Defense overpays for satellite time, GAO says

The Defense Information Systems Agency's mandate to lease commercial satellite bandwidth for the military commands, though fair, is inflexible and wasteful, a General Accounting Office study said this week.

The Defense Department 'does not know exactly how much it is spending on commercial satellite bandwidth services, nor does it know much about its service providers or whether user needs are being satisfied,' GAO said in 'Strategic Approach Needed for DOD's Procurement of Commercial Satellite Bandwidth.' (pdf)

The auditors found that neither the department nor DISA forecasts bandwidth needs and cannot leverage buying power to get better prices than the spot market offers [see story at].

As the industry's biggest customer, DOD spends an estimated $400 million per year on satellite services.

DISA's Defense IT Contracting Organization buys satellite services through two contracts:
  • Managed Transponder Contract held by Lockheed Martin Global Telecommunications

  • Defense Information Systems Satellite Transmission Services-Global contract under which Artel Inc. of Reston, Va., Arrowhead Global Solutions Inc. of McLean, Va., and Spacelink International of Dulles, Va., compete for task orders.

  • Defense buyers can order anywhere from one hour to three or more years of service with extras such as host nation approvals and landing rights. DISA and DITCO apply an 8 percent surcharge.

    Because DISA's larger users view the acquisition process as high-priced and time-wasting, many are obtaining waivers or bypassing DISA to procure services on their own, the auditors said.

    The Army in 2001 acquired satellite communications for Operation Enduring Freedom at $34,700 per month, GAO said, whereas DISA had priced its services at $139,000 per month.

    'In fiscal 2002, nearly 20 percent of DOD's reported spending on satellite bandwidth services occurred outside the official mandate,' the auditors wrote. 'DOD is hampering its ability to ensure that its communications networks are interoperable and to minimize redundancies.'


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