Viasat Inc. awarded $21M for communication terminals, raising questions about competition and value
Contract Overview
Contract Amount: $34,486,557 ($34.5M)
Contractor: Viasat Inc
Awarding Agency: Department of Defense
Start Date: 2009-06-23
End Date: 2010-12-31
Contract Duration: 556 days
Daily Burn Rate: $62.0K/day
Competition Type: NOT COMPETED
Number of Offers Received: 1
Pricing Type: FIRM FIXED PRICE
Sector: Other
Official Description: THIS ORDER IS A FFP FULLY FUNDED ORDER IN THE AMOUNT OF $20,999,287. MIDS LVT ORDER TO PROCURE TERMINALS UNDER CLINS 2001, 2004, 0600, 0600 AND CLIN 1000.
Place of Performance
Location: CARLSBAD, SAN DIEGO County, CALIFORNIA, 92009
Plain-Language Summary
Department of Defense obligated $34.5 million to VIASAT INC for work described as: THIS ORDER IS A FFP FULLY FUNDED ORDER IN THE AMOUNT OF $20,999,287. MIDS LVT ORDER TO PROCURE TERMINALS UNDER CLINS 2001, 2004, 0600, 0600 AND CLIN 1000. Key points: 1. The contract's value of $20,999,287 for communication terminals warrants scrutiny regarding its cost-effectiveness. 2. The 'NOT COMPETED' status suggests a lack of competitive pressure, potentially impacting pricing. 3. The duration of 556 days for this order needs to be assessed against project timelines and potential delays. 4. The procurement of terminals under multiple CLINs indicates a complex order structure that requires clear justification. 5. The specific type of terminals and their strategic importance to the Department of the Navy are key performance indicators. 6. The absence of small business involvement (sb: false) should be noted in the context of federal procurement goals.
Value Assessment
Rating: questionable
The contract value of $20,999,287 for communication terminals appears significant. Without comparable contract data or detailed cost breakdowns, it is difficult to definitively benchmark the value for money. The 'NOT COMPETED' designation raises concerns that the government may not have secured the most competitive pricing available in the market. Further analysis would be needed to compare the unit cost of these terminals against similar procurements or commercial off-the-shelf equivalents to assess if the price is reasonable.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was designated as 'NOT COMPETED', indicating a sole-source award. This means that the Department of the Navy did not solicit bids from multiple vendors. The lack of competition means that pricing was likely negotiated directly with Viasat Inc. without the benefit of market-driven price discovery that typically occurs in a competitive bidding process.
Taxpayer Impact: For taxpayers, a sole-source award can mean a higher price than might have been achieved through competition. It also limits opportunities for other businesses to compete for government contracts.
Public Impact
The primary beneficiaries are the Department of the Navy, which receives communication terminals essential for its operations. The services delivered include the procurement of specific communication terminals, likely for tactical or strategic communication needs. The geographic impact is primarily within the Department of the Navy's operational areas, potentially worldwide. Workforce implications are likely related to the manufacturing and support of these terminals by Viasat Inc.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Lack of competition may lead to inflated costs for taxpayers.
- Sole-source awards can reduce transparency in government spending.
- The specific technical requirements might be highly specialized, but this needs to be clearly documented to justify the sole-source nature.
- The contract duration and funding mechanism (FFP) should be reviewed for potential cost overruns or scope creep.
Positive Signals
- Viasat Inc. is a known provider of communication systems, suggesting potential expertise.
- The contract is fully funded, indicating a clear commitment and budget allocation.
- The fixed-firm price (FFP) contract type generally shifts cost risk to the contractor.
Sector Analysis
The procurement falls within the 'Other Communications Equipment Manufacturing' sector (NAICS 334290). This sector encompasses establishments primarily engaged in manufacturing communication equipment, excluding telephone and telegraph apparatus. The market for advanced communication terminals is often characterized by specialized technology and a limited number of key players, which can sometimes lead to sole-source or limited competition scenarios. Benchmarking spending in this sector requires understanding the specific technological capabilities and market dynamics of the terminals procured.
Small Business Impact
This contract was not set aside for small businesses (sb: false), and there is no indication of subcontracting requirements for small businesses. This means that opportunities for small businesses to participate in this specific procurement were likely minimal or non-existent. The absence of small business participation in this contract does not necessarily reflect the overall small business utilization by Viasat Inc. or the Department of the Navy, but it is a data point to consider in the broader ecosystem.
Oversight & Accountability
Oversight for this contract would typically fall under the Department of the Navy's contracting and program management offices. The Inspector General for the Department of Defense may also have jurisdiction for audits and investigations. Transparency is limited due to the sole-source nature of the award, making public scrutiny of the pricing and justification more challenging. Accountability would be measured by the successful delivery of the terminals according to the contract specifications and timeline.
Related Government Programs
- Tactical Communication Systems
- Satellite Communication Terminals
- Department of Defense Procurement
- Communications Equipment Manufacturing
Risk Flags
- Sole-source award
- Lack of competition
- Potential for inflated pricing
- Limited transparency
Tags
defense, department-of-defense, department-of-the-navy, viasat-inc, communications-equipment, not-competed, sole-source, firm-fixed-price, california, tactical-communications, terminals
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $34.5 million to VIASAT INC. THIS ORDER IS A FFP FULLY FUNDED ORDER IN THE AMOUNT OF $20,999,287. MIDS LVT ORDER TO PROCURE TERMINALS UNDER CLINS 2001, 2004, 0600, 0600 AND CLIN 1000.
