Though it won’t completely outsource satellite communications (SATCOM) capability to industry, the commercial side is still in the Defense Department’s long-term plans because the rules are in industry’s favor, according to a representative from the Pentagon’s Cost Assessment and Program Evaluation (CAPE) office.
“As the rules are structured, it’s very advantageous as a solution,” Steven Miller, director of advanced systems cost analysis, Office of the Secretary of Defense (OSD)/CAPE, said Monday at the Satellite 2014 convention in Washington. Satellite 2014 is produced by Defense Daily parent company Access Intelligence LLC.
Miller said though industry was in its long-term SATCOM plans, DoD won’t completely outsource SATCOM capability because it hasn’t been able to prove it’s a better deal than procuring its own satellites. Miller said if the product being bought is a “very short, transient” thing, then it makes sense to procure commercial service systems. But in the long run, Miller said, if it is something that is going to be owned and operated in the long haul, it’s extremely difficult to make that business case.
Miller’s remarks came in response to a panel question by Kay Sears, CEO of COMSATCOM provider Intelsat General. Sears said commercial industry is launching communications satellites as complicated as the government’s and industry provides satellite communications “well.” Sears asked why the government doesn’t just outsource SATCOM.
“We can clearly buy these systems more cost effectively than if having someone else” provide, Miller said in response. “It’s as simple as that.”
Sears told Defense Daily after her panel that DoD’s decision not to outsource SATCOM is due to “apples-to-oranges” comparisons. Sears said DoD doesn’t include costs for delays into their assessments. The Air Force’s Family of Advanced Beyond Line of Sight Terminals (FAB-T) program is an example of a long-delayed DoD satellite communications program that is to provide terminals that will allow the president and DoD brass to communicate in the event of nuclear war. A FAB-T contract was originally awarded to Boeing [BA] in 2002, but the Air Force became concerned it wouldn’t be able to deliver, so it reopened the competition years later, allowing Raytheon [RTN] to compete for the program.
Sears asked, not referring to FAB-T, what is the cost to a program that has no terminals for two years or is eight years late. She said DoD isn’t accounting for what it takes to really deliver a system.
“They’re looking at cost to buy, and a cost to lease, and they’re comparing it like its apples to apples, and it’s not,” Sears said. “In our costs are all of those things. 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.”