DoD's $294.5M satellite telecommunications contract awarded to STRATOS MOBILE NETWORKS, INC. shows fair value

Contract Overview

Contract Amount: $29,452,808 ($29.5M)

Contractor: Inmarsat Inc.

Awarding Agency: Department of Defense

Start Date: 2004-09-24

End Date: 2010-10-01

Contract Duration: 2,198 days

Daily Burn Rate: $13.4K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: 200412!040320!1700!D0223 !SPACE AND NAVAL WARFARE SYSTEMS !N0003902D2301 !A!N! !N!0005 ! !20040924!20060131!800969552!202114617!244607925!N!STRATOS MOBILE NETWORKS, INC !6901 ROCKLEDGE DR STE 900 !BETHESDA !MD!20817!07125!031!24!BETHESDA !MONTGOMERY !MARYLAND !+000001455268!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 $29.5 million to INMARSAT INC. for work described as: 200412!040320!1700!D0223 !SPACE AND NAVAL WARFARE SYSTEMS !N0003902D2301 !A!N! !N!0005 ! !20040924!20060131!800969552!202114617!244607925!N!STRATOS MOBILE NETWORKS, INC !6901 ROCKLEDGE DR STE 900 !BETHESDA !MD!20817!07125!031!24!BETHESDA !MONT… Key points: 1. Contract value of $294.5M over its life suggests a significant investment in critical communication infrastructure. 2. The award was made under full and open competition, indicating a potentially competitive bidding process. 3. The contract duration of approximately 6 years (2198 days) allowed for sustained service delivery. 4. STRATOS MOBILE NETWORKS, INC. has a track record with the Department of Defense, suggesting some level of established performance. 5. The primary service category is Communications Services, aligning with the agency's operational needs. 6. The contract was awarded by the Department of Defense, a major federal spender in telecommunications. 7. The contract's fixed-price nature provides cost certainty for the government, though it may limit flexibility. 8. The contract was managed by the Defense Contract Management Agency, a key oversight body.

Value Assessment

Rating: fair

The total contract value of $294.5 million over its lifespan indicates a substantial investment. Benchmarking this against similar satellite telecommunications contracts is challenging without more specific service details and market data. However, the firm fixed-price structure suggests that the government aimed for cost predictability. The contract's duration of nearly six years implies a need for long-term, stable service. Without detailed cost breakdowns or comparisons to industry standards for similar satellite bandwidth and services, a definitive value-for-money assessment is difficult, but the competitive award process offers some assurance.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under 'full and open competition,' meaning all responsible sources were permitted to submit a bid. The presence of two bids suggests a degree of competition, though the exact number of potential bidders in the satellite telecommunications market for this specific service level is unknown. A higher number of bidders typically leads to more competitive pricing and better value for the government. The fact that it was competed at all is a positive sign for price discovery.

Taxpayer Impact: Full and open competition generally benefits taxpayers by driving down prices through a wider pool of potential offerors. This contract's competitive nature likely resulted in a more favorable price than a sole-source award.

Public Impact

The Department of Defense is the primary beneficiary, receiving critical satellite telecommunications services. This contract supports the operational readiness and communication capabilities of military forces. The services provided are essential for command and control, intelligence gathering, and logistical support. The geographic impact is likely global, given the nature of satellite communications supporting deployed forces. The contract supports jobs within STRATOS MOBILE NETWORKS, INC. and potentially its subcontractors.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of detailed performance metrics in the provided data makes it difficult to assess service quality.
The firm fixed-price contract might not adequately account for unforeseen technological changes or service demands.
Limited information on the specific types of satellite services procured hinders a deeper value analysis.
The duration of the contract could lead to potential lock-in with a single provider if not managed carefully.
The provided data does not detail the number of bids received, only the number of contracts awarded (2).

Positive Signals

Awarded under full and open competition, suggesting a robust bidding process.
The firm fixed-price contract provides cost certainty for the government.
The contract was managed by the Defense Contract Management Agency, indicating established oversight.
STRATOS MOBILE NETWORKS, INC. has experience with government contracts.
The contract duration of nearly six years allowed for stable service provision.

Sector Analysis

The satellite telecommunications sector is a critical component of national security and global communication infrastructure. This contract falls within the broader Information Technology and Defense sectors, specifically addressing the need for reliable, long-range communication capabilities. The market is characterized by high barriers to entry due to technological complexity and infrastructure investment. Spending in this area by the Department of Defense is substantial, reflecting the indispensable role of satellite communications in modern military operations, including command and control, intelligence, surveillance, and reconnaissance (ISR).

Small Business Impact

The provided data indicates that this contract was not specifically set aside for small businesses (ss: false, sb: false). Therefore, there are no direct subcontracting implications or specific impacts on the small business ecosystem stemming from a set-aside provision. The primary focus appears to be on securing necessary services from capable providers, regardless of their size, within a competitive framework.

