost savings for both sides, and a healthier, more predictable (read stable) industry model.

The DoD is spending much more than it should each year procuring access to this critical force enabler for the warfighter. Current commercial bandwidth procurement practices consistently miss out on opportunities for economies of scale. Yet, how can this be when we in industry and government alike know about the ever-tightening financial constraints we face? And, DoD is continuing to buy additional satellites whose concept and design is over a decade old, which won’t even be delivered in full for almost another half decade, and whose cost is 4-5 times higher than procuring a commercial satellite.

Recently, OSD issued a request for recommendations from industry on potential options for better buying. In a collective response with other commercial satellite operators, my company submitted a memo in which we outlined requisite changes:

  1. Budget and contract from an established baseline of DoD COMSATCOM needs which can result in a long-term buying strategy.
  2. Develop accurate MILSATCOM vs. COMSATCOM cost comparisons.
  3. Use IDIQ contracts only to supplement baseline requirements.
  4. Build an architecture that fully integrates commercial and military capabilities.
  5. Partner with industry to build protected communications infrastructure for space systems.
  6. Use hosted payloads.
  7. Have a single Government office which handles all commercial and military satellite capabilities.

The commercial operators are all smart, sophisticated and patriotic. Collectively, we have plenty of creative, innovative business models to achieve greater value for the customer – if only the Government would (or in some cases could) take advantage of these approaches.

We have received no official reaction to our response to OSD’s request. I’m hopeful one will come. In general, commercial satellite operators are concerned about the state of relations with DoD. Despite some reasons to be optimistic about improving opportunities to make headway, the fact is, industry’s overtures to the Government have been met with everything from a polite nod to unbridled enthusiasm, but the end result has been hauntingly consistent – pretty much business as usual.

Commercial bandwidth is a necessity to provide full coverage for the warfighter. While many inside the Pentagon now freely admit that commercial is a major contributor to the war effort, now and in the future, buying practices go essentially unchanged. The Future COMSATCOM Services Acquisition (FCSA) contract which replaced DSTS-G is, in many ways, an improvement over its predecessor. But, in the scheme of things, it will achieve only marginal improvements in value. Changes to procurement need to be much bolder. We need something that will really move the needle.

DISA does an admirable job of managing individual mission requirements and it is in the prime position to create significant value for the DoD, yet does not have the ability to do so. Nor does any other organization in the DoD have the centralized role and responsibility for all current commercial bandwidth procurements – full time, long term, occasional use and short term – plus the authority to determine how to invest in bandwidth for the betterment of the warfighter and the treasury. We need to find ways to incentivize decision makers to do things differently. Empowering DISA to perform this function makes sense in my opinion, and will almost certainly make a difference.

Big MILSATCOM programs have a budgeted line item with a “fixed” dollar amount at the right side of the page, but may not include complete costs for launch, operations and services over the lifetime of the satellites. So it may be difficult for some inside the Government to see how they can save money buying commercial bandwidth. When commercial bandwidth is purchased on the spot market it may seem expensive. That’s because these purchases are, by commercial standards, awfully short periods in duration – which is the most disadvantageous way to buy under the most disadvantageous conditions. Why eat out for lunch every day when brown-bagging it occasionally makes a big difference to your bottom line? You know you are going to get hungry each and every day!

What we need is someone in a position of authority who will no longer accept reduced capabilities for the warfighter and who will no longer accept that we are spending considerably more money than can be justified procuring commercial bandwidth and massive military satellite systems. The military did not get all the smarts this country has to offer – neither did the commercial industry. We need to tackle these issues urgently, and together. It is only by industry and Government working collaboratively that we will find the right answers.