SES-GS Corporate VP Bill Flynn Sheds Light on Government Comsatcom Procurement
Military strategies for procuring commercial satellite capabilities are designed to provide the best resources possible to the warfighter. This process is complicated, however, and requires expertise from both the commercial side and the government side. SES Government Solutions found that combination in its corporate Vice President Bill Flynn. Bringing 26 years of service in the U.S. Navy, both as a Naval Officer and civil servant, Flynn has a strong understanding of Navy Combat Management, Command and Control (C4I). He has led SES-GS to leverage his military experience to best address government needs. Flynn recently spoke with Via Satellite to discuss the challenges in providing commercial satellite communications (COMSATCOM) for military clients.
Via Satellite: What are the hurdles that the U.S. Navy currently faces when it comes to buying COMSATCOM, and how is the commercial industry capable of resolving these problems?
Like most of our government customers, one of the main challenges they are faced with is providing bandwidth at the right location, at the right time and at the right price. The availability of bandwidth can become a significant challenge. In some cases, the Navy operates in high demand regions, and depending on the timing of their requirements, the bandwidth they need may not be available to them. So what can the Navy do to mitigate their risks? The government, including the Navy, starts to take advantage of the National Defense Authorization Act (NDAA) language where they can buy bandwidth for longer periods of time in greater amounts. These multi-year contracts allow the Navy to start influencing the design of satellites and let us allocate more bandwidth in greater quantities to meet that demand in a more proactive manner.
Most of our government customers are on one-year contracts with four option years. We, the satellite providers, have to really fight in some cases to get and reserve the bandwidth that our Navy customers need. The current contract is set up where Intelsat General is the prime contractor and we are the subcontractor. Because we are two major satellite providers, we have been able to accommodate the Navy and meet those demands. This is only because we have had the ability to work with our asset management teams to find the bandwidth they are looking for.
Via Satellite: How can U.S. government institutions like the Navy benefit from the National Defense Authorization Act (NDAA) that was just passed?
If you have a five-year contract comprised of a one-year base and four option years, by the time you get to the end of the contract you’ve got everything exactly the way you want it; and then, suddenly, you have to recompete it — It doesn’t make any sense. Custom Satcom Solutions (CS2) contracts use a similar format. The Navy, as well as other government institutions, can benefit from the NDAA by deviating from this strategy. Let’s say you have the ability to buy a five-year base with five option years. That provides enough time to build out the infrastructure exactly the way the Navy wants it, and then also, at the same time, maximize your cost efficiencies, most likely at greater bandwidth amounts. That would offer significant savings.
Via Satellite: How does the government make a long-term strategy for procuring Satcom when they know that a lot of the reasons for that procurement could be short term?
That has always been the excuse the government gives for not doing this. But when you take a look at the Navy contract and their requirements, which we’ve been involved with for more than 10 years, they have a stable requirement over North America and they needed that same amount of bandwidth for the last 10 years or longer. This may not be the case for every region, but for the ones where you know you’ve got stable requirements, why not take advantage of using that multi-year capability?
Via Satellite: What are the significant cost drivers that the U.S. government should be aware of when it comes to buying COMSATCOM?
The most significant cost driver is essentially the general theme of what we’ve been talking about. If you’re buying bandwidth in one year increments or shorter — in some cases our customers are looking for even shorter — that is the most significant cost driver. But there are others. Adding additional frequency bands that require increased backhaul capabilities, steerable beams — which require multiple transponders — and redeploying bandwidth are other cost drivers. Airborne requirements can also be pricey. They use smaller antennas and require higher throughput, so that’s kind of a bad combination. The higher throughput with the smaller antenna means you’re going to need more bandwidth to meet the requirements.
Via Satellite: What are some positive things the government can learn from the Navy’s procurement strategy?
The Navy has a model where instead of buying by satellite they purchase by region. That language goes into contracts and makes it easy for us to develop strategies for solutions. It doesn’t have to be a particular satellite. During the life of the contract we can change those satellites out without having to change the scope of the contract.
Via Satellite: What can the U.S. government learn from the procurement strategies of other governments?
In the specific case of the U.K. Ministry of Defense (MOD), we can learn that you save money by procuring longer periods of time. One MOD contract for COMSATCOM that I am familiar with is a 20-year contract. It’s for a complete end-to-end solution, meaning everything including installation, the lifecycle support and even the training of operators onboard ships. In that particular case, the contract requirements call for the vendor or the contractor to be completely responsible for end-to-end solutions. If there is an outage of any sort in that COMSATCOM service, they are responsible and they have to pay an outage credit. That really incentivizes the contractor to make it right. With a 20-year contract like that, you have the ability to really emphasize an efficient, highly reliable solution. The government really benefits from that.
Via Satellite: Subscriptions services replace the legacy Inmarsat contract under COMSATCOM. Do you see this as a step forward for the government?
In some special cases yes, I see that as a step forward, and I see why that would be an advantage for the government. However, most of the government customers that we deal with are looking for a customized solution that you find in CS2. They want something that is not necessarily cookie-cuttered out of a subscription service. It could benefit sometime in the future, but most customers are looking for tailored end-to-end solutions to meet their specific requirements.
Via Satellite: What can the government learn from how the commercial industry procures Satcom?
There are times where a commercial outfit, because they have a very good handle on the demand signal from their customers, can pre-buy transponders for multiple years for a lot of bandwidth. That’s a distinct advantage. Ninety percent of our business at SES is commercial. Those procurements are achieved typically even before the satellite is launched. They know exactly who their customers are going to be, so our commercial designers will design the satellite specifically for that customer. Once it’s in orbit and ready to deliver service, it’s already a done deal. The government can benefit from that [model]. If we knew more in advance, we could better address the specific needs of the government. There are already some concepts out there where we are building a satellite to address the specific needs of the government, but it’s not as robust as what we do for commercial customers.