Defense Satellite Communications:
DOD Needs Additional Information to Improve Procurements
GAO-15-459: Published: Jul 17, 2015. Publicly Released: Jul 17, 2015.
What GAO Found
The Department of Defense's (DOD) procurement of commercial satellite communications (SATCOM), or bandwidth, is fragmented and inefficient. Historically, commercial SATCOM was used to augment military capability, but DOD has become increasingly reliant on commercial SATCOM to support ongoing U.S. military operations. DOD policy requires all of its components to procure commercial SATCOM through the Defense Information Systems Agency (DISA), but GAO found that some components are independently procuring SATCOM to meet their individual needs. DOD's most recent SATCOM usage report estimates that over 30 percent of commercial SATCOM is bought independently by DOD components, even though DOD found the average cost of commercial SATCOM bought through DISA is about 16 percent lower than independently bought commercial SATCOM. Fragmentation limits opportunities for DOD to bundle purchases, share services, and streamline its procurement of commercial SATCOM.
DOD recently completed two studies aimed at identifying the appropriate future mix of military and commercial SATCOM and predicting future SATCOM needs, however, the reports are partially based on incomplete data. First, the 2014 Satellite Communications Strategy Report did not identify the appropriate future mix of military and commercial SATCOM; rather, it outlined a plan that, if successful, may allow DOD to do so at a later time. Second, the 2014 Mix of Media Report based its predictions of future SATCOM requirements and demand on DOD's SATCOM Database, which DOD officials acknowledge lacks comprehensive usage and demand data.
DOD is taking steps to improve its SATCOM procurement and address challenges through “pathfinder” efforts aimed at identifying short- and long-term options. For example, DOD intends to study the potential benefits of using innovative contracting approaches as it procures military and commercial SATCOM, and refine its understanding of DOD's global SATCOM requirements. However, it may be several years before DOD is able to evaluate the results of its pathfinder efforts. For example, all of the 10 pathfinders planned or already underway are expected to be completed in or beyond fiscal year 2017. DOD's efforts to improve its procurement of military and commercial SATCOM will also be hampered by two long-standing challenges—lack of knowledge of what DOD is spending on commercial SATCOM and resistance to centralized management of SATCOM procurement—both of which GAO reported on and made recommendations to improve in 2003—regarding commercial SATCOM. Specifically, GAO recommended that DOD strengthen its capacity to provide accurate and complete analyses of commercial bandwidth spending and implement a strategic management framework for improving the acquisition of commercial bandwidth. DOD generally concurred with GAO's 2003 recommendations and developed a plan to address them, but none of DOD's corrective actions was carried out as intended. These challenges are commonly faced by organizations seeking to strategically source procurements of services, but they can be overcome by employing best practices, which include conducting detailed spend analyses and centralized management of service procurements to identify procurement inefficiencies and opportunities.
Why GAO Did This Study
DOD depends on commercial SATCOM to support a variety of critical mission needs, from unmanned aerial vehicles and intelligence to voice and data for military personnel. In fiscal year 2011, the most recent information available, DOD spent over $1 billion leasing commercial SATCOM. In prior work, GAO found that some major DOD users of commercial satellite bandwidth were dissatisfied with DISA's acquisition process seeing it as too costly and lengthy. These users also indicated that the contracts used were too inflexible.
The Senate Armed Services Committee's report accompanying the National Defense Authorization Act for Fiscal Year 2014 included a provision for DOD to report on the future mix of military and commercial SATCOM and for GAO to review DOD's report, issued in August 2014. This report (1) assesses the extent to which DOD efficiently procures bandwidth, (2) analyzes the extent to which DOD has identified its future SATCOM requirements using DOD and commercial satellite services, as well as how those requirements will be met, and (3) identifies the steps DOD is taking to improve its procurements of commercial SATCOM.
To conduct this work, GAO reviewed DOD's reports, DOD SATCOM procurement guidance, prior GAO reports, and interviewed DOD officials.
What GAO Recommends
GAO recommends that DOD (1) enforce current policy requiring DISA to acquire all commercial SATCOM; (2) conduct a spend analysis identifying procurement inefficiencies and opportunities; and (3) assess whether further centralization of commercial SATCOM procurement could be beneficial. DOD concurred.