Who is the contractor on this award?
The obligated recipient is VIASAT INC.
Which agency awarded this contract?
Awarding agency: Department of Defense (Department of the Navy).
What is the total obligated amount?
The obligated amount is $34.5 million.
What is the period of performance?
Start: 2009-06-23. End: 2010-12-31.
What is the specific type of communication terminal being procured and what are its key technical specifications?
The provided data indicates the procurement of 'MIDS LVT terminals'. MIDS stands for Multifunctional Information Distribution System, and LVT refers to the Low Volume Terminal. These are typically used for secure, jam-resistant tactical data links, enabling voice and data communication between various military platforms such as aircraft, ships, and ground units. Key technical specifications would include frequency bands, data rates, encryption capabilities, interoperability standards (like Link 16), and physical ruggedization requirements for military environments. Understanding these specifications is crucial for justifying the procurement and assessing the value, as highly specialized military-grade equipment often commands a premium price and may have limited sources.
Why was this contract not competed, and what justification was provided for a sole-source award?
The data explicitly states 'NOT COMPETED', indicating a sole-source award. Government agencies typically sole-source procurements when only one responsible source can provide the required supplies or services. Common justifications include unique capabilities, proprietary technology, urgent and compelling needs where competition is not feasible, or when a previous contract was awarded under specific circumstances that limit further competition. Without access to the specific justification documentation (e.g., a Justification and Approval document), it's impossible to know the precise reasons. However, for MIDS LVT terminals, it's possible that Viasat Inc. holds specific patents, unique manufacturing processes, or is the sole authorized distributor for certain critical components, necessitating a sole-source approach.
How does the unit cost of these terminals compare to similar procurements or commercial equivalents?
The total contract value is $20,999,287 over a period of 556 days (approximately 18 months). The number of terminals procured is not explicitly stated, but the contract covers multiple CLINs (Contract Line Item Numbers) for terminals (CLINS 2001, 2004, 0600, 0600 and CLIN 1000). To assess unit cost, we would need to know the quantity of terminals under each CLIN. If we assume, for illustrative purposes, that the $20.9 million covers, say, 100 terminals, the average unit cost would be around $210,000 per terminal. MIDS LVT terminals are advanced, secure military communication devices, and their cost is significantly higher than standard commercial communication equipment. Comparisons would need to be made with other military procurements of similar MIDS LVT terminals or related tactical data link systems, considering factors like quantity, specific configurations, and year of procurement.
What is Viasat Inc.'s track record with the Department of Defense for similar communication systems?
Viasat Inc. is a well-established company with a significant history of providing satellite-based networking, secure communication systems, and related services to the Department of Defense (DoD) and other government agencies. They are known for their high-capacity satellite networks and secure communication solutions, often used in military applications for data, voice, and video transmission. Their track record includes numerous contracts for tactical data links, airborne communication systems, and secure ground terminals. While this specific contract is for MIDS LVT terminals, Viasat's broader experience in military communications suggests they possess the technical capability and understanding of DoD requirements. However, the 'NOT COMPETED' status for this particular order warrants scrutiny regardless of the contractor's general reputation.
What are the potential risks associated with a sole-source award for critical communication equipment?
The primary risks associated with a sole-source award for critical communication equipment include: 1) Higher Costs: Without competition, the contractor may charge a premium price, leading to inefficient use of taxpayer funds. 2) Reduced Innovation: The lack of competitive pressure can disincentivize the contractor from innovating or offering more cost-effective solutions. 3) Dependency: The government becomes dependent on a single supplier, which can be problematic if that supplier faces financial difficulties, production issues, or changes its business strategy. 4) Limited Flexibility: If requirements change, the government may have fewer options or face significant costs to transition to a different supplier. 5) Potential for Quality Issues: While not guaranteed, reduced oversight and competition can sometimes correlate with a less rigorous focus on quality control, although this is highly dependent on the specific contractor and oversight mechanisms in place.
How does this contract fit into the broader landscape of military communication procurements?
This contract for MIDS LVT terminals fits into the broader DoD strategy of enhancing tactical data links and secure communication capabilities across various platforms. MIDS LVT terminals are a key component for enabling situational awareness and command and control in contested environments, particularly through the Link 16 network. Procurements like this are essential for maintaining and upgrading the communication infrastructure that supports joint operations. The DoD frequently procures such systems to ensure interoperability and technological superiority. The trend in military communications is towards higher bandwidth, increased security, and greater network-centric capabilities, making procurements of advanced terminals like these a recurring necessity.
Industry Classification
NAICS: Manufacturing › Communications Equipment Manufacturing › Other Communications Equipment Manufacturing
Product/Service Code: COMM/DETECT/COHERENT RADIATION
Competition & Pricing
Extent Competed: NOT COMPETED
Solicitation Procedures: ONLY ONE SOURCE
Offers Received: 1
Pricing Type: FIRM FIXED PRICE (J)
Evaluated Preference: NONE
Contractor Details
Address: 6155 EL CAMINO REAL, CARLSBAD, CA, 49
Business Categories: Category Business, Not Designated a Small Business
Financial Breakdown
Contract Ceiling: $34,486,557
Exercised Options: $34,486,557
Current Obligation: $34,486,557
Contract Characteristics
Cost or Pricing Data: NO
Parent Contract
Parent Award PIID: N0003900D2101
IDV Type: IDC
Timeline
Start Date: 2009-06-23
Current End Date: 2010-12-31
Potential End Date: 2010-12-31 00:00:00
Last Modified: 2014-01-31
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