	Background

DOD has for many years augmented its internally owned and operated  satellite communications capability by leasing additional external  telecommunications capacity on commercially owned and operated  satellites. Demand has been increasing in recent years, as the military has  come to rely more heavily on commercial satellite communications to plan  and support operations and move toward a network-centric warfare  environment. DOD leases commercial satellite bandwidth services primarily through  DISA and its Defense Information Technology Contracting Organization  (DITCO). DISA does not acquire commercial bandwidth directly from  satellite service providers. Instead it procures bandwidth through several  competitively selected vendors, which in turn compete work among  individual bandwidth service providers. DOD’s Process Is Fair to Both Vendors and Service Providers

DOD’s process through DISA for acquiring commercial fixed satellite  service bandwidth is fair to both its vendors and their subcontractors,  which are the ultimate commercial satellite bandwidth providers. Some Major Users Are Dissatisfied with DISA Process for Acquiring Commercial Satellite Bandwidth Services

Some major users of commercial satellite bandwidth services are  dissatisfied with the DISA process. In particular, they view the process  as being too lengthy and costly. They also believe that the process  results in contracts that are often too inflexible. For fiscal year 2002, we determined  that, at a minimum, nearly 20 percent of DOD’s reported spending on  services occurred outside the process, and one DOD official stated that the  true percentage is probably much higher. Some Users Are Bypassing the DISA Process to Get Timely, More Flexible, and Less Costly Services

Some users are bypassing the DISA acquisition process to acquire  commercial bandwidth through alternative processes, either by formally  requesting a waiver from the DISA process or by improperly procuring  services without a waiver. Moreover, neither DOD nor DISA is making a  concerted effort to collect forecasts of bandwidth needs from users,  ensure those needs can be met by the commercial sector, and take steps  needed to leverage its buying power with commercial providers. Moreover, by allowing users to  bypass the DISA waiver process, DOD is hampering its ability to ensure  that its communications networks are interoperable and to minimize  redundancies. If DISA is to remain as DOD’s primary agent to acquire  satellite bandwidth, then it must implement a more strategic management  approach—not only one that continues to ensure that acquisitions are  processed fairly, but also one that ensures services can be acquired in a  timely and cost-effective way that meets users’ needs. Doing so will be a  considerable challenge, however, given the current environment and  potential resistance within DISA and from its users. Commitment is  needed from senior leaders within DISA and DOD to overcome challenges  associated with implementing a strategic approach. To ensure the successful implementation of this strategic management  framework and to better leverage DOD’s buying power and increase  user satisfaction, we recommend that the Secretary of Defense direct  the Assistant Secretary of Defense for Networks and Information  Integration to    develop performance metrics to assess user satisfaction with the  timeliness, flexibility, quality, and cost in acquiring commercial satellite  services;    strengthen DOD’s capacity to provide accurate and complete analyses of  commercial bandwidth requirements, spending, and the capabilities of  commercial satellite providers by enhancing core internal technical  expertise and information systems; and    assess, and implement as needed, changes to the key elements of the  existing acquisition process—including requirements generation, solution  development and evaluation, and contract vehicles—to facilitate a more  strategic approach to bandwidth acquisition.
Why GAO Did This Study

In recent years, the Department of Defense (DOD) has come to rely more heavily on commercial satellite communications to plan and support operations and move toward a network-centric warfare environment. DOD acquires commercial satellite bandwidth services to support a variety of critical missions such as surveillance performed by unmanned aerial vehicles. GAO was asked to assess (1) whether DOD's process for acquiring these services is fair to vendors and providers, (2) whether the process meets users' needs, and (3) whether spending on these services is managed effectively and efficiently.

What GAO Found

DOD has for many years augmented its internally owned and operated satellite communications capability by leasing commercial fixed satellite bandwidth services primarily through the Defense Information Systems Agency (DISA) and its Defense Information Technology Contracting Organization (DITCO). DISA does not acquire commercial bandwidth directly from satellite service providers. Instead, it procures bandwidth through several competitively selected vendors, which, in turn, compete work among individual service providers. GAO found that the process for acquiring commercial satellite bandwidth is fair to DOD's vendors and their subcontractors, which are the ultimate commercial satellite bandwidth service providers. However, some major DOD users of commercial satellite bandwidth services are dissatisfied with DISA's process. They view the process as being too lengthy, particularly for time-critical military operations, and they believe that the cost is too high. They also indicated that the contracts resulting from the process are often too inflexible. As a result, some users are bypassing the DISA process, either by formally obtaining a waiver or by procuring services without a waiver. In fiscal year 2002, nearly 20 percent of DOD's reported spending on satellite bandwidth services occurred outside the process, and one DOD official stated that the true percentage is probably much higher. By allowing users to bypass the DISA waiver process, DOD is hampering its ability to ensure that its communications networks are interoperable and to minimize redundancies. Further, DOD does not know exactly how much it is spending on commercial satellite bandwidth services, nor does it know much about its service providers or whether customer needs are really being satisfied. Without this knowledge, DOD cannot take steps to leverage its buying power, even though it is the largest customer for commercial satellite bandwidth. Moreover, neither DOD nor DISA is making a concerted effort to collect forecasts of bandwidth needs from users and ensure those needs can be met by the commercial sector. These are also important steps toward optimizing DOD's spending. If DISA is to remain as DOD's primary agent to acquire satellite bandwidth, then it must implement a more strategic management approach--one that ensures that services can be acquired in a fair, timely, and cost-effective way that meets users' needs. Doing so will be a considerable challenge, however, given the current environment and potential resistance within DISA and from its users. Commitment is needed from senior leaders within DISA and DOD to overcome challenges associated with implementing a strategic approach.