GAO says Defense unsure of satellite costs

The General Accounting Office has released a study that finds the
Defense Department "does not know exactly how much it is spending on
commercial satellite bandwidth services."

However, the process
for acquiring satellite services is fair to the department's vendors and
their subcontractors, the GAO found.

The study, "Strategic Approach Needed for DoD's Procurement of
Commercial Satellite Bandwidth," was produced at the request of the
Readiness and Management Support Subcommittee of the Senate Armed
Services Committee.

The Defense Department regularly leases commercial satellite bandwidth
through the Defense Information Systems Agency to augment its own
network of ground- and space-based communication systems. DISA procures
bandwidth from competitively selected vendors.

"We found that DISA is doing a good job of getting competitive service
at the contractor and subcontractor levels," said Bill Woods, director
of acquisition and sourcing management at the GAO. "But the process that
it is using misses out on opportunities to consolidate purchasing and
get better, less expensive service for DoD users."

Of 53 bandwidth orders placed through DISA from March 2000 to June 2003,
the GAO found that 48 were placed under a multiple-award contract known
as the Defense Information Systems Network Satellite Transmission
Services-Global (DSTS-G). The remaining five DISA orders were placed
under an older, single-vendor contract.

But according to the GAO's findings, several users of commercial
satellite bandwidth within Defense Department were dissatisfied with the
DISA process. They said it costs too much and takes too long to procure
the necessary bandwidth. As a result some users obtain a waiver to
bypass the DISA process or simply circumvent DISA altogether.

The GAO found that at least 20 percent of the Defense Department's
reported spending on commercial satellite bandwidth came outside regular
procurement channels.

Bypassing DISA means the Defense Department cannot ensure that its
communications networks are interoperable, according to the GAO report.
And by not accurately tracking what it spends on commercial satellite
services, the department cannot leverage its buying power.

The GAO report recommends the Defense Department take various steps to
implement a more strategic approach to procuring commercial satellite
bandwidth, including getting a better handle on current and future
bandwidth needs and conducting spend analyses to help negotiate price
discounts.

In a letter to the GAO, the Defense Department agreed with most of the
GAO's recommendations but pointed out that efforts to lease bulk
quantities of commercial satellite bandwidth ran counter to its "acquire
as needed" approach to procuring satellite services.