U.S. government continues to falterin buying commercial satcom services
Commercial satellite communications operators complain that a broad overhaul in satcom procurement initiated a year ago, under the new U.S. National Space Policy to help overcome a glaring shortfall in bandwidth, is not working as intended because of contracting inefficiencies.
In addition to end-to-end solutions, the overhaul—known as the Future Commercial Satcom Services Acquisition (FCSA)—is intended to increase the government’s ability to draw on transponder lease and subscriber services, which can be made available with relatively short lead times (AW&ST April 12, 2010, p. 52).
Instead of restricting the competition to a small number of aggregators as was done previously, FCSA allows any operator able to meet the requirements of a generic format, known as Schedule 70, to compete for individual task orders. But satcom executives say process inadequacies and a scarcity of contracting officers sufficiently acquainted with satcom procurement are considerably slowing procurement—even where requirements have been clearly identified—limiting the benefits to the government.
They note that the cumbersome U.S. acquisition process contrasts sharply with that in other countries like Australia, which was able to sign off on an X-band hosted payload in less than six months. As a result, executives say, the U.S. could lose out in the competition for bandwidth in some frequencies where capacity is particularly short, such as Ku-band in some orbital slots, and end up paying more even when capacity is available.
It’s also unclear whether the new contracting vehicles will support the implementation of the recently released National Security Space Strategy, executives say. The policy goes beyond FCSA and urges theto investigate more innovative acquisition strategies such as hosted payloads. But there’s some uncertainty as to who should control these strategies—the Defense Information Systems Agency (DISA), with its better understanding of the commercial satellite industry, or the Air Force Space and Missile Center, which best understands the Pentagon’s core military satellite communications requirements.
Rebecca Cowen-Hirsch, president of Inmarsat Government Services, says federal procurement rules allow task orders to be issued through FCSA once three contractors have received Schedule 70 approval for streamlined procurement. Currently six Schedule 70 contracts have been awarded for transponder bandwidth and seven for subscription services. However, the government is finding that it is getting fewer responses from contractors than expected, she says, and often at higher prices than anticipated.
Contractors counter that the high prices are due to poorly defined requirements or a poor understanding of pricing. The problem is compounded, says Cowen-Hirsch, by the slowness with which DISA is approving additional Schedule 70 contracts. More than a dozen applicants are in the queue right now, including some of Inmarsat’s partners that have been waiting for approval for more than five months.
Philip Harlow, president and chief operating officer at Loral/Hisdesat joint venture XTAR, says the slowdown may end up limiting competition, particularly during the current transition to FCSA.
Kay Sears, president of Intelsat General Corp., the government services entity of Intelsat, admits that the government kept to its schedule of beginning the task-issuance process in the final quarter of 2010, and that the job of responding to a crush of nearly 50 task orders in just six weeks is a daunting one.
“Large vessels turn slowly,” she says, adding that Intelsat is “unaware of a specific bottleneck in the government award process” and noting that issues it is encountering are “minor.”
However, Sears says government disappointment with responses and pricing should not come as a surprise considering that the focus of capacity requirements is the Middle East and Southwest Asia, and there is very limited capacity available in these bands. Moreover, existing task orders have been around for 3-5 years and have thus benefited from pricing that was locked in at a time when there was more supply in some areas, she notes.
Other executives note that many of the task orders are for extremely large amounts of bandwidth, some in the hundreds of megahertz, and it is unrealistic to expect a raft of submittals for such requirements. Specific technical constraints can reduce the number of responses even further, in some cases to a single source.
“There is an argument to be made that, due to the high volume and extremely short turnaround of the task order responses to date,” says one operator, “the government and the taxpayer have not gotten the full benefit of time [it often takes] to yield high-value solutions.”
For instance, the operator says, simply requesting 10 mhz of capacity for an existing requirement, rather than providing industry with the technical details needed to propose a best-value solution for the requirement, limits responders’ room for maneuver. In one comparison, the operator notes, engineers discovered that meeting a given need with an older satellite required three times the allocated capacity than with a new spacecraft. “Comsatcom is not a commodity,” the operator says. “There is a qualitative difference in the products that are available.”
Meanwhile, efficient use of commercial satellite communications capacity is not the only problem bedeviling the Pentagon. Officials also face hurdles using their own military communications satellites efficiently once they are in orbit.
During the past decade of major procurement and development problems, satellite fielding dates have slipped significantly. This has opened up accounts set aside for ground terminals to be “raided,” either to pay for shortfalls in the satellite projects themselves, or to fund other priorities amid delays.
