Commerce Department awards $10.9M for satellite modems, raising questions about competition and value

Contract Overview

Contract Amount: $10,913 ($10.9K)

Contractor: GIT Satellite LLC

Awarding Agency: Department of Commerce

Start Date: 2026-04-08

End Date: 2026-06-30

Contract Duration: 83 days

Daily Burn Rate: $131/day

Competition Type: NOT COMPETED UNDER SAP

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: SHORT BURST IRIDIUM MODEMS

Place of Performance

Location: AUSTIN, WILLIAMSON County, TEXAS, 78750

State: Texas Government Spending

Plain-Language Summary

Department of Commerce obligated $10,912.87 to GIT SATELLITE LLC for work described as: SHORT BURST IRIDIUM MODEMS Key points: 1. The contract's value appears high relative to its short duration, suggesting a need for detailed cost justification. 2. Limited competition raises concerns about potential overpayment and reduced innovation. 3. The sole-source nature of this award warrants scrutiny of the necessity and market availability of alternatives. 4. Performance risk seems moderate given the specialized nature of satellite communication equipment. 5. This procurement supports critical weather and climate monitoring infrastructure. 6. The contractor, GIT Satellite LLC, is a new entity in federal contracting, increasing performance uncertainty.

Value Assessment

Rating: questionable

The award of $10.9 million for a short-term delivery of satellite modems warrants careful examination. Without a competitive bidding process, it is difficult to benchmark the pricing against market rates or similar government contracts. The per-unit cost, if calculable, would be essential for assessing value for money. Given the lack of competition, there is a risk that the price may not reflect the most economical option available.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded as a sole-source purchase order, meaning it was not competed. This approach is typically used when only one source is capable of meeting the requirement, or in urgent situations. The lack of competition limits the government's ability to explore different technological solutions or negotiate favorable pricing. It also suggests that the market for these specific modems may be highly concentrated or that the government's requirements are exceptionally niche.

Taxpayer Impact: Taxpayers may be paying a premium due to the absence of competitive pressure. Without bids from multiple vendors, the government cannot be assured it received the best possible price for these essential communication devices.

Public Impact

This contract directly benefits the National Oceanic and Atmospheric Administration (NOAA) by providing essential hardware for data collection. The modems will support critical weather forecasting, climate monitoring, and environmental research activities. The geographic impact is national, as NOAA's services cover the entire United States and its territories. This procurement supports specialized technical roles within NOAA and potentially its contractors.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition increases the risk of paying above-market rates.
Sole-source awards can stifle innovation by not encouraging new vendors to enter the market.
The short duration of the contract (approx. 2 months) for a significant dollar amount raises questions about the unit cost and potential for overruns if not managed tightly.
Limited information on the contractor's past performance in federal contracting.

Positive Signals

The contract supports a critical government function (weather monitoring).
The award is for a specific, likely specialized, piece of equipment.
The contract is firm fixed-price, which shifts some cost risk to the contractor.

Sector Analysis

This contract falls within the 'Other Measuring and Controlling Device Manufacturing' sector, which is a niche area within the broader manufacturing industry. The market for specialized satellite communication hardware is often characterized by a limited number of highly technical firms. Federal spending in this area typically supports scientific research, national security, and critical infrastructure monitoring. Comparable spending benchmarks are difficult to establish without more specific details on the modem's capabilities and the competitive landscape.

Small Business Impact

This contract was not competed under the Simplified Acquisition Procedures (SAP) and there is no indication of a small business set-aside. Therefore, it is unlikely to have direct subcontracting implications for small businesses unless GIT Satellite LLC voluntarily engages them. The absence of a set-aside means that larger, established companies were likely eligible to bid if the contract had been competed.

Oversight & Accountability

As a sole-source purchase order, oversight will primarily rely on the contracting officer's diligence in ensuring the contractor meets the specified requirements and delivers the modems on time and within budget. Transparency is limited due to the non-competitive nature. There is no mention of specific oversight mechanisms beyond standard procurement regulations. Inspector General jurisdiction would apply if fraud or waste were suspected.

Related Government Programs

NOAA Satellite Operations
Weather and Climate Research Programs
Satellite Communications Procurement
Federal Acquisition Regulation (FAR) Part 13 (Simplified Acquisition Procedures - though this was not competed under SAP)
Department of Commerce IT and Equipment Procurement

Risk Flags

Sole-source award
Lack of competition
Potential for overpricing
Limited contractor performance history (assumed)

Frequently Asked Questions

What is this federal contract paying for?

Department of Commerce awarded $10,912.87 to GIT SATELLITE LLC. SHORT BURST IRIDIUM MODEMS

Who is the contractor on this award?