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Recommendations for Executive Action
Comments: DOD concurred with this recommendation. DOD partially addressed our recommendation when it published Instruction 8420.02 in September 2016, establishing policy, assigning responsibilities, and providing direction on the management of its SATCOM resources. Among other things, DOD's Instruction 8420.02 prescribes methods by which DISA and the DOD Chief Information Officer (CIO) can obtain and analyze data that could inform commercial SATCOM resource usage, allocation, and requirements, and it further specifies the actions DOD component heads should follow in requesting commercial SATCOM capability through DISA. However, it is unclear the extent to which this policy has aided DOD in adhering to the existing requirement that DISA is to acquire all commercial SATCOM for DOD. For example, we reported in 2015 that 32 percent of the fixed satellite services DOD procured in fiscal year 2011 were procured outside of DISA (Note: at that time, data from fiscal year 2011 was the most current data DOD could provide). Our analysis of data contained in a November 2017 report by the DOD CIO, shows this condition worsened slightly from fiscal years 2011 to 2016, with roughly 35 percent of fixed satellite services procured outside of DISA in fiscal year 2016--a practice in conflict with current DOD policy. The DOD CIO report includes analyses, conclusions and recommendations, one of which mirrors our 2015 recommendation, and reiterates our findings at that time that contracts procured through DISA have resulted in a lower cost compared to contracts procured outside of DISA. While establishing a new policy to emphasize and assign SATCOM procurement responsibilities is a step in the right direction, policy requiring that DISA acquire all commercial SATCOM for DOD existed at the time of our 2015 report. Without adhering to the policy requiring DISA to procure all commercial SATCOM, DOD remains at risk of perpetuating the costly and inefficient individualized approach of contracting for commercial SATCOM services.
Recommendation: In order to improve DOD's procurement of SATCOM, to address DOD's fragmented procurement of commercial SATCOM, to better position DOD to identify needs, manage and acquire commercial SATCOM, and to address the incomplete data on commercial SATCOM spending and demand, the Secretary of Defense, in coordination with the Joint Chiefs, U.S. Strategic Command, combatant commands, military services, and DISA, should enforce current policy requiring DISA to acquire all commercial SATCOM for DOD.
Agency Affected: Department of Defense
Status: Closed - Implemented
Comments: U.S. Strategic Command issued its Fiscal Year 2014 Commercial Satellite Communications Usage report in October 2016 which contains a spend analysis that identifies opportunities for consolidation and improvement of commercial satellite communications procurement. Specifically, the report identifies expenditures and usage by satellite communications services (both fixed and mobile), vendor, owner, mission, contract type and satellite operator, among others. The report recommends several areas for improved procurement, including increased use of global managed services and higher throughput satellites.
Recommendation: In order to improve DOD's procurement of SATCOM, to better leverage DOD's buying power and help DOD understand its military and commercial SATCOM spending, and enable DOD to reform its commercial SATCOM acquisition and management processes, the Secretary of Defense, in conjunction with the Air Force and DISA, should complement the pathfinder efforts by conducting a spend analysis that identifies procurement inefficiencies and opportunities to consolidate purchases. Specifically, the analysis should identify how much is being spent for which services, who the buyers are, who the suppliers are, duplicative contracts and opportunities to aggregate demand, and where the opportunities are for leveraged buying and other tactics to save money and improve performance.
Agency Affected: Department of Defense
Comments: DOD concurred with our recommendation. DOD noted that it intends to conduct an analysis of alternatives for future wideband satellite communications, considering both military and commercial satellite communications components, to provide a thorough evaluation of cost and effectiveness prior to any significant action changing how DOD procures wideband satellite communications. The analysis of alternatives is currently planned to be completed in fiscal year 2019.
Recommendation: In order to improve DOD's procurement of SATCOM, to better leverage DOD's buying power and help DOD understand its military and commercial SATCOM spending, and enable DOD to reform its commercial SATCOM acquisition and management processes, the Secretary of Defense, in conjunction with the Air Force and DISA, should complement the pathfinder efforts by conducting an assessment of whether further centralization of military and commercial SATCOM procurement, such as the identification of a single focal point within DOD to decide how to meet the overall demand or a central procurement knowledge focal point, could further save money and improve performance.
Agency Affected: Department of Defense