DOD shifts satellite buys

Spurred by a General Accounting Office report, Defense Department officials are considering changing the procedures for purchasing satellite communications services.

In a report issued in December 2003, GAO auditors found that the Defense Information Systems Agency, the primary source of satellite service acquisition for DOD, has not fully satisfied its customers. The process takes too long and costs too much, according to some military customers who often need services on short notice to deal with emerging trouble spots worldwide, the report states.

John Stenbit, who was DOD's chief information officer at the time, filed a written response concurring with GAO's findings and pledging to review the procurement processes and make needed changes. Even though Stenbit has since left government service, the department is following through, according to some industry leaders.

"There's a better dialogue in the last six to nine months than I've ever seen," said David Helfgott, president and chief executive officer of Americom Government Services. Defense officials and satellite service providers should be able to cooperate on planning, determining capacity requirement and establishing a longer-term procurement cycle, he added.

Bulk procurement, a portability of services clause — which would allow one DOD agency to transfer unused bandwidth to another — and other elements would result in greater flexibility, faster response times and lower costs for buyers, according to the GAO report and other observers. A DISA spokesperson declined to discuss specifics but said officials are considering ideas.

DISA "has received a number of recommendations for improving its current process for acquiring commercial satellite bandwidth from both the GAO and industry," the spokesperson said. "We have been evaluating those recommendations as we refine DISA's long-term bandwidth strategy and have been proactively working with customers to get their views on the current process for obtaining commercial [satellite communications] services."

DISA is not the only source of satellite communications procurement services, said George Spohn, assistant vice president of the government services division at Hughes Network Systems Inc. The General Services Administration's Federal Technology Service runs a satellite contract, and agency officials can conduct full and open competitions through FTS. The GSA schedules also offer some satellite services.

Agencies and companies should focus on solving problems rather than on the technology, Spohn said. Companies set themselves up as "satellite stores," but that brings in buyers only if the buyers know that satellite services are what they need.

"What we need to do, and what the industry needs to do in general, is to talk about applications," he said. For example, companies should market telework services rather than raw satellite bandwidth.

FTS' Satellite Services contract brought in about $61 million in business in fiscal 2003, said Sabrina Crane, program manager for the contract, adding that it will surpass that this year.

The contract promotes flexibility by allowing agency officials to go directly to satellite vendors to buy services if they want, she said. Or they can have FTS take care of the procurement on their behalf under FTS' fee-for-service arrangement.

About 40 percent of the contract's business comes from DOD, Crane said. The rest comes from civilian agencies. Nine vendors hold places on the multiple-award contract.

"The civilian agencies tend to have a better grasp on what their needs are going to be," she said. "They typically plan in advance. DOD has to respond more quickly."

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