DoD Official Does Not See Value of Commercial Satcom Beyond Short Term: Is He Comparing Apples to Oranges?

Department of Defense (DoD) procurement rules for commercial SATCOM capabilities support commercial satellite use for national security missions but almost uniquely for short-term requirements.

That is one of the key insights from Steven Miller, Director of Advanced Systems Cost Analysis, Office of the Secretary of Defense, who spoke at the recent Satellite 2014 Conference & Exhibition.

As highlighted in Defense Daily (subscription required), the DoD will not completely outsource its SATCOM capabilities to the commercial sector.  Miller did point out that commercial satcom is very advantageous as a solution, but for “very short, transient” opportunities.  He explained that DoD has not been able to prove the business case using commercial for long-term requirements. He firmly believes the DoD should build out its own offerings for the long haul.

Miller’s initial remarks at the event came in response to a panel comment by Kay Sears, President of Intelsat General, who pointed out that the commercial industry is launching communications satellites equally as complex and capable as those operated by the U.S. government.

In addition, Sears highlighted to Defense Daily that industry does a good job of providing satellite communications and that the DoD’s analysis on the business case for relying on commercial operators is flawed.  Their decision not to outsource these efforts is a result of an “apples-to-oranges” comparison.

Part of the reasoning behind Sears’ analogy can be credited to the DoD not including cost delays in their assessments.  This was underscored by the Air Force’s Family of Advanced Beyond Line of Sight Terminals (FAB-T), which initially belonged to Boeing, but was then re-competed and awarded to Raytheon resulting in program delays that ultimately have to be taken into consideration when judging the real cost-effectiveness of a mission

The bottom-line is that the DoD isn’t accounting for what it takes to truly deliver a complicated system of this nature, she said.

“They’re looking at (a) cost to buy, and a cost to lease, and they’re comparing the two like its apples to apples, and it’s not,” said Sears in the Defense Daily article. “Our costs include all of those things (necessary for providing a leased service). We’ve already delivered the satellite, we’ve already launched it. There are already terminals. It’s a complete service (and) it’s ready to go. That’s not what he’s comparing it to.”

As the DoD will continue to face tighter budgets at the same time that national security missions are increasing on a global scale, commercial partners can provide the most ideal solutions that are nimble and highly effective – for both short- and long-term projects.

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