GLOBALSTAR WANTS GAO TO VOID IRIDIUM DoD CONTRACT
Despite earlier public statements of support, Globalstar wants General Accounting Office (GAO) to overturn deal that awarded rival Iridium $72 million contract last month for satellite telephone service without open bidding (CD Dec 13 p7). Globalstar charged lack of open competition and bidding process violated Dept. of Defense (DoD) bidding procedures, which should invalidate deal. Globalstar filed complaint with GAO Dec. 15. U.S. Defense Information Systems Agency (DISA), which oversaw contract, disagreed with Globalstar and predicted deal would pass legal muster with federal auditors. Military officials have suggested all along that Iridium contract was signed in “best interests” of providing global communications to military and govt. Govt. also played significant part in convincing Motorola “it was in the best interests of national security” to keep Iridium satellites in orbit when company went bankrupt, official said. DISA, which responded to complaint by saying Globalstar lacked capacity to service contract, said it planned to respond to complaint by Jan. 16 deadline. Iridium spokesman said company had no comment. GAO scheduled hearing for March 26.
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GAO can only make recommendations, but it would be unlikely for govt. agency “not to adhere” to decision, federal official said. If it disagrees with findings, it must provide report to Congress explaining its actions. Pentagon said Iridium system offered global telecom needs not provided by other systems, which it said supported DISA decision. Military also has been regular user of Iridium system and has made major investment in Hawaii gateway because of anticipated use.
Globalstar told Communications Daily in earlier interview that it welcomed return of Iridium to satellite telephone market, but Pentagon protests indicated “significance” of military market for 2 companies, which are “likely to enter turf war” for same customers under revamped business plans (CD Nov 30 p5). Both companies are banking on their ability to provide satellite telephone service and other communication services to govt., military, maritime and others in remote locations around world. DoD contract with Iridium was hailed throughout industry as major victory for new owners of company that recently emerged from bankruptcy and another “nail in coffin” of Globalstar, which is experiencing financial problems because of trouble attracting customers (CD Nov 1 p2), industry official said. “The action was filed simply to give us an opportunity to bid on the contract,” Globalstar spokesman said: “We don’t have coverage in some parts of the world, like the North Pole and South Pole, but that is only a finite portion of the needs. For remainder of their needs, our service is very competitive.”