Navy satellite telecommunications contract awarded to Inmarsat Inc. for over $18.5 million
Contract Overview
Contract Amount: $18,598,770 ($18.6M)
Contractor: Inmarsat Inc.
Awarding Agency: Department of Defense
Start Date: 2007-01-01
End Date: 2010-10-01
Contract Duration: 1,369 days
Daily Burn Rate: $13.6K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 2
Pricing Type: FIRM FIXED PRICE
Sector: Defense
Official Description: INMARSAT SERVICES FOR US NAVY
Place of Performance
Location: BETHESDA, MONTGOMERY County, MARYLAND, 20817
State: Maryland Government Spending
Plain-Language Summary
Department of Defense obligated $18.6 million to INMARSAT INC. for work described as: INMARSAT SERVICES FOR US NAVY Key points: 1. Contract awarded through full and open competition, suggesting a competitive bidding process. 2. The contract duration of 1369 days indicates a long-term service requirement. 3. Firm Fixed Price contract type helps manage cost certainty for the government. 4. The award was made by the Defense Contract Management Agency, a key DoD contracting entity. 5. The service falls under Satellite Telecommunications, a critical area for defense operations. 6. The contract was awarded under the 'MD' (Maryland) region, potentially indicating a specific operational focus.
Value Assessment
Rating: fair
The total award amount of $18.59 million over approximately 3.75 years for satellite telecommunications services appears to be within a reasonable range for such specialized defense contracts. Benchmarking against similar long-term satellite communication contracts for military applications would be necessary for a definitive value assessment. However, the firm fixed-price nature of the contract provides cost predictability, which is a positive indicator for value.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
This contract was awarded under 'full and open competition,' indicating that all responsible sources were permitted to submit a bid. The presence of two bidders suggests a moderate level of competition for this specialized service. While two bidders are better than one, a higher number of bidders typically leads to more robust price discovery and potentially lower prices for the government.
Taxpayer Impact: The full and open competition, despite having only two bidders, suggests that the Navy sought the best available solution. Taxpayers benefit from the potential for competitive pricing, although further analysis of the bid spread would be needed to confirm optimal value.
Public Impact
The U.S. Navy benefits from reliable satellite telecommunications services, crucial for command, control, and communication operations. This contract ensures the delivery of essential satellite bandwidth and related services to support naval missions. The geographic impact is likely global, given the nature of naval operations, though the award location is Maryland. The contract supports specialized roles within the defense telecommunications sector, potentially impacting a niche workforce.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Limited competition (2 bidders) may have restricted price negotiation.
- The specific nature of satellite telecommunications can lead to high barriers to entry for new competitors.
- Long contract duration could lead to vendor lock-in if not managed carefully.
Positive Signals
- Firm Fixed Price contract type provides cost certainty.
- Awarded through full and open competition, ensuring a broad search for qualified vendors.
- The contract supports critical defense communication infrastructure.
Sector Analysis
The satellite telecommunications sector is a vital component of the defense industrial base, providing essential communication links for military operations worldwide. This contract fits within the broader landscape of government spending on satellite services, which includes a mix of commercial and dedicated military satellite systems. The market is characterized by high technological barriers and significant capital investment, often dominated by a few key global players.
Small Business Impact
The provided data does not indicate any small business set-aside or subcontracting requirements for this contract. Therefore, the direct impact on the small business ecosystem appears minimal based on this award alone. Further investigation into the prime contractor's subcontracting practices would be needed to assess any indirect effects.
Oversight & Accountability
The Defense Contract Management Agency (DCMA) is responsible for overseeing contract performance, ensuring compliance with terms and conditions, and verifying delivery of goods and services. The firm fixed-price nature of the contract simplifies some aspects of financial oversight. Transparency is generally maintained through contract award databases, but detailed performance metrics and specific oversight activities are typically internal to the agency.
Related Government Programs
- DoD Satellite Communications
- Naval Communication Systems
- Defense Telecommunications Services
- Commercial Satellite Services for Government
Risk Flags
- Limited competition
- Potential for high contractor profit margins due to specialized service
Tags
defense, department-of-defense, inmarsat-inc, satellite-telecommunications, firm-fixed-price, full-and-open-competition, maryland, navy, dcma, large-contract
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $18.6 million to INMARSAT INC.. INMARSAT SERVICES FOR US NAVY
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 $18.6 million.
