Commercial providers of satellite services face a confidence gap with military buyers

Clare Grason: Some military organizations are warming to commercial satcom services, but many are still suspicious of commercial solutions

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

“We’re seeing the LEO mania and the new features available … but customers have a bit of a trust issue,” said Clare Grason, director of the Space Force’s Commercial Satellite Communications Office, during a press release from Aerospace Corp. hosted online event.

Services provided by commercial low-Earth orbit satellites are one item on a growing list of options being offered by operators of LEO, medium and geostationary Earth orbit satellites to meet military communications needs. Grason said her office — which is responsible for matching military satcom demand with commercial providers — is trying to “provide the Department of Defense with assurance that commercial solutions are dependable and dependable.” We try to build trust.”

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

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

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

However, some users are warming up to commercial services, Grason said. The US Army, for example, recently launched a pilot program to evaluate commercial services, which is likely to be followed by a managed service contract. The Marine Corps wants 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 event on June 2nd to highlight a timely white paper that provides general guidelines for government agencies to determine when it makes sense to purchase commercial services.

The Commercial Readiness Assessment Framework lists recommendations for how government organizations can evaluate commercial providers and commercial markets to meet national needs.

Ronald Birk, deputy principal at Aerospace and one of the authors of the assessment, said that for at least two decades, U.S. governments have issued guidance for agencies to “commercialize as much as possible” but have provided no guidance “such as suitability.” and willingness of providers.”

“When deciding to acquire commercial capacity, government agencies should determine the level and scope of assessments required to meet their risk tolerance,” the Aerospace paper said.

A new business model

Grason said the Space Force “lays the groundwork for growth and prioritization of trade relationships.” The space industry is a leader in many areas, “and we see that with satcom.”

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

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

Grason said her office is working with consulting firm Deloitte to build an automated system to manage satcom procurements using the Salesforce customer relations management platform. “This should give us better information and encourage better decision-making and responsiveness,” she said.

Efforts are also being made to train military program managers, Grason said.

“Space Force organizations are focused on building systems,” she said. Some organizations are unfamiliar with the contracting methods now available that they might use and worry that their needs will not be prioritized when using commercial services, Grason said.

“Our customers need to understand that switching makes business sense and that they can scale without adding significantly more cost,” she said.

It would also be helpful for retail companies to ensure their business plans “align with our customers’ budgets,” she said. “And what are the terms? If DoD wants to lease terminals, what are the terms of their replacement? There are concerns that seemingly attractive models could become unaffordable.”

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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