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. According to industry sources, DOD’s current estimated $300-400 million spending on such services has made it the satellite communications industry’s biggest customer. 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. There are two primary contract structures through which DISA procures bandwidth through these vendors. The first is known as the Managed Transponder Contract (MTC). It was competitively awarded in 1995 to one vendor, and served as the primary acquisition vehicle for several years. The second is an indefinite-delivery, indefinite-quantity (IDIQ) multiple-award contract structure known as the Defense Information Systems Network Satellite Transmission Services-Global (DSTS-G) contracts. They were awarded competitively in February 2001, after users found the MTC contract to be inflexible, too costly, and limited in terms of the breadth of services it could provide. Awards were made to three small business vendors that acquire bandwidth for DISA from the ultimate service providers. Recently, DISA has been relying more on this second contract structure. The agency placed 48 orders for bandwidth under the DSTS-G contracts through June 2003 versus only 5 new orders under the MTC contract from March 2000 through June 2003. DISA’s vendors obtain satellite services from a commercial satellite industry market segment that has been growing at a high rate. The commercial satellite industry is a global industry that includes many foreign-owned businesses as well as partnerships between U.S. and foreign corporations. Table 1 lists major global and regional satellite bandwidth providers. While there are 10 companies listed, only 6 of them have provided needed bandwidth through the DISA acquisition process during recent years. The acquisition process that DISA uses to determine user requirements and acquire bandwidth is similar to the process it uses to acquire other telecommunications services for its customers. Generally, the process begins with users identifying a need and contacting DISA to fulfill that need. Technical experts within DISA assist users in engineering a potential solution. Other offices within DISA decide how the service should be procured and prepare a request for the vendors to propose solutions. Once DISA has determined which contract structure to use and has asked for proposed solutions, an evaluation team within DISA reviews the proposals and awards a task order or delivery order under the winning vendor’s contract. Figure 1 and table 2 further detail this process. If circumstances dictate, users can request a waiver through DOD’s Global Information Grid (GIG) Waiver Panel to use an alternative network and alternative acquisition process instead of the DISA process. A business case must be made for the requested waiver and there must be plans outlined to migrate the outlying network back under the telecommunications infrastructure and to bring the resulting contract under the control of DITCO. After a waiver is approved, the user’s procurement organization takes steps to procure the bandwidth. 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. The majority of bandwidth orders in recent years have been made under the DSTS-G contracts, where competition exists at both the vendor and service provider levels. Only five orders have been placed under the MTC contract, which by its nature is not as competitive as the DSTS-G contract, since it was designed to obtain service through one vendor. The Federal Acquisition Regulation (FAR), as supplemented by DOD and DISA, requires DITCO to provide a fair opportunity to the three DSTS-G vendors at the prime contract level. Generally, this entails writing broad, needs-based requirements able to be satisfied by multiple vendors rather than only one; providing notice and opportunity to be considered to each of the vendors; giving notice of the evaluation criteria to be used to select a winning evaluating proposals, conducting discussions, and awarding delivery orders or task orders in accordance with the evaluation criteria stated. We analyzed 48 task orders that were awarded under the DSTS-G contract from its inception in February 2001 through June 2003 to determine whether these criteria were generally followed. We found that the acquisition process employed by DISA and DITCO generally met FAR criteria, as supplemented, and was fair to competing vendors under the DSTS-G contracts. Though we found some orders awarded under exceptions established in FAR, the rationale for these exceptions was documented in each task order file. The common set of technical questions that users are required to answer when submitting their bandwidth requests helps not only to document their technical environment but also to preclude writing an overly narrow or restrictive requirement. While a few valid user situations demanded a repeat solution or narrowed the range of possible solutions, they did not unduly impair the vendors’ fair opportunity to compete. Of the 48 task orders for bandwidth, 41 were competed among the three vendors; six were renewals of previously competed task orders; and only one was sole-source, awarded without vendor competition. Documentation justifying the one sole-source action was included in the task order file, as required. The distribution of task order awards among the three vendors is illustrated in table 3. The table shows the number and percentage of the 48 task orders awarded to each of the three vendors under their respective DSTS-G contracts along with the associated dollar values and percentages. The evaluation criteria DISA used to select a winning vendor were contained in each inquiry that was competed. Evaluation of the proposals, discussions, and the award of task orders complied with the stated evaluation and selection criteria. DISA used the following two selection frameworks to evaluate proposals: DISA awarded 18 of the 41 competitive task orders worth $54,255,114 under a source selection process called “best value,” using a cost/technical trade-off process. Under this approach, the selection official trades off cost and non-cost factors, identified in the inquiry, in determining award decisions. In some cases, greater weight may be placed on a contractor’s technical approach resulting in the selection of what may not be the lowest priced proposal. DISA awarded the remaining 23 competitive task orders worth $78,645,239 under the “lowest price technically acceptable” framework. Under this approach, the technical solution proposals are all evaluated by DISA’s Commercial Satellite Communications Branch and its supporting contractor and placed in either a “technically sufficient” category or “not technically sufficient” category. The winner is that proposal in the “technically sufficient” category with the lowest total evaluated cost. While both evaluation methods are common under FAR procurements, best value with tradeoffs is more suitable where the risk of potential substandard performance does not leave room for errors or service degradation. Either method of evaluation requires a high level of technical expertise to effectively evaluate proposed solutions. At the subcontract level where the FAR criteria regarding fair opportunity generally do not apply to the business arrangements among commercial companies, we also found that commercial satellite service providers have had ample and fair chances to team with the three DSTS-G vendors to create solutions and to compete for and win subcontracts. All three vendors stated that they are motivated by competition to find technically sufficient and low-cost solutions to DOD’s needs and to involve all feasible service providers in doing so. Further, the vendors are also required by a FAR clause in their DISA contracts to select their subcontractors on a competitive basis. To determine which service providers are potentially capable of fulfilling a given DISA requirement, the vendors told us they consider many factors, such as location of satellites, “look angle” at the desired location, power, bandwidth, age and condition of satellites, available capacity on satellites, and other factors, such as meeting schedule, acceptance of government terms and conditions, business relationships, and prices. Our analysis showed that six different service providers have won subcontracts from one or more of the DSTS-G vendors. Each vendor has won task orders using at least four of the six providers, although more than 70 percent of the wins have been with just two providers. The distribution of task order awards to vendors and the service providers with which they teamed for each of the 48 task orders is illustrated in table 4. Another indicator of participation among service providers and access to the DSTS-G vendors is the opportunity to propose a solution for a DISA requirement. We determined that there were 211 bandwidth solutions proposed to DISA for the 48 task orders, or approximately 4.4 per task order. Removing the seven instances where there was only one proposed solution (because they were renewals of previously competed requirements or sole-source), the average number of proposed solutions per competitive task order was 4.9, with a range from 2 to 15. Moreover, there were several additional potential teaming proposals considered by at least one of the vendors, but not ultimately submitted to DISA. Table 5 illustrates the teaming arrangements in the 211 proposed solutions. We noted that the top two service providers in terms of proposals submitted, labeled B and C in table 5, had more than 70 percent of the total proposals submitted. According to the vendors, this was because those two providers had large numbers of satellites located in the areas of interest to DOD over the past 2 years, were willing to offer multiple solutions, and had low prices for bandwidth. Some service providers did not always see DOD as a preferred customer, did not always have available capacity in the required areas, or declined to propose because they knew they did not have the best coverage or prices.