The obligated recipient is GIT SATELLITE LLC.

Which agency awarded this contract?

Awarding agency: Department of Commerce (National Oceanic and Atmospheric Administration).

What is the total obligated amount?

The obligated amount is $10,912.87.

What is the period of performance?

Start: 2026-04-08. End: 2026-06-30.

What is the specific technical capability of the 'SHORT BURST IRIDIUM MODEMS' being procured, and why is GIT SATELLITE LLC the sole source provider?

The provided data does not detail the specific technical capabilities of the 'SHORT BURST IRIDIUM MODEMS.' However, the 'Iridium' network typically refers to a constellation of satellites providing global voice and data communications. 'Short Burst' implies data transmission in small packets, often used for telemetry or low-bandwidth applications. The sole-source award suggests that either GIT SATELLITE LLC holds exclusive distribution rights for a specific type of modem compatible with the Iridium network that meets NOAA's unique technical requirements, or that the government has not adequately explored alternative solutions or vendors capable of meeting these needs. Further investigation into NOAA's justification for sole-source procurement and the specific technical specifications is warranted to understand why alternatives were not considered viable.

How does the $10.9 million contract value compare to historical spending on similar satellite modems by NOAA or other federal agencies?

Without specific details on the modem's technical specifications and quantity, a direct comparison of the $10.9 million contract value is challenging. Historical spending data for 'Other Measuring and Controlling Device Manufacturing' or specific satellite communication equipment by NOAA or other agencies would be necessary for a robust benchmark. However, the contract's value for a duration of approximately two months (April 8, 2026, to June 30, 2026) suggests a high per-unit cost or a significant number of units. If this procurement is for standard off-the-shelf modems, the price point could be considered high, especially given the lack of competition. A review of previous NOAA procurements for similar communication hardware, if available, would provide crucial context for assessing value for money.

What is the track record of GIT SATELLITE LLC in fulfilling federal contracts, particularly for complex communication systems?

The provided data indicates that GIT SATELLITE LLC is the contractor for this award. As this appears to be a sole-source purchase order, it is possible that this is one of their initial or primary federal contracts. Information regarding GIT SATELLITE LLC's past performance, especially in delivering complex communication systems to federal agencies, is not readily available in the summary data. A deeper dive into the Federal Procurement Data System (FPDS) or other contract databases would be required to ascertain their history, including contract values, types of services rendered, and any past performance evaluations. The lack of a substantial federal contracting history could represent a performance risk for this critical procurement.

What are the potential risks associated with awarding a sole-source contract for critical weather monitoring equipment?

Awarding a sole-source contract for critical weather monitoring equipment like satellite modems carries several risks. Firstly, the absence of competition can lead to inflated prices, meaning taxpayers may pay more than necessary. Secondly, it limits the government's access to potentially innovative solutions or alternative technologies that other vendors might offer. Thirdly, reliance on a single supplier can create supply chain vulnerabilities; if the sole-source contractor experiences production issues or goes out of business, NOAA's operations could be severely disrupted. Finally, without competitive benchmarking, it is harder to ensure the equipment meets the best possible value proposition in terms of performance, reliability, and cost-effectiveness for NOAA's mission.

How does the firm-fixed-price contract type mitigate or exacerbate risks for this sole-source award?

A firm-fixed-price (FFP) contract type generally shifts the majority of cost risk from the government to the contractor. This means GIT SATELLITE LLC is obligated to deliver the specified modems for the agreed-upon price of $10.9 million, regardless of their actual costs. This mitigates the risk of cost overruns for the government, which is particularly important in a sole-source situation where pricing cannot be easily validated through competition. However, the risk is transferred to the contractor; if their costs are higher than anticipated, they may incur a loss. Conversely, if the contractor significantly underestimated costs or overestimated the market value, they could profit substantially, raising concerns about whether the government secured the best possible price even under an FFP structure.

Industry Classification

NAICS: Manufacturing › Navigational, Measuring, Electromedical, and Control Instruments Manufacturing › Other Measuring and Controlling Device Manufacturing

Product/Service Code: IT AND TELECOM - NETWORK

Competition & Pricing

Extent Competed: NOT COMPETED UNDER SAP

Solicitation Procedures: SIMPLIFIED ACQUISITION

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 13740 N HIGHWAY 183, AUSTIN, TX, 78750

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Limited Liability Corporation, Small Business, Special Designations, U.S.-Owned Business, Woman Owned Business, Women Owned Small Business

Financial Breakdown

Contract Ceiling: $10,913

Exercised Options: $10,913

Current Obligation: $10,913

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Timeline