$5B SatCom may augur DISA-GSA deals to come

Satellite service providers met with government procurement officials Oct. 22 to hear details about the upcoming $5 billion, 10-year Future ComSatCom Services Acquisition, and to proffer questions and concerns about this acquisition that could become a model for others to come.

With three satellite communications contracts set to expire over the next three years, the General Services Administration and the Defense Information Systems Agency agreed in July to partner to offer a single replacement: FCSA, a multiple-award schedule and indefinite-delivery, indefinite-quantity acquisition, open to defense and civilian agencies as well as state, local and tribal governments, public schools and colleges, and public authorities.

At the Oct. 22 FCSA industry day in Washington, Kevin Gallow, GSA’s FCSA program director, laid out the structure of the acquisition for the 110 contractor representatives attending.

Because buying transponded capacity and “plug-in” satellite subscription services is most easily done by individual task order, they will be available on the Federal Supply Schedule through two new special item numbers (SINs) on IT Schedule 70, Gallow said.

For the third tier of the contract covering custom end-to-end solutions and including leased bandwidth, teleport access, network, user equipment, integration services and network management, an IDIQ contract is more flexible and a better fit, he said. A separate industry day will be scheduled to discuss the solutions component of FCSA, he said.

Some changes likely will be made before the request for proposals, scheduled for the second quarter of fiscal 2010. But “I think this vehicle will work to get government a good deal without making it unprofitable for industry,” said Warren Suss, president of Suss Consulting LLC.

In drawing the contract, DISA and GSA have avoided provisions that have evoked complaints in other large services and solutions contracts. For example, ongoing “onramps” let companies that may have been turned down once, reapply, and there is no cut-off date for companies to qualify for a Schedule 70 SIN. The acquisition also allows for addition of new services and technologies over its 20-year lifespan.

“The continuous onramps are something DOD and the Pentagon really liked,” Suss said. “And they really liked the evergreen aspect because DOD and government don’t what to find themselves on a technological sidetrack, and they don’t what to have to redo the acquisition; this makes it a dynamic acquisition.”

FCSA offers no small business set-aside, Gallow said. But if agencies buy services from small businesses, they can still get credit toward the 6 percent of their business that they are supposed to award to small business.

Much of the information DISA and GSA provided was included in their August announcement. By holding the industry day and soliciting feedback from industry, the agencies showed a “strong will to get it right; right for government but right for industry as well,” Suss said.

The agencies may have further impetus for their diligence and attention to detail. “Industry is seeing this acquisition as a possible model for other DISA acquisitions,” Suss said. “There have been hints from government that DISA may what to partner with GSA on other contracts.”

Attendees, about half of whom represented companies not holding spots on existing satellite contracts Defense Information System Network (DISN) Satellite Transmission Service-Global (DSTS-G) and Inmarsat contracts from DISA and GSA’s SATCOM II, queried details on:

● Pricing. Ceiling prices equal to most favored commercial customer prices.

● Information assurance. At minimum equal to DISA’s Mission Assurance Category (MAC) III system, although individual task orders may require higher security MAC I or MAC II level information assurance.

● Capabilities required. Teaming is not only allowed but assumed, said Charles Edwards, DISA’s FCSA program manager. FCSA will provide global coverage, Gallow said, but individual “vendor service offerings do not have to provide global coverage.”

Contractors also sought greater specificity on other details. “Support services are expected, but the SIN doesn’t include a definition of them,” said Computer Sciences Corp. representative Lillian Elam.

Specifics will be defined as part of individual task orders, Edwards said. But the agency researched commercial practices to get an idea of what basic services comprise. “For example, we talked with the folks at NBC news, who require a great deal of bandwidth from the industry and they shared with us some of the things that they have in their service level agreement in terms of network monitoring,” he said.

FCSA will have extensive offerings, but not every satellite service under the sun will be included. Although not a competitor to provide services, as a satellite maker, Boeing Co. has an interest, especially in such services as hosted payloads, said the company’s Edward Laase. Hosted payloads, in which capacity on commercial satellites to be launched is offered to entities such as government agencies.

“We’ll be looking hard at whether hosted payloads would fit on the Schedule,” Edwards said. “I hope hosted payloads arrive soon because they present a great deal of potential for both the Defense Department and industry.” But until funds are allocated, it’s on the waiting list.

Schedule services on FCSA will be broken out to allow the widest feasible range of providers, both Gallow and Edwards said. For example, it includes four levels of responsiveness requirements, ranging from four hours to 90 calendar days.

And where equivalent commercial standards and/or best practices were unavailable, agency officials spelled out their expectations. “We have a requirement for portability,” Edwards said. “That’s something we’ve wrestled with for almost three years because there’s no generally accepted standard for portability in the commercial satcom industry.

“So we provided for you our understanding of portability as it applies to this, and please note it says subject to availability. We recognize that we might want to port from a transponder on a particular satellite to a transponder providing coverage in another region. If it isn’t available, we aren’t going to be able to accomplish that.”

Other efforts were made to streamline contractor participation. Although all companies will need to qualify for the new ComSatCom SINs, for those companies holding Schedule 70 contracts, qualification will be handled as a contract modification. For new qualifiers, a single process will encompass both Schedule 70 and ComSatCom SINs appliction.

Concerns over pricing, including initially locking in a price for 12 months in a changing pricing environment, and what some contractors referred to as government’s request for a double discount, recurred throughout the day.

Such concerns, especially those of contractors new to Schedule contracts, will likely be allayed as the acquisition proceeds, Suss said. “FSS is designed to give government good quality products and services at fair and reasonable prices,” he said. “And government procurement officials realize that prices change as a result of volume or quantity, market forces and other factors.”

What some called a “double discount” is more a two-step process, Suss said. Competitors first give a ceiling price equivalent to the rate they give their most favored commercial customer.

The volume of business on FCSA, expected to exceed $5 billion, warrants that rate, Edwards said. Fiscal 2008 spending was $261 million on DSTS-G, $75 million on Inmarsat and $40 million on SATCOM II, and although fiscal 2009 figures are not available, they are expected to be higher.

“Compared to big government acquisitions, Schedule prices are often higher because they offer no guarantees of purchase levels,” Suss said.

The second step comes with pricing an individual task order. “Both sides realize that with a higher volume, the price gets better,” Suss said.

Ensuring understanding on both sides is what the industry day and the feedback request are for, Edwards said. “Tell us if we’re doing this right in terms of pricing.”

Anyone interested in offering feedback or asking questions should do so by 5 p.m. Oct. 28. GSA and DISA Oct. 7 issued their request for industry feedback and recommendations on draft transponded capacity and subscription services SIN descriptions, terms and conditions, price examples and evaluation criteria.