DoD's $61.8M satellite service contract with Artel LLC awarded in 2009, ending in 2011

Contract Overview

Contract Amount: $61,824,696 ($61.8M)

Contractor: Artel LLC

Awarding Agency: Department of Defense

Start Date: 2009-03-15

End Date: 2011-02-15

Contract Duration: 702 days

Daily Burn Rate: $88.1K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

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 $61.8 million to ARTEL LLC for work described as: SATELLITE SERVICE Key points: 1. The contract's value of $61.8 million over its term suggests a significant investment in satellite communication capabilities. 2. Awarded under full and open competition, the contract likely benefited from a competitive bidding process to secure favorable pricing. 3. The firm-fixed-price contract type indicates that the contractor bore the risk of cost overruns, potentially leading to greater cost certainty for the government. 4. The contract duration of approximately two years (702 days) is relatively short for a major service, suggesting it might have been a bridge or a specific project. 5. The award to Artel LLC, a known entity in the telecommunications sector, provides some level of performance predictability. 6. The absence of small business set-aside flags indicates this was not specifically targeted to boost small business participation.

Value Assessment

Rating: fair

Benchmarking the value of this $61.8 million contract is challenging without more specific details on the satellite services provided and their scope. However, the firm-fixed-price nature suggests an attempt to control costs. The contract's value relative to the duration (approximately 2 years) implies a substantial annual expenditure, which would need to be compared against similar government or commercial satellite service contracts to assess true value for money. The provided benchmark of $8.8 million (br) might represent an average annual cost or a comparable contract value, suggesting this contract was within a reasonable range if it aligns with similar service levels.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under 'FULL AND OPEN COMPETITION,' indicating that all responsible sources were permitted to submit bids. This approach is generally favored for maximizing competition and achieving the best possible prices and terms for the government. The number of bidders is not specified, but the open competition suggests a potentially robust selection process, which should theoretically lead to competitive pricing and innovative solutions.

Taxpayer Impact: A full and open competition process is beneficial for taxpayers as it increases the likelihood of obtaining services at competitive market rates, preventing potential overpricing that could occur with less competitive solicitations.

Public Impact

The Department of Defense (DoD) is the primary beneficiary, receiving essential satellite communication services. These services likely supported critical military operations, intelligence gathering, and command and control functions. The geographic impact could be global, depending on the satellite network's coverage, supporting deployed forces worldwide. The contract supported the workforce within Artel LLC and potentially its subcontractors, contributing to employment in the telecommunications and defense sectors.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of specific performance metrics makes it difficult to assess the quality and reliability of the satellite services delivered.
The contract's relatively short duration might indicate a temporary solution or a gap in longer-term strategic planning for satellite communications.
Without details on the specific technologies used, it's hard to determine if the services were state-of-the-art or potentially outdated.
The absence of small business participation flags raises questions about opportunities for smaller, innovative companies in this contract.

Positive Signals

Awarded under full and open competition, suggesting a fair and transparent procurement process.
The firm-fixed-price contract type shifts cost-overrun risk to the contractor, providing budget certainty.
Artel LLC is a recognized provider in the satellite communications industry, implying a degree of established capability.
The contract was awarded by the Defense Information Systems Agency (DISA), a key agency for military IT and communications, suggesting alignment with strategic needs.

Sector Analysis

This contract falls within the broader telecommunications and satellite services sector, a critical component of national defense and global connectivity. The market is characterized by high barriers to entry due to technological complexity and infrastructure investment. Spending in this sector by government agencies like the DoD is substantial, often driven by the need for secure, reliable, and globally accessible communication networks. Comparable spending benchmarks would typically involve analyzing annual budgets for satellite bandwidth, ground station support, and related network management services across various government entities.

Small Business Impact

The data indicates that this contract was not set aside for small businesses (ss: false, sb: false). This suggests that the procurement was conducted without specific provisions to encourage or mandate small business participation. Consequently, the primary contractor, Artel LLC, likely handled the service delivery, with potential subcontracting opportunities for small businesses being dependent on Artel's own sourcing strategies rather than contractual requirements. This approach may limit direct opportunities for small businesses to engage with the government on this specific contract.

Oversight & Accountability

Oversight for this contract would typically be managed by the contracting officers and program managers within the Defense Information Systems Agency (DISA) and the Department of Defense. Accountability measures would be embedded in the contract's terms and conditions, including performance standards and payment schedules tied to successful service delivery. Transparency is generally facilitated through contract award databases like FPDS, which provide basic information on contract value, parties involved, and competition type. Specific Inspector General (IG) jurisdiction would depend on the nature of any potential fraud, waste, or abuse identified.

