DoD's $29.5M satellite service contract with Artel LLC awarded under full and open competition

Contract Overview

Contract Amount: $29,492,167 ($29.5M)

Contractor: Artel LLC

Awarding Agency: Department of Defense

Start Date: 2005-10-01

End Date: 2011-08-15

Contract Duration: 2,144 days

Daily Burn Rate: $13.8K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 3

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: SATELLITE SERVICE

Place of Performance

Location: RESTON, FAIRFAX County, VIRGINIA, 20191

State: Virginia Government Spending

Plain-Language Summary

Department of Defense obligated $29.5 million to ARTEL LLC for work described as: SATELLITE SERVICE Key points: 1. Contract awarded to Artel LLC for satellite services, indicating a significant investment in communication infrastructure. 2. The contract was secured through full and open competition, suggesting a competitive bidding process. 3. The duration of the contract (2005-2011) spans a considerable period, implying a long-term need for these services. 4. The firm-fixed-price contract type suggests that the price was set at the time of award, with potential for cost savings if performance is efficient. 5. The award was made by the Defense Information Systems Agency (DISA), a key player in DoD's IT and communication systems. 6. The contract's value of approximately $29.5 million over its term highlights the substantial resources allocated to satellite communications.

Value Assessment

Rating: good

The contract value of $29.5 million over approximately six years averages to about $4.9 million annually. Benchmarking this against similar large-scale satellite service contracts for government entities is challenging without more specific service details. However, the firm-fixed-price structure suggests that the government aimed to control costs upfront. The number of bids received (3) in a full and open competition provides some context for pricing, but a direct comparison to market rates for comparable satellite bandwidth and services would require detailed technical specifications.

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. Three bids were received, indicating a moderate level of competition for this satellite service requirement. While three bidders suggest some market interest, it is not indicative of a highly saturated market. The competition level likely contributed to price discovery, but the specific impact on achieving the lowest possible price is difficult to ascertain without knowing the nature of the services and the capabilities of the bidders.

Taxpayer Impact: A competitive bidding process generally benefits taxpayers by encouraging lower prices and better service offerings. The fact that multiple companies vied for this contract suggests that taxpayer funds were likely used more efficiently than in a sole-source scenario.

Public Impact

The Department of Defense (DoD) is the primary beneficiary, receiving critical satellite communication services. These services are essential for supporting military operations, command and control, and intelligence gathering. The contract likely impacts personnel within DISA responsible for managing and overseeing these vital communication links. Geographic impact is broad, as satellite services can reach remote and deployed locations globally, supporting forces wherever they operate.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for vendor lock-in if specialized equipment or infrastructure was required.
Reliance on a single vendor for critical communication services could pose a risk if the vendor experiences performance issues or financial instability.

Positive Signals

Awarded through full and open competition, indicating a fair and transparent process.
Firm-fixed-price contract type helps manage budget predictability and cost control for the government.
The Defense Information Systems Agency's involvement suggests adherence to established procurement and technical standards.

Sector Analysis

Satellite services are a critical component of modern defense and communication infrastructure. The market is characterized by a few large, established players and a growing number of specialized providers. Government contracts for satellite services often involve significant long-term commitments due to the high cost of satellite deployment and ground infrastructure. Spending in this sector is driven by the need for secure, reliable, and global communication capabilities, particularly for defense and intelligence agencies. Comparable spending benchmarks would depend heavily on the specific type of satellite service (e.g., bandwidth, data relay, secure communications) and the geographic coverage required.

Small Business Impact

There is no indication that this contract included small business set-asides. The nature of large-scale satellite service provision typically involves significant infrastructure and expertise, which may favor larger, established companies. Subcontracting opportunities for small businesses might exist in supporting roles, but the primary contract is likely held by a prime contractor with extensive capabilities in the satellite industry.

Oversight & Accountability

The Defense Information Systems Agency (DISA) is responsible for the oversight of this contract. As a component of the Department of Defense, DISA operates under established federal procurement regulations and internal oversight mechanisms. Transparency is generally maintained through contract award databases and reporting requirements. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse related to the contract.

Related Government Programs

Defense Information Systems Agency (DISA) Contracts
Department of Defense Satellite Communications
Government Satellite Services
Information Technology Services Contracts

Risk Flags

Contract Duration
Competition Level
Firm Fixed Price Risk

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $29.5 million to ARTEL LLC. SATELLITE SERVICE

Who is the contractor on this award?

