COMSATCOM continues to play critical role in supporting military

Faced with a shortfall of on-orbit capacity from military satellite systems, the Pentagon continues to rely heavily on commercial satellite communications to meet the bandwidth demands and operational requirements of deployed U.S. forces.

Faced with a shortfall of on-orbit capacity from military satellite systems, the Pentagon continues to rely heavily on commercial satellite communications (COMSATCOM) to meet the bandwidth demands and operational requirements of deployed U.S. forces. For the Defense Department, the largest user of commercial satellite bandwidth in the federal government, COMSATCOM is critical in supporting ongoing operations, particularly in the Middle East.

“Commercial leased or hosted capabilities have been an integrated part of our SATCOM capability for years,” said Gil Klinger, deputy assistant secretary of defense for space and intelligence, at a House Armed Services Subcommittee hearing in March. “Leased COMSATCOM provides the predominance of [U.S. Central Command] communications and is anticipated to continue while U.S. forces remain active in the CENTCOM [area of responsibility].”

From fiscal years 2003 through 2009, DOD’s use of commercial fixed-satellite bandwidth in the Middle East increased by more than 180 percent. During that same period, DOD bandwidth expenditures in the region increased by more than 170 percent. According to the Government Accountability Office, the real cost per megahertz of bandwidth for DOD was 30 percent lower in fiscal 2003, and lower in all intervening years, than in fiscal 2010.

To get a handle on costs, the Defense Information Systems Agency (DISA) partnered in 2009 with the General Services Administration (GSA) and put in place the Future COMSATCOM Services Acquisition (FCSA) plan to increase competition and exert downward pressure on the cost of fixed satellite services. FCSA replaces the Defense Satellite Transmission Services-Global (DSTS-G) program, which had been the Pentagon’s primary vehicle for procuring commercial satellite bandwidth and related services.

High-bandwidth prices

FCSA couldn’t come at a better time. Fiscal 2010 marked the first time the average DSTS-G price for leased bandwidth exceeded the relative global industry average, according to the latest DOD COMSATCOM annual usage report released in August 2012.

“The bad news for DSTS-G is that there probably wasn’t enough competition,” said David Cavossa, president of government solutions for Harris CapRock, an FCSA vendor and a DSTS-G provider. “We benefitted from that, but from the perspective of the taxpayer, that probably wasn’t the best way to structure a contract vehicle.”

The majority of ongoing DSTS-G requirements began transitioning to FCSA vehicles in February 2011. Remaining requirements on DSTS-G will be transitioned to GSA Schedule 70 by February 2013.

Only three commercial satellite service providers held DSTS-G contracts. However, with FCSA, many more vendors than were available through DSTS-G now compete to provide services in FCSA’s transponded capacity category (subscription and end-to-end services categories are also offered under FCSA).

“The FCSA strategy has increased competition sevenfold, opening competition to more than 20 satellite vendors,” said Klinger during testimony before Congress in March. “We have already seen that this additional competition is providing better pricing.”

Jim Russo, GSA SATCOM program manager, claims that FCSA has increased competition for satellite services via multiple contract vehicles, including Schedule 70 special item numbers as well as CS2 and CS2-SB IDIQ [indefinite-delivery, indefinite-quantity], and that although Schedule 70 task orders are firm fixed price, “agencies routinely request and receive discounts from posted contract pricing on a task order basis.”

In addition, according to Andrew Ruszkowski, vice president of global sales and marketing for XTAR, a Schedule 70 transponded capacity contract awardee, FCSA allows the government to contract directly with satellite operators, rather than indirectly through satellite resellers or integrators, which should reduce DOD’s cost to acquire fixed satellite services.

GSA’s Russo said that the costs of fixed satellite services have been stable over the past few fiscal years. Nevertheless, Harris CapRock’s Cavossa points out that pricing hasn’t yet come down because commercial satellite bandwidth is still a scarce commodity.

“CENTCOM has been such an expensive place to do business in the satellite world because of the demand,” Cavossa said.

The Pentagon in fiscal 2010, the latest year for which data is available, spent $655.3 million on fixed satellite services, a 3.8 percent increase in expenditures and a 6.4 percent increase in usage compared to fiscal 2009. Despite the end of combat operations in Iraq in 2010, industry officials have not seen a slowdown in the U.S. military’s use of commercial satellite bandwidth.

“When things drew down in Iraq, a lot of requirements simply shifted over to the Afghanistan theater,” said Skot Butler, director of strategic initiatives at Intelsat General, an FCSA contract holder for both the Schedule 70 transponded capacity and the recently awarded CS2 contract.

“There’s still growing demand for space segment capacity,” said Ruszkowski, including new areas of DOD concern such as Africa. “We have moved steerable spot beams from other regions of the world to the Horn of Africa, as well as North Africa.”

Over the last two years, U.S. Africa Command’s bandwidth requirements increased 400 percent, according to Cavossa, who expects Asia-Pacific, where there is little capacity, to also become a DOD high-demand region for commercial bandwidth.

“If there were a conflict there [in Asia-Pacific] in the next couple of years, the bandwidth prices would skyrocket,” he said.

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