DoD's $30.9M satellite telecommunications contract awarded to STRATOS MOBILE NETWORKS, INC. shows potential value concerns

Contract Overview

Contract Amount: $30,925,418 ($30.9M)

Contractor: Inmarsat Inc.

Awarding Agency: Department of Defense

Start Date: 2003-11-03

End Date: 2010-09-16

Contract Duration: 2,509 days

Daily Burn Rate: $12.3K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: 200405!040021!1700!D0223 !SPACE AND NAVAL WARFARE SYSTEMS !N0003902D2301 !A!N! !Y!0004 ! !20031103!20050131!800969552!202114617!244607925!N!STRATOS MOBILE NETWORKS, INC !6901 ROCKLEDGE DR STE 900 !BETHESDA !MD!20817!07125!031!24!BETHESDA !MONTGOMERY !MARYLAND !+000000943142!N!N!000000000000!R426!COMMUNICATIONS SERVICES !S1 !SERVICES !000 !* !517310!E! !5!B!S! ! !D!20070331!B!E!Y!A! !A!N!J!2!002!B! !Z!N!E! ! !Y!C!N! ! ! !A!C!A!A!000!A!C!N! ! ! ! ! !N00039!0001! !

Place of Performance

Location: BETHESDA, MONTGOMERY County, MARYLAND, 20817

State: Maryland Government Spending

Plain-Language Summary

Department of Defense obligated $30.9 million to INMARSAT INC. for work described as: 200405!040021!1700!D0223 !SPACE AND NAVAL WARFARE SYSTEMS !N0003902D2301 !A!N! !Y!0004 ! !20031103!20050131!800969552!202114617!244607925!N!STRATOS MOBILE NETWORKS, INC !6901 ROCKLEDGE DR STE 900 !BETHESDA !MD!20817!07125!031!24!BETHESDA !MONT… Key points: 1. The contract's duration of 2509 days (nearly 7 years) suggests a long-term need for satellite telecommunications services. 2. The award to STRATOS MOBILE NETWORKS, INC. was made under full and open competition, indicating a competitive bidding process. 3. The contract's firm fixed-price nature provides cost certainty for the government, but may limit flexibility. 4. The base contract value was $30.9M, with potential for modifications or task orders that could increase the total expenditure. 5. The contract falls under the 'Satellite Telecommunications' product service code, a critical area for defense operations. 6. The contract was managed by the Defense Contract Management Agency, suggesting a focus on oversight and compliance.

Value Assessment

Rating: questionable

Benchmarking the value of this contract is challenging without more detailed service descriptions and performance metrics. The total value of $30.9M over nearly seven years averages to approximately $4.4M annually. This figure needs to be compared against similar satellite telecommunications contracts awarded by the Department of Defense or other federal agencies for similar services. Without specific unit costs or service level agreements, it's difficult to definitively assess if this represents excellent value for money. The firm fixed-price structure, while offering cost certainty, could also mean the government is paying a premium if actual usage is lower than anticipated.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under 'full and open competition,' which typically means that all responsible sources were permitted to submit a bid. The presence of two bids suggests a moderate level of competition. While more than one bidder is positive, a higher number of bids generally leads to more robust price discovery and potentially lower prices for the government. The specific details of the bidding process, such as the number of proposals received and the evaluation criteria, would provide further insight into the effectiveness of the competition.

Taxpayer Impact: Full and open competition is generally favorable for taxpayers as it encourages multiple vendors to offer competitive pricing, potentially leading to cost savings for the government.

Public Impact

The Department of Defense is the primary beneficiary, receiving essential satellite telecommunications services. This contract supports critical communication infrastructure necessary for military operations and command and control. The geographic impact is likely global, given the nature of satellite communications, enabling connectivity in remote or deployed locations. The contract supports jobs within STRATOS MOBILE NETWORKS, INC. and potentially its subcontractors in the telecommunications sector.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns if service needs fluctuate significantly and the fixed-price contract doesn't adapt.
Dependence on a single contractor for a critical service could pose a risk if the contractor faces financial or operational difficulties.
Limited insight into the specific performance metrics and service quality achieved under this contract.

Positive Signals

Awarded through full and open competition, suggesting a fair and transparent process.
Firm fixed-price contract provides budget certainty for the government.
Long contract duration indicates a sustained need and potential for stable service delivery.

Sector Analysis

The satellite telecommunications sector is a vital component of the broader IT and defense industries, providing essential connectivity solutions for government and commercial entities. This contract fits within the segment of government-procured satellite services, which can range from broadband internet access to secure voice and data transmission for remote operations. The market is characterized by a few large established players and specialized service providers. Benchmarking this contract's value requires comparison with other government awards for similar satellite bandwidth, data rates, and service level agreements, considering factors like geographic coverage and security requirements.

Small Business Impact

There is no indication from the provided data that this contract included a small business set-aside. The award was made to STRATOS MOBILE NETWORKS, INC., which is likely a larger entity. Subcontracting opportunities for small businesses may exist, but are not explicitly detailed in this data. The overall impact on the small business ecosystem would depend on whether STRATOS MOBILE NETWORKS, INC. actively seeks small business subcontractors for specialized services or components.

