Government Contract Vehicles: Life Line or Fault Line

 

Future realities of Commercial Satellites

DISA’s commercial satellite communications contract mechanisms must support the evolving and projected needs of the warfighter. Seward has seen a new focus for improvements for government and military contract improvements as to capabilities, processes and timeliness. “In the past 18 months, there have been significant changes to the DSTS-G contract as well as to the government’s internal processes. All of this has resulted in improvements for the end users,” he says. In 2009, DISA will explore contract mechanisms to replace the MSS and DSTS-G contracts as they near the end of their 10-year life, though “DISA does not foresee any changes to the existing commercial satellite communications contracts at this time,” a DISA spokesman says. According to Sears, “the key contracts in the future will be the Future Commercial Satellite Services Acquisition to be awarded in 2010 with overlap of DSTS-G’s flexible and best value contract vehicle and the Navy Commercial Broadband Satellite Program contract, which  supports X-band with high data rate.”

Trevor Haak, director of business development for Americom Government Services, says, “Fundamentally, we would like to see an integrated [military satellite-commercial satellite] strategy, architecture, planning and budgeting process and in addition, where possible, see defined requirements, mission, operations and for each contract to provide provisioning against those requirement appropriately. This will allow the operators to customize their fleet and business arrangements to meet the Department of Defense requirements in a more efficient and effective manner.”

Bristol says, “More waivers to the DSTS-G for customers buying integrated solutions that are beyond the scope of DSTS-G would make DSTS-G an ideal contract vehicle.” But Cavossa disagrees. “It is artificial, this two-tier economic model. It is not only the DSTS-G, but the U.S. government tends to buy through resellers who add value. You have a value-added integrator and/or value-added reseller that is more focused on the government customer. … All the combined satellite operator’s revenue that comes from the Department of Defense is less than five percent. The government likes to work with a value-added reseller whose government revenue is close to 100 percent. The 818 report (the Spend Analysis report) made that an open and shut case,” he says.

Patricia Cooper, President of the Satellite Industry Association, stated that “The bigger future prospect is that satellite operators would directly partner with the Department of Defense on the space segment hosted payloads.” Americom Government Services has been awarded a contract to launch and build the Commercially Hosted Infrared Payload Flight Demonstration program for the Air Force. Robert Demers, senior vice president, Americom Government Services, says, “Much of the capacity is funded by a supplemental budget. You cannot do long-term contracts. The philosophy of the Department of Defense has changed regarding commercial for right now. They are seriously thinking about how commercial satellite communications fits into their architecture. Therefore, the normal question is, ‘How will the government fund for this additional capacity, on a regular basis versus on an ad hoc basis?’ So we see an evolutionary process happening in the government in terms of operations, mission requirements that, of course, flows into the budgetary process as well.”

Contract Vehicle Realities

The key questions are what role will the commercial satellite sector play and what is the role that WGS, AEHF and MUOS will play? Commercial operators have been told that they will be a very important part of the Pentagon and future military capacity needs, and reports by DISA and the Assistant Secretary of Defense for Networks and Information Integration show a gap in military satellite communications capacity. “The bad guys are not going away for the foreseeable future,” says Bristol. “You cannot predict that the winding down in Iraq will be permanent and no hotspots will ever emerge again. A need for Department of Defense bandwidth capacity will be in demand for a very long time,” he says.

“We do not want to turn our fleet into military satellites because that is really not our role, but there are added security features that we need to engage in directly with the Department of Defense,” says Sears. “So it an investment question. … We can get a military capability in orbit in 24 to 28 months. That is not what they can do in the military.”

So the question that needs to be asked by the commercial satellite communications providers, military and the Department of Defense is what must be the right resource capacity and how to encourage a dialog through a direct contract vehicle structure? The Pentagon’s role for the commercial satellite players needs to be clarified. Will it be a permanent mix of commercial and military satellites and if so, what will be the mix? Operators wish to have direct contracts but are unwilling to take the risk of setting aside reserve capacity for the Pentagon, and the Pentagon is unwilling to take the risk to pay for advanced capacity. Two of the DSTS-G operators no longer are small businesses, and there still there seems to be a need for a buffer relationship, so the mix of types and numbers within that contract may need to be changed.

There are missing pieces on the global net-centric warfare contract puzzle board that must be found in order to insure a lifeline for warfighters. ■

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