Defense Satellite Communications:

Alternative to DOD's Satellite Replacement Plan Would Be Less Costly

NSIAD-97-159: Published: Jul 16, 1997. Publicly Released: Jul 16, 1997.

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GAO reviewed the Department of Defense's (DOD) plan to acquire a follow-on system to the Defense Satellite Communications System (DSCS), focusing on DOD's long-range plan to replace DSCS in fiscal year (FY) 2006 and its interim plan to replenish the DSCS constellation with satellites in the inventory, relative to satellite communication requirements.

GAO noted that: (1) during the next decade, DOD anticipates that its requirements for high-capacity satellite communications will increase significantly because of the: (a) shift in the national military strategy; and (b) increasing availability of advanced satellite communication technologies and services and DOD's desire to take advantage of such technologies; (2) DOD's Joint Requirements Oversight Council plans to review these requirements later this year; (3) DSCS' replenishment satellites, most of which are to have twice the capacity of the existing operational satellites, are not expected to keep pace with the projected requirements; (4) to the extent that these requirements are not satisfied by the system, the users' alternative would be to lease satellite communications from commercial providers; (5) funding for the replacement of the system in FY 2006 is to be requested starting in FY 2001; (6) meanwhile, the projected requirements are expected to continue increasing, which will force increases in the leasing of commercial satellite communication services to meet unsatisfied requirements; (7) a DOD analysis indicates that commercial leasing is more costly than acquiring equivalent commercial-like capabilities; (8) according to military satellite communications program representatives and studies, the first launch of a replacement satellite would be technically feasible in FY 2003; (9) GAO's analysis of the effect on costs of this 2003 alternative, compared to DOD's 2006 plan, indicates that the government could save about $2.8 billion in future years; and (10) the alternative, however, would require DOD to transfer about $945 million in planned funding from FY 2004-2006 to its FY 1999-2003 future years defense program.

Recommendation for Executive Action

  1. Status: Closed - Implemented

    Comments: DOD partially concurred with the recommendation. DOD is procuring five high capacity communication satellites (referred to as the Wideband Gapfiller System or WGS) for initial launching in 2004. These five satellites will significantly increase communications capacity, augment the existing Defense Satellite Communications System, and minimize expensive commercial leasing prior to the fielding of a more capable Advanced Wideband System beginning around 2008. This course of action was initially endorsed by the Joint Requirements Oversight Council (JROC) in October 1997, an operational requirements document, developed by the Air Force Space Command to support the acquisition, was approved by the JROC in May 2000, and the Defense Acquisition Board authorized WGS to proceed into a combined Milestone II/Production phase in November 2000. On January 2, 2001, a firm fixed price (FFP) contract, containing six FFP satellite options, was awarded to Boeing Satellite Systems (BSS). On January 31, 2002, the award of satellite 1 and 2 production options and the satellite 3 advance parts option was announced, marking the WGS program's transition from the engineering and manufacturing development phase to the production phase. The Air Force had originally planned to purchase 3 WGS satellites. In December 2002, the Deputy Secretary of Defense directed the Air Force to purchase two additional satellites for launch in fiscal years 2009 and 2010.

    Recommendation: Considering the: (1) anticipated increase in requirements for high-capacity satellite communications; (2) relative high cost of leasing commercial satellite communications and apparent cost-effectiveness of acquiring commercial-like satellites instead of leasing equivalent services from commercial providers; and (3) potential for significant long-term savings to the government, the Secretary of Defense should accelerate the introduction of a DSCS replacement system from FY 2006 to 2003, or as soon as practicable, if the emerging requirements are deemed valid, the estimated acquisition and commercial leasing costs are considered credible, and the necessary acquisition funds can be made available.

    Agency Affected: Department of Defense


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