Steve Spengler, president and CCO of Intelsat. Photo: Intelsat

[Via Satellite 12-30-13] On Friday Dec. 27, 2013, United States President Obama signed into law the FY2014 National Defense Authorization Act, which has broad implications for the space industry. One salient impact comes from Section 913, which now requires the Department of Defense (DOD) to provide briefings to congress on strategies for multi-year procurements of commercial satellite services. The DOD has 90 days from the passing and signature of the bill to present how it can use longer contracts in place of year-by-year procurements. The agency will then be tasked with applying the results of the study to potential future policies.

“I think that probably the most important element is how do industry and the DOD engage together to take a strategic approach to satellite communications, so that the DOD puts together long-term strategic plans that include government assets as well as commercial assets?” Steve Spengler, president and CCO of Intelsat, told Via Satellite. “Government customers are extremely unique — especially the DOD because the requirements are almost always mission-critical. They are extremely dynamic — the requirements could develop in various parts of the world at any time, and therefore flexibility on how to put assets in place, whether government or commercial, to meet those requirements is absolutely critical. So we’re very gratified to see that the work that the industry has been doing with the DOD is resulting in this language in the bill. It’s a positive step forward.”

In addition to studying multi-year licensing, the bill also prompts the DOD to analyze hosted payload opportunities. Intelsat released a media advisory statement before the bill was passed that commended Congress for putting these steps forward as a move toward fulfilling the DOD’s Better Buying Power 2.0 Initiative. These steps are designed to help smooth out the government procurement process for both sides. Intelsat has worked with other satellite industry leaders to provide idoneous guidance on relevant issues like this to the government with a collective voice.

“A little bit earlier this year a group of satellite operators got together and put together a white paper called Seven Ways to Make the Department of Defense a Better Buyer of Commercial Satcom, and it lays out seven different points that the DOD should consider in its procurement, acquisition and budgeting policies to become smarter buyers,” said Spengler. “We were one of the signers of that white paper, but other operators like SES, Eutelsat, Telesat, and Xtar all signed on. That was a formal action we took earlier in the year, but this is a continuing dialogue between industry and the DOD and the people on Capitol Hill.”

Intelsat has worked together with other companies in the satellite industry to voice similar concerns to the government in the past. As a founding member of the Hosted Payload Association, the company started a dialogue on hosted payloads not just with the DOD, but also with the government as a whole. “That organization has run seminars and workshops and has reached out and advocated to potential hosted payload buyers, said Spengler. “The end result of all of that is that the U.S. Air Force has issued a Request for Proposal (RFP) called HOPS … and created a procurement vehicle to allow government entities in general to buy hosted payloads from commercial operators.”

Intelsat cites the Australian Defense Force (ADF) as an example of how this system has worked with international customers, and how streamlined procurement methods have resulted in cost savings.

“We won a contract with the ADF several years ago. We designed and incorporated an ADF payload on our Intelsat 22 payload,” said Spengler. “It’s a very interesting model. The hosted payload was completely owned by the Australians. It’s their payload on that satellite to own and operate. They have stated publically in the press in Australia that working with Intelsat on that hosted payload not only gave them capabilities in space much faster than if they had done it themselves or done their own major procurement, but also saving them over AU$150 million compared to what they would have had to do on their own.”

Examples of successful implementations of these policies in other countries should spur the DOD toward similarly effective policies in the U.S. Within a few months, the satellite industry should know how the agency plans to make better use of satellite communications solutions from the commercial sector, according to Spengler.

“We have what we believe is our responsibility to educate, advise and advocate on ways the DOD can be more effective in its use of satellite services from commercial space,” he said. “The dialogue with the government sometimes takes time to create change and to deliver new ideas, but it works in the sense that it is a very interactive, respectful engagement, and the government in the case of the DOD here recognized the strategic importance of the commercial industry, and that’s why we see movement.”