DOD currently uses both military and commercial SATCOM to meet its global communications requirements. DOD leases commercial SATCOM to meet outstanding military SATCOM requirements, to satisfy users who need a disproportionate share of military satellite resources, and to continue to provide capability to the military services using commercial- band-only equipment. The military SATCOM architecture consists of three segments: a protected segment that provides secure, jam resistant communications; a wideband segment, which supports Army mobile ground terminals and Navy ships and submarines, among other things; and a narrowband segment, which provides complementary capability to the other segments, such as beyond line-of-sight secure tactical communications capabilities. In comparison, the commercial SATCOM architecture consists of two segments—fixed and mobile satellite services—which provide functions similar to the military wideband and narrowband segments, respectively. There is no commercial counterpart to the military protected segment. DOD leases commercial SATCOM primarily though the Defense Information Systems Agency. DISA does not procure commercial SATCOM directly from satellite service providers; instead it buys commercial SATCOM through several competitively selected vendors, which in turn compete for work among individual service providers. Before September 11, 2001, the majority of DOD’s SATCOM capacity was provided by the Defense Satellite Communications System Phase III (DSCS III) program, a five-satellite military constellation. DSCS III capability was augmented by commercial SATCOM in support of US military operations abroad, such as Operation Desert Storm, and humanitarian relief efforts. The Wideband Global SATCOM (WGS) satellite system began replacing DSCS III in 2007, and each satellite provides about 10 times the capacity of its predecessor. In 2003, we found that while the process for acquiring commercial satellite bandwidth is fair to DOD’s vendors and their subcontractors, some major DOD users of commercial satellite bandwidth services were They viewed the process as being too dissatisfied with DISA’s process.lengthy, particularly for time-critical military operations, and they believed that the cost was too high. They also indicated that the contracts resulting from the process were often too inflexible. As a result, some users were bypassing the DISA process, either by formally obtaining a waiver or by procuring services without a waiver. By allowing users to bypass the DISA waiver process, DOD was hampering its ability to ensure that its communications networks were interoperable and to minimize redundancies. We also reported that DOD did not know exactly how much it was spending on commercial satellite bandwidth services, nor did it know much about its service providers or whether customer needs were really being satisfied. Without this knowledge, DOD could not take steps to leverage its buying power, even though it was the largest customer for commercial satellite bandwidth. Moreover, neither DOD nor DISA were making a concerted effort to collect forecasts of bandwidth needs from users and ensuring those needs could be met by the commercial sector. These are also important steps toward optimizing DOD’s spending. We concluded that if DISA was to remain as DOD’s primary agent to acquire satellite bandwidth, it must implement a more strategic management approach—one that ensured that services could be acquired in a fair, timely, and cost-effective way that met users’ needs. Doing so would be a considerable challenge, however, given the environment at that time and the potential resistance within DISA and from its users. Commitment was needed from senior leaders within DISA and DOD to overcome challenges associated with implementing a strategic approach. Thus, we specifically recommended DOD implement a strategic management framework for improving the acquisition of commercial bandwidth, that, among other things, inventories current and potential users of commercial bandwidth to determine their existing and long-term requirements; identifies and exploits opportunities to consolidate bandwidth requirements of combatant commanders, the military services, and defense agencies; and adopt commonly used commercial practices, such as conducting spend analyses and negotiating pricing discounts based on overall DOD volume, to strengthen DOD’s position to acquire bandwidth; and finally, improve the current funding structure by considering new funding approaches such as centralized funding of commercial bandwidth, and seeking legislative authority for multi-year procurements. Our recommendations were based on practices of organizations that have successfully applied strategic sourcing techniques to their procurements of services. These include establishing a central agent or manager for acquiring services, gaining visibility over spending, and revising business processes to enable the organization to leverage its buying power. Since our 2003 review, we have updated this work and found that leading companies still adhered to principles such as centralized management for procurements of services but also have been able to obtain considerable savings in their purchases of services by intensely analyzing their spending patterns and tailoring their procurement tactics to fit a particular service, depending on its complexity and the number of available suppliers. For a service such as commercial bandwidth, for example, companies typically leverage scale and volume