Oversight & Accountability

The contract was managed by the Defense Contract Management Agency (DCMA), which is responsible for ensuring contractors meet performance, quality, and delivery requirements. Oversight mechanisms would typically include regular reporting, site visits, and performance reviews. Transparency is facilitated through contract databases like FPDS, where basic award information is publicly available. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse related to the contract.

Related Government Programs

Defense Information Systems Agency (DISA) Telecommunications Services
General Services Administration (GSA) IT Schedule Contracts
Other DoD satellite communication procurements

Risk Flags

Long contract duration may increase exposure to technological obsolescence.
Potential for cost increases if contract scope changes significantly.
Dependence on a single provider for critical communication services.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $30.9 million to INMARSAT INC.. 200405!040021!1700!D0223 !SPACE AND NAVAL WARFARE SYSTEMS !N0003902D2301 !A!N! !Y!0004 ! !20031103!20050131!800969552!202114617!244607925!N!STRATOS MOBILE NETWORKS, INC !6901 ROCKLEDGE DR STE 900 !BETHESDA !MD!20817!07125!031!24!BETHESDA !MONTGOMERY !MARYLAND !+000000943142!N!N!000000000000!R426!COMMUNICATIONS SERVICES !S1 !SERVICES !000 !* !517310!E! !5!B!S! ! !D!200

Who is the contractor on this award?

The obligated recipient is INMARSAT INC..

Which agency awarded this contract?

Awarding agency: Department of Defense (Defense Contract Management Agency).

What is the total obligated amount?

The obligated amount is $30.9 million.

What is the period of performance?

Start: 2003-11-03. End: 2010-09-16.

What was the specific nature of the satellite telecommunications services provided under this contract?

The provided data indicates the Product Service Code (PSC) as R426, which corresponds to 'Communications Services.' More specifically, the National Item Identification Number (NIIN) '517410' points to 'Satellite Telecommunications.' This suggests the contract covered the provision of satellite-based communication services, which could include voice, data, internet, or video transmission. However, the exact details regarding bandwidth, data rates, geographic coverage, and specific applications (e.g., tactical communications, enterprise networking) are not explicitly stated in the abbreviated data. Further analysis of the contract's statement of work would be necessary to fully understand the scope of services.

How does the per-unit cost of this contract compare to market rates for similar satellite telecommunications services?

Determining a precise per-unit cost for this contract is not feasible with the provided data alone. The total award amount is $30,925,417.91 over a period of 2509 days (approximately 6.87 years). Without knowing the volume of services consumed (e.g., gigabytes of data, minutes of voice, number of terminals), a meaningful per-unit cost cannot be calculated. To benchmark against market rates, one would need to identify comparable contracts with similar service level agreements (SLAs), geographic coverage, and technology. Industry reports or analyses of other government satellite telecommunications procurements would be necessary for a comparative assessment of value.

What is the track record of STRATOS MOBILE NETWORKS, INC. in fulfilling similar government contracts?

The provided data indicates that STRATOS MOBILE NETWORKS, INC. was awarded this contract. To assess their track record, one would need to examine their past performance on other federal contracts, particularly those involving satellite telecommunications. This would involve searching contract databases for previous awards to STRATOS MOBILE NETWORKS, INC., reviewing performance evaluations (if available), and looking for any history of contract disputes, terminations, or successful completions. The fact that they were awarded this significant contract suggests they met the requirements for responsibility and capability at the time of award, but a comprehensive review of their history is needed for a full assessment.

What were the primary risks identified during the procurement process for this contract, and how were they mitigated?

The provided abbreviated data does not explicitly detail the risks identified during the procurement process or the mitigation strategies employed. However, common risks in satellite telecommunications contracts include technological obsolescence, service disruptions (due to satellite issues, ground station problems, or weather), cybersecurity threats, and contractor performance issues. Given the 'full and open competition' and 'firm fixed price' nature, the government likely sought to mitigate cost risks through competitive bidding and mitigate performance risks through defined SLAs and oversight by the DCMA. Specific risk assessments would be found in the original solicitation and evaluation documents.

How has federal spending on satellite telecommunications evolved over the past decade, and where does this contract fit within that trend?

Federal spending on satellite telecommunications has generally remained significant, driven by the need for secure and reliable communications in remote areas, during deployments, and for continuity of operations. While specific aggregate spending figures require detailed analysis of federal procurement data over time, contracts like this one represent a consistent demand for these services. The trend may involve shifts towards higher bandwidth, more resilient networks, and potentially increased use of commercial satellite services as capabilities improve and costs decrease. This $30.9M contract, spanning nearly seven years, reflects a substantial, long-term investment in this capability within the Department of Defense.

Industry Classification

NAICS: Information › Satellite Telecommunications › Satellite Telecommunications

Product/Service Code: SUPPORT SVCS (PROF, ADMIN, MGMT) › PROFESSIONAL SERVICES

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Offers Received: 2

Pricing Type: FIRM FIXED PRICE (J)

Contractor Details

Parent Company: Inmarsat PLC (UEI: 736255410)

Address: 6903 ROCKLEDGE DR # 1300, BETHESDA, MD, 08

Business Categories: Category Business, Not Designated a Small Business

Contract Characteristics

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: N0003902D2301

IDV Type: IDC

Timeline