Related Government Programs

Defense Information Systems Agency (DISA) Contracts
Department of Defense Satellite Communications
Global Satellite Services
Secure Communication Networks
Military Telecommunications

Risk Flags

Contract duration is relatively short for a major service.
Specific performance metrics and outcomes are not detailed.
Potential for outdated technology if not actively managed.
Limited visibility into subcontracting opportunities for small businesses.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $61.8 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 $61.8 million.

What is the period of performance?

Start: 2009-03-15. End: 2011-02-15.

What specific satellite services were provided under this contract, and what was their intended operational purpose?

The provided data identifies the service as 'SATELLITE SERVICE' (d: 'SATELLITE SERVICE') but lacks granular detail on the specific types of services rendered. These could range from dedicated bandwidth provisioning, managed satellite network services, secure voice and data transmission, to potentially video conferencing or imagery dissemination. Given the awarding agency is the Department of Defense (DoD) and the procuring activity is the Defense Information Systems Agency (DISA), the operational purpose was almost certainly to support military command and control, intelligence, surveillance, reconnaissance (ISR), logistics, or other critical warfighting functions. The exact nature of the services would dictate their impact on mission readiness and operational effectiveness.

How does the contract's value of approximately $61.8 million compare to other similar satellite service contracts awarded by the DoD during that period?

Comparing the $61.8 million value requires context regarding the contract's duration (March 2009 - February 2011, approx. 2 years) and the specific services procured. The annual value approximates $30.9 million. During the late 2000s and early 2010s, the DoD was a major consumer of satellite services, with numerous contracts for various needs, including strategic (e.g., Wideband Global SATCOM) and tactical communications. Contracts for similar durations and scopes could range from tens to hundreds of millions of dollars, depending on bandwidth, geographic coverage, security requirements, and service level agreements. The benchmark value provided ('br': 88069) is unclear in its unit or context but if it represents an average annual cost for a comparable service, this contract's annual spend of ~$30.9M would be significantly higher, suggesting either a larger scope, higher bandwidth, or premium services. Without more detailed service descriptions and competitor data, a precise comparison is difficult.

What were the key performance indicators (KPIs) or service level agreements (SLAs) associated with this contract, and did Artel LLC meet them?

The provided data does not include specific Key Performance Indicators (KPIs) or Service Level Agreements (SLAs) for this contract. Typically, satellite service contracts would include metrics related to uptime/availability (e.g., 99.9% availability), latency, bandwidth guarantees, data throughput, and potentially response times for technical support or restoration of service. Meeting these KPIs would be crucial for ensuring the reliability of military communications. Without access to performance reports or contract modifications, it is impossible to determine if Artel LLC met all contractual obligations. However, the firm-fixed-price nature suggests that penalties might apply for significant failures, while successful performance would lead to full payment.

What is Artel LLC's track record with the DoD, particularly concerning satellite communication services, prior to and after this contract?

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. Prior to this 2009 contract, Artel held various telecommunications contracts, often involving satellite capabilities for military and intelligence agencies. Following this contract, Artel continued to secure significant awards from DISA and other DoD entities, often related to global network services, satellite communications, and secure voice/data transmission. Their sustained presence suggests a generally positive track record in meeting DoD requirements, although specific performance details for individual contracts are not publicly detailed. Their ability to win subsequent, often larger, contracts indicates a level of trust and capability recognized by the DoD.

Were there any identified risks or challenges associated with this contract, and how were they managed?

Potential risks inherent in satellite service contracts include technical failures (satellite malfunction, ground station issues), spectrum interference, cybersecurity threats, geopolitical instability affecting ground infrastructure or satellite operations, and cost overruns (though mitigated by the FFP structure). For this specific contract, the firm-fixed-price (FFP) structure shifts the primary financial risk to the contractor, Artel LLC. Management of operational risks would fall to DISA's program managers and Artel's technical teams, likely involving robust monitoring, contingency planning, and adherence to security protocols. The relatively short duration might suggest that long-term risks were less of a concern or were being addressed through separate, longer-term contracts. Without specific risk mitigation plans or incident reports, a detailed assessment is not possible.

How did the 'full and open competition' procurement method influence the final price and service offerings compared to other potential methods?

A 'full and open competition' procurement method is designed to maximize the number of potential bidders, thereby fostering a competitive environment. This typically drives down prices as contractors vie to offer the most attractive bid. It also encourages innovation as companies seek to differentiate their offerings. Compared to methods like sole-source or limited competition, full and open competition generally leads to better value for the government and taxpayers by ensuring that the selected contractor provides services at or near market rates. For this $61.8 million contract, the open competition likely resulted in a more favorable price than if it had been awarded without a broad bidding process, and potentially led to a wider array of service features being considered.

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Offers Received: 1

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: $61,824,696

Exercised Options: $61,824,696

Current Obligation: $61,824,696

Contract Characteristics

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: DCA20001D5002

IDV Type: IDC

Timeline