Revisited Advice: How the NDAA Stacks Up to Industry Input
In January 2013, five companies — Eutelsat America, Intelsat General, Telesat, XTAR and SES Government Solutions (SES-GS) — submitted a white paper to the United States Department of Defense (DoD) titled “Seven Ways to Make the DoD a Better Buyer of Commercial Satcom.” The paper outlined goals for the DoD to acquire commercial satellite communication (comsatcom) in a way that would save the government money and the industry time. A year later, the 2014 National Defense Authorization Act (NDAA) was approved with comments that addressed comsatcom. The bill has received praise for some sections, but how does it compare to what the industry has said needs to be done?
The very first point of the ”Seven Ways” paper called for the government to establish a baseline of how much comsatcom it needs. The government uses an amalgam of military and commercial satcom systems to meet its needs. Has the DoD planned out what percentage of comsatcom it will budget and contract?
“It hasn’t,” Nicole Robinson, corporate VP of government affairs and communications at SES-SG, told Via Satellite. “That’s probably one of the most crucial elements of the ‘Seven Ways’ paper — creating a baseline of requirements that they need on a global basis would make a foundation on which you can structure architecture. We are doing that on an ad-hoc means now where we are constructing military satcom systems, both for communication, sensing and other technologies, and then we are expecting commercial satcom, through leasing on the spot market, to fill some of the gaps that those systems aren’t providing.”
Other points were largely missed as well. According to Robinson, the bill did not create an accurate cost comparison of military versus commercial satcom, lay out an architecture that fully integrates commercial and military capabilities, or establish a single office to handle military and commercial satellite capabilities. Many of the issues mentioned in the paper were, at best, only partly addressed in the new bill.
“I don’t want anyone to interpret my comments to say, ‘Congress hasn’t heard what we’ve been saying,’ [because] they have,” said Robinson. “We’ve crafted a strategy toward finding a way of accomplishing many of these ‘seven ways,’ but nothing definitive has taken place.”
Two major highlights from the NDAA 2014 bill were language that directed the DoD to study the feasibility of multi-year procurements and hosted payloads as cost saving opportunities.
“I think it is a realization that all the efforts the industry has been putting forward for the past few years to offer lower cost solutions, which can still meet government needs, have finally been heard,” said Claude Rousseau, senior analyst at NSR.
What prompted the government to finally look into these commercial options that the satellite industry has suggested for several years? Rousseau puts the blame squarely on one catalyst: budget.
“Had there not been sequestration or all these problems with budgets, I don’t think this would have been enacted,” he said. “If the intent is to really cut down on the acquisition of spot market prices that can sometimes be up to 25, 30 or even 40 percent more … then that is good news for the taxpayer.”
The DoD may also be warming up to the white paper’s suggestion to make a single office for satellite capacity needs. Different offices commonly handle milsatcom, which makes comparing costs and integrating infrastructure a more difficult task.
“In our engagements with staffers and members over the past year, my indications are that there is acknowledgement that there would be value and benefit to having a single program office to have one global view of satellite communications architecture,” said Robinson. “We’re just not there yet.”
Futron director of strategy and consulting Sima Fishman agrees that the DoD is taking the white paper’s suggestions seriously. “When the major players of this industry set aside competitive rivalries to help educate their customer, they give a clear signal that something is broken in the process,” she said. “It is hard for government to disregard such a primer on the basics of doing business in the commercial world.”
A single office for satcom could set the stage for meeting the paper’s other points, such as streamlining the process for comparing procurement strategies. Having multiple procurement authorities creates dissimilar views on how to meet the DoD’s needs. A lot of the operational costs for things such as personnel, infrastructure and daily operations remain unknown. This makes an understanding of global capability difficult, and a cost study done by industry would come with an obvious conflict of interest. Robinson suggested it would be in the government’s interest to conduct its own study.
“For those of us on the commercial side, those are absolute costs,” said Robinson. “We live and breathe by them because they determine how profitable we are. And this isn’t just SES, it’s all of the commercial operators. We know down to the cent how much it costs to launch and operate every one of our satellites. It’s difficult to do a cost comparison between a military satellite asset and a commercial satellite asset when all of the true costs behind each are not readily known. If you had Congress encourage the U.S. Government Accountability Office (GAO) to do an exploration on the costs of milsatcom versus comsatcom, then you would have an outside perspective looking at it.”
“A better question [than if the DoD knows its comsatcom needs] might be does the DoD have a solid understanding of how much comsatcom it actually has?” said Fishman. “Or how that capacity is utilized? Or what the vendor community can offer? Because the answers to these questions seems to be no, it is hard to imagine DoD has an accurate vision of its actual purchasing needs for minimizing cost.”
While the NDAA 2014 does have many steps forward, which are worth celebrating, it will take more time before the DoD implements more of the advice it received from commercial partners. According to Robinson, approximately 80 percent of military communications rides on commercial satellites. comsatcom plays an integral role in the government’s military strategy, and the industry recognizes government as an important partner.
“Even if you disagree with 80 percent, there is universal agreement that most of the satcom the DoD uses today is commercial,” said Robinson. “We’re pushing on an open door. Congress understands, and I think the staffers understand. It’s just not an overnight process. We need the active language in the FY2015 bill that grants DoD the authority to do things differently.”