Oversight & Accountability

The contract was managed by the Defense Contract Management Agency (DCMA), which is responsible for ensuring contractors meet the terms and conditions of their agreements. Oversight mechanisms would typically include regular performance reviews, audits, and compliance checks. Transparency is facilitated through contract databases like FPDS, where award details are recorded. Inspector General jurisdiction would apply in cases of suspected fraud, waste, or abuse related to the contract.

Related Government Programs

Defense Communications Services
Satellite Communications
Department of Defense IT Spending
Naval Warfare Systems Command Contracts
Global Communication Networks

Risk Flags

Potential for cost overruns if unforeseen technical challenges arise in a rapidly evolving technology sector.
Risk of service disruption if contractor faces financial instability or operational issues.
Limited flexibility to incorporate new technologies or adapt services under a firm fixed-price structure without modifications.
Dependence on a single provider for critical communication infrastructure over an extended period.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $29.5 million to INMARSAT INC.. 200412!040320!1700!D0223 !SPACE AND NAVAL WARFARE SYSTEMS !N0003902D2301 !A!N! !N!0005 ! !20040924!20060131!800969552!202114617!244607925!N!STRATOS MOBILE NETWORKS, INC !6901 ROCKLEDGE DR STE 900 !BETHESDA !MD!20817!07125!031!24!BETHESDA !MONTGOMERY !MARYLAND !+000001455268!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 $29.5 million.

What is the period of performance?

Start: 2004-09-24. End: 2010-10-01.

What specific satellite telecommunications services were procured under this contract?

The provided data indicates the primary service category as 'COMMUNICATIONS SERVICES' (PSC R426) and the North American Industry Classification System (NAICS) code as '517410' for Satellite Telecommunications. While the specific details of the services are not elaborated in the abbreviated data, this generally encompasses the provision of satellite bandwidth, terminal equipment, network management, and associated support services necessary for reliable global communication. These services are crucial for military operations, enabling voice, data, and video transmission to remote and mobile platforms, ships, aircraft, and ground units operating worldwide.

How does the contract value of $294.5 million compare to similar satellite telecommunications contracts awarded by the DoD?

Comparing the $294.5 million contract value requires access to a broader dataset of similar DoD satellite telecommunications contracts, including their duration, scope of services, and specific technologies. However, as a total contract value over approximately six years, it represents a significant but not necessarily outlier expenditure for a major defense capability. Large-scale telecommunications infrastructure and services for a global military force are inherently costly. Without specific benchmarks for bandwidth, service level agreements (SLAs), and geographic coverage, a precise comparison is difficult. The firm fixed-price nature suggests a focus on predictable costs for a defined service package.

What are the key performance indicators (KPIs) or service level agreements (SLAs) associated with this contract?

The provided abbreviated data does not contain specific details regarding Key Performance Indicators (KPIs) or Service Level Agreements (SLAs) for this contract. Typically, for satellite telecommunications contracts, SLAs would define critical metrics such as network availability (uptime), latency, data throughput, and response times for technical support. KPIs would measure the contractor's adherence to these SLAs and overall performance. The management by the Defense Contract Management Agency (DCMA) suggests that such performance metrics would be monitored, but the specifics are not available in this dataset.

What is the track record of STRATOS MOBILE NETWORKS, INC. with the Department of Defense?

STRATOS MOBILE NETWORKS, INC. has a history of receiving contracts from the Department of Defense. The data shows this contract (N0003902D2301) was awarded to them, indicating prior engagement. While the abbreviated data doesn't detail the number or value of previous contracts, their selection for a significant award like this suggests they have met DoD requirements in the past. Further investigation into FPDS or other contract databases would reveal the full scope of their past performance and relationship with the DoD.

What are the potential risks associated with a firm fixed-price contract for satellite telecommunications?

Firm fixed-price (FFP) contracts offer cost certainty to the government, as the price is set regardless of the contractor's actual costs. However, for complex, evolving services like satellite telecommunications, FFP contracts carry risks. If technology advances rapidly or unforeseen operational needs arise, the contractor may be less incentivized or able to adapt without contract modifications, potentially leading to scope disputes or a need for costly change orders. Conversely, if the contractor significantly underestimates costs, they bear the loss, which could impact their financial stability or willingness to bid on future government contracts. The government also risks paying a premium if the contractor's actual costs are substantially lower than anticipated.

How does the geographic scope of this contract impact its overall value and complexity?

The contract is for satellite telecommunications, which inherently implies a global or wide-area geographic scope, essential for supporting deployed military assets worldwide. This broad reach significantly increases the complexity and cost compared to localized communication services. Ensuring reliable connectivity across diverse and often challenging operational environments (e.g., remote land locations, maritime vessels, aircraft) requires robust infrastructure, redundant systems, and sophisticated network management. The value is derived from enabling critical command, control, and intelligence functions regardless of location, but the complexity necessitates rigorous oversight and potentially higher unit costs for service delivery.

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