Commercial satellite service providers face a lack of trust with military buyers

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Clare Grason: Some military organizations are gearing up for commercial satellite communications services, but many are still wary of commercial solutions

WASHINGTON — Despite growing enthusiasm for new space-based Internet services, some military buyers remain wary of commercial alternatives to government-developed systems, a senior procurement official said June 2.

“We’re seeing LEO mania and new capability being available…but customers have a bit of a trust issue,” Clare Grason, head of Space Force’s commercial satellite communications office, said at an online event hosted by Aerospace Corp.

The services provided by commercial low Earth orbit satellites are part of a growing menu of options offered by LEO medium Earth orbit and geostationary satellite operators to meet military communications needs. Grason said his office — which is responsible for matching military satcom demand with commercial vendors — “is trying to convince the DoD that the commercial solutions are reliable and dependable. We try to create trust. »

Grason noted that most military buyers of commercial satellite capacity still prefer the traditional approach of using commercial bandwidth under short-term leases rather than purchasing fully managed services now offered by the industry.

An exception is a seven-year agreement DoD signed in 2019 with Iridium Communications for unlimited use of the company’s mobile communications constellation.

Otherwise, “the majority of what we buy today is transponder capacity,” Grason said. “They [military customers] want to own and control terminals, ground segment and network traffic management.

However, some users are gearing up for commercial services, Grason said. The US Army, for example, recently launched a commercial services assessment pilot program, which is expected to be followed by a managed services contract. The Marine Corps is looking to follow suit.

“The barrier in many cases is largely cultural,” she said.

Commercial satellite communications acquisitions peaked in 2012, fueled by the wars in Iraq and Afghanistan. “After 2012, there was a slight decline,” Grason said. “Now we see our numbers increasing.”

Aerospace hosted the June 2 event to highlight a recent white paper that provides general guidelines for government agencies to determine when it makes sense to purchase commercial services.

The “Business Readiness Assessment Framework” lists recommendations on how government organizations can assess commercial suppliers and commercial markets to meet national needs.

Ronald Birk, a senior associate director at Aerospace and one of the assessment’s authors, said US administrations for at least two decades have advised agencies to “use the commercial as much as possible” but have not. Advised on “how to assess the suitability and readiness of providers.

“When making the decision to acquire a commercial capability, government agencies should determine the level and scope of assessments needed to match their risk tolerance,” the Aerospace document said.

A new economic model

Grason said the Space Force “lays the foundation for developing and prioritizing business relationships.” The space industry is leading in many areas “and we see that in satcoms.”

Contracts like Iridium’s that aggregate demand are a more efficient way to buy satcoms, compared to multiple contracts for different military customers, Grason said. His office currently manages 175 different contracts for satellite communications.

“We think this approach is a bit suboptimal,” he said. But the transition to full-service contracts will be difficult for DoD users because it’s an unfamiliar business model.

Grason said his office was working with consulting firm Deloitte to create an automated system to manage satcom purchases using the Salesforce customer relationship management platform. “It should give us better information and drive better decision-making and responsiveness,” she said.

An effort is also underway to educate military program managers, Grason said.

“Space Force organizations are focused on building systems,” she said. Some organizations aren’t familiar with the kinds of contracting methods currently available that they could leverage and worry that if they use commercial services, their needs won’t be prioritized, Grason said.

“Our customers need to understand that transitioning makes economic sense and that they can scale without having to dramatically increase costs,” she said.

It would also be helpful for business ventures to ensure that their business plans “fit our clients’ budgets”, she said. “And what are the terms? If the DoD wants to lease terminals, what are the terms of their replacement? Some fear that seemingly attractive models will become prohibitively expensive. »

Grason’s message to the commercial industry: “Never assume that the audience you are dealing with has a high level of understanding.”

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