Although threeWideband Global Satcom (WGS) satellites have been fielded, the military has not fully exploited its Ka-band capability because the associated new terminals have not been ready on time. The satellites also were “backwards compatible” in X-band from birth with terminals for its predecessor constellation, the Defense Satellite Communications System (DSCS), says an Air Force official.
This official argues that the “statistics don’t look as impressive to an uninformed analyst, because you are only using half” of the capability.
“That is no real surprise . . . nor is it a criticism of the process,” the official says, noting that it is “harder to hold right to schedule” for the satellite segment of a communications architecture.
However, there’s a plan in place to install Ka-band terminals globally and begin using the new capacity. Three WGS satellites have been launched, and one each is supporting forces in the Pacific, Asia and Eastern Atlantic regions.
The challenges of synchronizing procurement of the terminals and satellites, however, aren’t made easier by the bureaucratic structure established to buy and develop them in the Air Force.
In some cases, separate three-star generals are responsible for developing the satellite and the terminals. Sometimes their staffs can fall out of sync, with procurements stymied.
Robert “Tip” Osterthaler—a retiredbrigadier general who is president and CEO of SES World Skies U.S. Government Solutions—has seen satellite-services procurement from both sides. The FSCA approach “is likely to be an improvement because it brings more people into the marketplace and I think more competition has its own virtue,” he says. “It’s way too soon to holler victory, though. We’ve only just begun.”
Ultimately, Osterthaler says, more candor is needed on both sides of the procurement fence to gain the best capability for the taxpayer’s money into the hands of those who need it.
“The government needs to be more open about the government’s needs,” he told the Washington Space Business Roundtable on Feb. 15. “You can get yourself tied into knots advising your contracting officer what you can and can’t say. But if you don’t say anything to them, you’re leaving it to them to guess.”
Despite concerns about FCSA, satcom operators have not been discouraged from aggressively moving to add new capacity to meet U.S. and allied requirements.
Intelsat has three new spacecraft under construction at Boeing—IS-22, with the Australian X-band hosted payload; IS-21; and IS-27, equipped with a hosted payload anticipated—for the U.S. Navy, to be launched in the fourth quarter 2012. In addition, Intelsat is looking at business cases for a fourth satellite under contract to Boeing, and has leased 16 mhz of X-band capacity on the XTAR-LANT payload operated by XTAR.
Intelsat is also reviewing the pros and cons of investing in Ka-band, as either an incremental payload or a dedicated satellite, to meet mushrooming demand for broadband applications, although Sears points out that Ka-band has many drawbacks. “We have to sort through the hype assorted with Ka,” she says. “We’ll introduce it when we’re ready.”
Inmarsat ordered three big Ka-band satellites for its new high-speed Global Xpress network last August, for launch by 2014. The company believes, among other things, that the move will give it a better chance to win the next round of the U.S. Navy’s Commercial Broadband Satellite Program (CBSP), the Navy’s equivalent of FCSA.
The first round, worth up to $543 million and extending through 2014, was awarded to an Intelsat-led team early last year. Inmarsat may also look at ways to offer X-, Ku- and C-band capacity—the present CBSP requirement—perhaps through a hosted payload, if necessary to land the award.
An overlay of six steerable beams on each of the Global Xpress Ka-band spacecraft will provide considerable flexibility in meeting user requirements. A big chunk of capacity on Global Xpress—equivalent to 10% of anticipated revenues over the first five years of operation—was pre-sold to Boeing for resale to U.S. government users.
Inmarsat will also begin rolling out a new generation of L-band spacecraft based on the European Space Agency’s Alphasat design that will operate in extended L-band and offer more throughput than the exiting Inmarsat 4 system. The first satellite, I-XL, will be orbited in 2012 to 28 deg. E. Long., a high-government-use neighborhood. The second spacecraft, to be ordered on a rolling-procurement basis, will likely use a bigger bus that entered development at ESA in January.
Other operators are also considering capacity expansion. SES, like Intelsat, is looking at whether to add Ka-band. XTAR is eyeing new capacity in several areas, including the Asia-Pacific, which is expected to run into a big shortage of commercially available X-band down the road, company executives say.
Eutelsat expects government customers to be among the leading users of its 70-gbps high-throughput KA-SAT, launched in December. The company already derives around 10% of its revenues from government use.
Astrium, the largest government satcom operator, agreed last year to build a fourth satellite for its British network. It is now preparing to bid for France’s Syracuse 3 system, which the government hopes to sell and lease back to a private contractor this year.