What is the period of performance?
Start: 2007-01-01. End: 2010-10-01.
What is the historical spending pattern for satellite telecommunications services by the U.S. Navy?
Analyzing historical spending for satellite telecommunications by the U.S. Navy requires access to comprehensive procurement data over multiple fiscal years. Generally, naval spending in this area fluctuates based on operational needs, technological advancements, and the lifecycle of existing satellite constellations and service contracts. Contracts can range from short-term bandwidth leases to long-term agreements for dedicated satellite capacity and ground support. Factors such as the shift towards more resilient and secure communication systems, including the use of commercial services to augment military capabilities, influence spending trends. Without specific historical data for the Navy's satellite telecommunications procurement, it's difficult to provide precise figures, but it represents a significant and ongoing investment critical for global naval operations.
How does the competition level of two bidders compare to similar satellite telecommunications contracts?
A competition level of two bidders for a specialized service like satellite telecommunications can be considered moderate. In highly technical or niche markets, it is not uncommon to see fewer than a dozen bidders. However, compared to broader IT services or general supplies, two bidders represent a limited pool. For taxpayer value, a higher number of bidders generally correlates with more aggressive pricing and innovation. While two bidders indicate some level of market interest and a competitive process was followed, it raises questions about whether the full spectrum of potential providers participated or if barriers to entry (e.g., technical requirements, existing infrastructure, security clearances) limited the field. Further analysis would involve comparing this to other similar satellite service awards to establish a benchmark for competition.
What are the potential risks associated with a firm fixed-price contract for satellite services?
Firm Fixed Price (FFP) contracts are generally favored for their cost certainty. However, for satellite services, potential risks can arise. If the scope of services is not precisely defined or if unforeseen technical challenges emerge during the contract period, the contractor may incur higher costs than anticipated. In an FFP arrangement, the contractor bears this risk, which can lead them to price higher initially to account for potential contingencies. Conversely, if the contractor finds efficiencies or the service proves less costly than projected, they retain the profit. For the government, the primary risk is paying a premium if the initial pricing was inflated due to perceived risks, or if the contractor under-delivers on quality due to cost-cutting measures, although quality is typically managed through performance standards and acceptance criteria.
What is Inmarsat Inc.'s track record with government contracts, particularly within the Department of Defense?
Inmarsat Inc. has a significant history of providing satellite communication services to government entities, including the Department of Defense (DoD). Their track record typically involves delivering global mobile satellite communications, including voice, data, and broadband services, essential for military operations in remote or contested environments. Government contracts often focus on ensuring secure, reliable, and high-bandwidth connectivity. While specific performance details for individual contracts are often proprietary, Inmarsat is generally recognized as a major player in the government satellite services market. Reviewing contract databases for past performance ratings, any instances of contract disputes, or awards for exceptional performance would provide a more granular understanding of their specific track record with the DoD.
How does the $18.59 million award compare to the overall DoD spending on satellite telecommunications?
The $18.59 million award to Inmarsat Inc. represents a specific procurement for satellite telecommunications services. The Department of Defense's overall spending on satellite communications is substantially larger, encompassing a wide array of services, including dedicated military satellite constellations (like WGS - Wideband Global Satcom), commercial satellite bandwidth leases, ground station operations, satellite manufacturing, launch services, and research and development. This single contract is likely a component of a larger strategy to leverage commercial satellite capabilities to supplement military assets. To contextualize this award, one would need to compare it against the total annual DoD budget for satellite communications, which runs into the billions of dollars, to understand its relative scale and significance.
Industry Classification
NAICS: Information › Satellite Telecommunications › Satellite Telecommunications
Product/Service Code: RESEARCH AND DEVELOPMENT › DEFENSE (OTHER) R&D
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
Financial Breakdown
Contract Ceiling: $160,468,551
Exercised Options: $160,464,800
Current Obligation: $18,598,770
Contract Characteristics
Cost or Pricing Data: NO
Parent Contract
Parent Award PIID: N0003902D2301
IDV Type: IDC
Timeline
Start Date: 2007-01-01
Current End Date: 2010-10-01
Potential End Date: 2010-10-01 00:00:00
Last Modified: 2010-06-06
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