across their organizations, use fixed price contracts, identify market trends to target savings opportunities, develop procurement catalogs with pre-negotiated prices for some services, and vary bidding parameters such as volume, scale, different contract lengths in order to find new ways to reduce costs. At the time of our 2003 review, DOD generally agreed with our recommendations. As part of our 2006 review, we found that DOD had taken several actions to develop a new approach for procuring For example, it developed an approach to commercial satellite services. embrace strategic sourcing techniques; it analyzed the costs and benefits of different procurement options; it made changes to its requirements and provisioning processes to improve responsiveness and aggregate bandwidth and it began seeking feedback from industry on different contracting approaches. Additional actions DOD has taken since our 2003 and 2006 reports, and the status of these actions, are discussed later in this report. Though actions were taken in response to our earlier reviews of procurements of commercial SATCOM and DOD has embraced the need to be more strategic in its procurements of bandwidth, DOD is still challenged by a fragmented and inefficient process, similar to our 2003 findings, as the process has been overwhelmed by the demands of recent military operations, among other factors. DOD has an agency-wide acquisition policy that requires DISA to procure all commercial SATCOM. DOD has not enforced this policy, however, which has resulted in a procurement approach that is largely fragmented. That is, some DOD components independently procure commercial SATCOM to meet their individual needs, rather than relying on DISA. A recent Air Force Space Command study found that despite DOD’s high dependency on commercial SATCOM to fill significant capability gaps for its warfighters, the department continues to procure commercial SATCOM inefficiently—purchasing commercial SATCOM on the spot market by various DOD components and managed in isolation from one another. This has resulted in commanders having limited situational awareness, control, and oversight of the commercial SATCOM resources. Additionally, these procurements limit opportunities for sharing commercial SATCOM among components and for creating savings by streamlining purchases. More specifically, guidance from the Joint Chiefs of Staff (Joint Chiefs) states DISA is to procure commercial SATCOM for all DOD customers. Once procured, U.S. Strategic Command (Strategic Command), the DOD agency responsible for providing satellite capability for military operations, assumes operational responsibility of the commercial SATCOM. Although this policy sets the foundation for a centralized commercial SATCOM acquisition and management approach, according to DISA and Strategic Command officials, neither entity has enforcement power to ensure the combatant commands and military services adhere to it. According to DOD officials, some combatant commands and military services believe they can acquire commercial SATCOM faster, better, and cheaper than DISA. When DOD components procure commercial SATCOM outside of the DISA process, the department ends up paying more than needed for commercial SATCOM. For example, DOD reported in its most recent commercial SATCOM usage report that the average cost for commercial capacity leased though DISA was 16 percent lower than comparable services not acquired through DISA.report, approximately $280 million or about 32 percent of fixed satellite commercial SATCOM services was procured outside of DISA, in conflict with current DOD policy. As shown in figure 1 below, a significant portion Additionally, according to the same of commercial SATCOM is procured independently by DOD components, and not through DISA, as DOD policy requires. This fragmented approach to acquiring commercial SATCOM places DOD at risk of not leveraging its own buying power through efficiencies, such as bundling acquisitions. Although adherence to the Joint Chiefs guidance to procure commercial SATCOM through DISA has improved in recent years, as shown in figure 1, according to DOD officials, some DOD users still view the requirement as cumbersome and bureaucratic. Since 2001, four specific events have contributed to fragmentation in DOD’s commercial SATCOM acquisitions. First, following September 11, 2001, the U.S. military experienced a dramatic increase in forces supporting U.S. military Operation Enduring Freedom in Afghanistan and Iraqi Freedom in Iraq. To support these efforts, DOD needed significantly more SATCOM capability to support military operations. From 2000 to 2011, DOD reported that its reliance on commercial SATCOM rose by over 800 percent. Second, prior to the first Wideband Global SATCOM satellite launch in 2007, DOD had limited SATCOM capacity through DSCS III in the Middle East region. The buildup in forces in Afghanistan and Iraq, combined with the lack of on-orbit WGS capability, resulted in several combatant commands and military services investing in commercial- band-only end user equipment to support ongoing military operations. Third, DOD deployed new weapon systems, such as unmanned aerial vehicles and other intelligence, surveillance, and reconnaissance platforms that were originally designed to work with commercial systems. Because these platforms consume large amounts of bandwidth, support high-priority missions, and will only operate with commercial band services, commercial SATCOM procurement was further fragmented.