Success of a new satellite contracting approach may hinge on efficiencies.
The U.S. Defense Information Systems Agency is beginning a major scrub of user requirements as it proceeds with its new commercial satellite services acquisition process. The communications agency is taking a hard look at thousands of customer requirements to determine the validity of some against the necessity of others.
This action serves two purposes. One is to purge the list of obsolete requirements that might have served a purpose years ago, but now are not needed. The other is to eliminate redundancy among similar requirements. Both goals aim at streamlining the contracting process and providing more efficient service to agency consumers.
These efforts are part of the next stage in the Defense Information Systems Agency’s (DISA’s) Future Commercial Satellite Communications Services Acquisition (FCSA) effort. The FCSA replaces legacy satellite services procurement mechanisms with an eye toward increasing competition and providing better and more cost-effective services to federal government users (SIGNAL Magazine, January). The first phases that transitioned services from legacy contracts to the new contract vehicle began in February. These include transponded capacities on Schedule 70 under special item number (SIN) 132-54; subscription services on Schedule 70 under SIN 132-55; and a customer end-to-end solution that should be on contract next month.
Col. Michelle Nassar, USA, chief of the Communications Satellite Communications Center (COMSATCOM CENTER) at DISA, notes that the February transition took place without any loss of services. Complicating this effort was the migration of several relevant offices to the network services effort, along with DISA’s move from Arlington, Virginia, to Fort Meade, Maryland. As of July 1, a total of 51 task orders have been awarded on Schedule 70 SIN 132-54, and their life cycle costs are worth about $1.2 billion, the colonel adds.
William L. Guthrie III, project manager, FCSA transition, explains that changes in the federal acquisition regulations have been a major challenge in the transition. Under the old system, Defense Information System Network (DISN) Satellite Transmission Services-Global (DSTS-G), DISA had a waiver from some federal acquisition requirements. The FCSA requires compliance with new acquisition regulations, however, and this entailed a learning process in both DISA and its user community.
“Before, we had three core vendors primarily competing; and now, we have 13 vendors awarded on Schedule 70,” Col. Nassar points out. Ten vendors are contracted for transponder capacity on SIN 132-54, and 12 have been awarded for subscription services. Guthrie adds that these additional vendors provide a much more robust capability than DISA ever has had, and this is reflected by increased satisfaction among the user community, particularly in regard to mission needs.
The first awards for subscription services are scheduled for November. In listening to feedback from customers on their requirements for subscription services, DISA learned that customers largely want to be supported by one vendor. Their reasons focused on mission requirements, continuity and efficiency. These customers also wanted a dashboard capability that would allow them to look into their services more readily, particularly for aspects such as usage rate, type of capability use and service management.
The agency received approval in May to offer blanket purchase agreements (BPAs) for subscription services. These nine BPAs offer different types of service based on unique requirements. Each BPA will have a large number of requirements—as many as 300 or more—designed to support mission requirements and service needs. This structure aims to provide more competition and better pricing for customers. Each BPA contract will consist of one base year and four option years.
Each BPA also will have a contract line item number (CLIN) for emerging technology, Guthrie notes. If a new technology emerges in the future, that CLIN can enable the contract to acquire that emerging technology for the customer instead of performing an entirely new acquisition.
“This is a whole different strategy, and we are very excited about it,” Guthrie says of the BPA approach. “It’s a new way of doing business, not only for us but also for our user community.”
A BPA for the U.S. Army will be the first one released. The following eight will follow in pairs, with the last pair scheduled to be released in May 2012. As soon as the BPAs are awarded, DISA will begin transitioning the services from the current Inmarsat contract to the new FCSA subscription services structure. “Once that BPA awardee is identified, all those requirements will be awarded directly to that BPA winner,” Guthrie explains.
However, this approach is not without difficulty. The sticking point in these subscription services contracts is the number of customer requirements. This is where DISA is striving to clean up years of accumulated requirements that may not be needed any longer.
“We don’t expect this to be an easy transition,” Col. Nassar says.
The colonel adds that approximately 8,000 requirements reside on the old contracts. This large number of requirements would have to be transitioned to the new FCSA, and DISA needs customers to confirm whether those are still needed. “We need customer support in identifying what requirements truly need to move forward and what can be terminated,” she states.
She does not know what the final number of valid requirements will be, nor does DISA have a target number in mind. However, about 2,500 task orders have not been used. With warfighters regularly rotating in and out of the field, the positive control of the owner of a service might be lost. The agency does not want to turn off a service that might be needed; however, if a service has not been used in five years, then that service might not be needed any more. But, DISA wants to hear that determination directly from the customer.
Guthrie explains that DISA will ask users to validate each individual service prior to the transition. That validation will confirm that a requirement needs to be transitioned to the new contracting vehicle and that it will be used. Once that transition takes place, users will have more positive control over requirements than they currently have, he offers.
DISA’s approach to the subscription services contracts has been influenced by its experiences with the other aspects of the FCSA over the past few months, Guthrie offers. The process is different than what the agency did with the transponder capacity, so it had to adjust internally to modify some of its in-house information technology systems.
As with all networking activities, information assurance remains a challenge. DISA is focusing heavily on it for subscription services, which constitute the upcoming FCSA stage, Guthrie says. The new contracting process and infrastructure are helping DISA comply with department information assurance policies. The FCSA allows DISA to acquire the necessary resources to integrate information assurance processes into contracts. “Because of the new contract, we were able to put in the infrastructure where [information assurance] is more readily integrated into the process,” Guthrie states.
Col. Nassar offers that both customers and contractors are working well within the new FCSA vehicle. “I have been pleasantly surprised at how well industry has embraced this vehicle,” she says. “People have come up and given us a pat on the back, saying ‘you guys are doing a great job, and this [FCSA] is really a great thing—it’s great for industry and it’s great for the customer, because it has opened the doors to everybody.’”
She emphasizes that costs are in line with commercial satellite market rates. Decrying some estimates that prices have risen as much as 300 percent, she states that they have not soared as a result of the new vehicle. DISA analysis performed on the original 35 FCSA task orders shows that their prices are similar to prevailing market prices in recent years overall.
The colonel acknowledges that some prices have increased, but she attributes these to specific influencing factors. Many of these contracts were put together a few years ago when available satellite supply was high and demand was low, hence conditions favored buyers. Now, the reverse largely is true: demand is up, and bandwidth supply is tight. The price differential over the past six years is much greater than the differential over the past two years.
The original services contracted six years ago came at a deep discount, Col. Nassar continues. Generally, satellite service costs have increased by 9 percent annually in recent years. DISA’s contracting is in line with that, she adds, although some regions have risen more in price because of significant bandwidth demand growth. Also, customers’ requiring a directed source limits competition and drives up costs. The prices customers are paying today would be the same even without the transition to the FCSA, she declares, and FCSA competition should help keep prices in check.
The key to the success of the FCSA approach is communication among DISA, the customer, the vendor and the contracting office, the colonel states. While she thought DISA was communicating effectively, she believes that the agency needs to do a better job, in part because of personnel moves that prevented vital information from being communicated effectively.
FCSA Schedule 70 Customer Ordering Guide: www.disa.mil/satcom/sco/files/CustomerOrderingGuide_1-26-11.pdf