Intelsat to DoD: Multiyear Satcom Contracts Reduce Costs

Posted by Eric Haun
Friday, December 20, 2013

Intelsat today issued the following statement:

The National Defense Authorization Act (NDAA) directs the Department of Defense to move toward multiyear leases and hosted payloads to acquire commercial satellite capacity and services.

The leaders of the commercial satellite industry have worked for many years to convince Congress that one-year leases are the most expensive and least-strategic method for the Department of Defense (DoD) to acquire commercial satcom services.

By leasing commercial capacity on a long-term basis, the commercial satellite industry believes that the DoD will have an opportunity to take a broader approach to planning its space architecture, one that includes both commercial and government-owned satellites. Such long-range planning will not only generate cost savings, but will enable the DoD to have more satellite capacity when and where it is needed to support a range of simultaneous missions around the globe.

As such, we commend the Congress for putting forth language in the bill that encourages the DoD to pursue a variety of methods to reduce costs, including multiyear leases and procurement of government owned payloads on commercial satellites.

Specifically, the bill requires the DoD to put forth a strategy to include:
1.    An analysis of financial or other benefits of doing multi-year acquisitions.
2.    An analysis of risks associated with such acquisitions.
3.    Identification of methods to address planning, programming, budgeting and execution, liability in the event of a contract termination.
4.    Identification of changes needed in the process of developing and approving requirements.
5.    Identification of any necessary changes to policies, procedures, regulations and statutes.

The bill requires that the DoD deliver its strategy to the appropriate Congressional committees within 90 days of passage of the bill.

This is an important step toward fulfilling the goals of the DoD's Better Buying initiative. It also recognizes the vital role that commercial satellites play in helping the DoD achieve its global mission and encourages more creative and cost-effective approaches to acquiring commercial satcom.  We look forward to working with the Pentagon to provide satellite communications services in a more strategic and cost-effective manner in the future.

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