The obligated recipient is ARTEL LLC.

Which agency awarded this contract?

Awarding agency: Department of Defense (Defense Information Systems Agency).

What is the total obligated amount?

The obligated amount is $29.5 million.

What is the period of performance?

Start: 2005-10-01. End: 2011-08-15.

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

The provided data indicates 'SATELLITE SERVICE' without further specificity. This could encompass a range of services including satellite bandwidth for data transmission, secure voice communications, imagery relay, or command and control links. The Defense Information Systems Agency (DISA) procures various satellite services to support global military operations, intelligence gathering, and contingency communications. Without more detailed contract line item numbers (CLINs) or service descriptions, it is difficult to pinpoint the exact nature of the services. However, given the duration and value, it likely involved significant capacity and potentially global coverage, essential for DoD's operational requirements.

How does the number of bids (3) compare to typical competition levels for similar satellite service contracts?

For large-scale, complex government contracts like satellite services, three bids can be considered a moderate level of competition. Highly specialized or niche requirements might see fewer bidders, while more commoditized services could attract more. The satellite industry is relatively consolidated, with a limited number of major providers capable of meeting stringent government requirements for security, reliability, and global reach. Therefore, three bids suggest that the Defense Information Systems Agency (DISA) successfully attracted a reasonable number of qualified offerors, indicating that the requirement was not overly restrictive and that the market had sufficient capacity to respond. This level of competition is generally sufficient to foster price discovery and encourage competitive pricing.

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

A firm-fixed-price (FFP) contract, while beneficial for budget certainty, carries inherent risks for both the government and the contractor. For the government, the primary risk is paying a premium if the contractor's actual costs are significantly lower than anticipated. The contractor assumes the risk of cost overruns; if their expenses exceed the fixed price, their profit margin shrinks or they incur a loss. In the context of satellite services, unforeseen technical challenges, increased operational costs (e.g., fuel for satellite repositioning, ground station maintenance), or changes in the regulatory environment could impact the contractor's profitability. The government must ensure the contract clearly defines performance standards and delivery schedules to mitigate the risk of receiving substandard services despite the fixed price.

What was Artel LLC's track record or reputation at the time of this award?

Artel LLC, now part of Lumen Technologies, has a long history of providing telecommunications and satellite services to the U.S. government, including the Department of Defense. At the time of this 2005 award, Artel was recognized as a significant player in the government telecommunications sector, particularly for its capabilities in providing secure and reliable network solutions. They were known for their expertise in satellite communications, terrestrial networks, and managed services. Their track record likely included prior successful contract performance with various government agencies, demonstrating their ability to meet stringent security, performance, and reliability requirements essential for defense communications. This established reputation would have been a key factor in their successful bid for this substantial contract.

How does this contract's value compare to overall federal spending on satellite communications?

The $29.5 million awarded to Artel LLC over approximately six years represents a modest portion of the total federal spending on satellite communications. The U.S. government, particularly the Department of Defense, is a major consumer of satellite services, with annual expenditures often running into the billions of dollars across various agencies and programs. This contract, awarded by DISA, likely focused on a specific set of requirements or a particular geographic region. When compared to the vast and complex satellite portfolios managed by entities like the Space Force, intelligence agencies, and other DoD components, this single contract, while significant in its own right, is one piece of a much larger federal investment in satellite technology and services.

What are the implications of this contract being awarded in 2005 for current satellite technology and needs?

A contract awarded in 2005 for satellite services would have been based on the technology and requirements prevalent at that time. Satellite technology has advanced significantly since then, with increased bandwidth capabilities, more sophisticated encryption, and the rise of new constellations (e.g., LEO satellites for commercial and government use). The services procured in 2005 might not fully align with today's demand for higher data rates, lower latency, and more flexible, software-defined satellite communications. While the contract likely fulfilled critical needs for the DoD during its term, current procurements would reflect more modern technological capabilities and potentially different service models, such as hybrid networks integrating satellite with terrestrial and 5G communications.

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Offers Received: 3

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 1893 PRESTON WHITE DR, RESTON, VA, 11

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $29,492,167

Exercised Options: $29,492,167

Current Obligation: $29,492,167

Contract Characteristics

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: DCA20001D5002

IDV Type: IDC

Timeline