Dod's $36.9M Geolocation Global Support Services Contract Awarded to Kratos S1, Inc. Raises Value Concerns

Contract Overview

Contract Amount: $36,934,132 ($36.9M)

Contractor: Kratos S1, Inc.

Awarding Agency: Department of Defense

Start Date: 2019-12-01

End Date: 2024-11-30

Contract Duration: 1,826 days

Daily Burn Rate: $20.2K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: GEOLOCATION GLOBAL SUPPORT SERVICES

Place of Performance

Location: COLORADO SPRINGS, EL PASO County, COLORADO, 80921

State: Colorado Government Spending

Plain-Language Summary

Department of Defense obligated $36.9 million to KRATOS S1, INC. for work described as: GEOLOCATION GLOBAL SUPPORT SERVICES Key points: 1. The contract's value proposition is unclear given the lack of competitive bidding. 2. Limited competition may have led to suboptimal pricing for taxpayers. 3. The contract duration of 1826 days suggests a long-term need for these services. 4. Performance context is limited due to the absence of a competitive baseline. 5. This contract falls within the Satellite Telecommunications sector, supporting critical DoD operations. 6. The firm fixed-price structure aims to control costs, but its effectiveness is unproven without competition.

Value Assessment

Rating: questionable

Benchmarking the value of this $36.9 million contract is challenging due to its sole-source nature. Without comparable bids or market analysis, it's difficult to ascertain if the pricing reflects fair market value. The firm fixed-price (FFP) contract type suggests an attempt to cap costs, but the absence of competition means there's no external validation of the negotiated price. Further analysis would require access to the contractor's cost structure or a comparison with similar sole-source procurements for comparable services.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning only one vendor, KRATOS S1, INC., was solicited. The data indicates it was 'NOT COMPETED,' suggesting that either a waiver was granted or the circumstances of the procurement did not allow for a broader solicitation. This lack of competition limits the government's ability to leverage market forces to achieve the best possible price and terms.

Taxpayer Impact: Sole-source awards can potentially lead to higher costs for taxpayers as there is no competitive pressure to drive down prices. This limits the government's ability to ensure it is receiving the most economical solution available.

Public Impact

The primary beneficiaries are the Department of Defense, specifically the Department of the Air Force, which receives critical satellite telecommunications support. The services delivered are essential for global geolocation support, likely impacting intelligence, surveillance, and reconnaissance (ISR) capabilities. The geographic impact is global, as indicated by the contract title 'GEOLOCATION GLOBAL SUPPORT SERVICES'. Workforce implications are likely concentrated within KRATOS S1, INC. and potentially its subcontractors, though specific numbers are not provided.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition raises concerns about potential overpricing and reduced value for taxpayer dollars.
Sole-source awards can stifle innovation by not exposing the government to alternative solutions from other vendors.
Transparency is limited due to the non-competitive nature of the award, making independent value assessment difficult.

Positive Signals

The firm fixed-price contract type provides cost certainty for the government, assuming the price is fair.
The contract is awarded to a single entity, potentially allowing for streamlined communication and management.
The long contract duration suggests a stable, ongoing need for these specialized services.

Sector Analysis

This contract falls within the Satellite Telecommunications industry, a critical component of the broader Information Technology and Defense sectors. The market is characterized by high barriers to entry due to specialized technology and infrastructure requirements. Spending in this area is often driven by national security needs, with significant government investment in maintaining robust global communication and positioning capabilities. Comparable spending benchmarks would typically involve other large-scale satellite service contracts awarded to major defense contractors.

Small Business Impact

The data indicates that this contract was not set aside for small businesses (ss: false, sb: false). Therefore, there are no direct subcontracting implications for small businesses stemming from a small business set-aside. The primary contractor, KRATOS S1, INC., is likely a large business, and any subcontracting would be at their discretion, not mandated by a set-aside provision. This means the direct economic benefit to the small business ecosystem from this specific award is likely minimal.

Oversight & Accountability

Oversight mechanisms for this contract would typically be managed by the contracting officer and the relevant program office within the Department of the Air Force. Accountability measures are inherent in the firm fixed-price contract structure, which obligates the contractor to deliver specified services. Transparency is somewhat limited due to the sole-source nature of the award, but contract details should be available through federal procurement databases. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

Global Positioning System (GPS) Services
Satellite Communications Services
Defense Telecommunications Infrastructure
Aerospace and Defense Contracting
Information Technology Support Services

Risk Flags

Sole-source award
Lack of competition
Potential for overpricing
Limited transparency

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $36.9 million to KRATOS S1, INC.. GEOLOCATION GLOBAL SUPPORT SERVICES

Who is the contractor on this award?

The obligated recipient is KRATOS S1, INC..

Which agency awarded this contract?

Awarding agency: Department of Defense (Department of the Air Force).

What is the total obligated amount?

The obligated amount is $36.9 million.

What is the period of performance?

Start: 2019-12-01. End: 2024-11-30.

What is the specific nature of the 'GEOLOCATION GLOBAL SUPPORT SERVICES' provided under this contract?

The contract title 'GEOLOCATION GLOBAL SUPPORT SERVICES' suggests services related to maintaining, operating, or enhancing systems that provide location-based information globally. This could encompass a range of activities, including the management of satellite ground stations, data processing for positioning, navigation, and timing (PNT) signals, ensuring the integrity and availability of these services, and potentially providing technical support or system upgrades. Given the Department of Defense (DoD) as the agency, these services are likely critical for military operations, intelligence gathering, and strategic command and control, ensuring that U.S. forces and allies have reliable access to accurate location data worldwide.

How does the $36.9 million contract value compare to similar satellite telecommunications contracts awarded by the DoD?

Comparing the $36.9 million value of this contract to similar DoD satellite telecommunications contracts requires access to a broader dataset of recent awards. However, for a definitive contract spanning nearly five years (December 2019 to November 2024), this value is moderate. Large-scale satellite programs, including satellite manufacturing, launch services, or extensive network infrastructure development, can easily reach hundreds of millions or even billions of dollars. Conversely, contracts for specific support services, software maintenance, or localized ground station operations might fall within this range. Without knowing the precise scope and deliverables, a direct comparison is difficult, but it appears to be a significant, yet not exceptionally large, investment for ongoing global support.

What are the primary risks associated with awarding a contract of this magnitude on a sole-source basis?

The primary risks associated with awarding a $36.9 million contract on a sole-source basis are significant. Firstly, there is a heightened risk of paying an inflated price due to the lack of competitive bidding, which can lead to poor value for taxpayer money. Secondly, the government may miss out on innovative solutions or technological advancements that other potential vendors could offer. Thirdly, sole-source awards can create a perception of favoritism or a lack of transparency, potentially undermining public trust. Lastly, the government becomes heavily reliant on a single contractor, increasing the risk associated with contractor performance issues, financial instability, or strategic shifts by the vendor.

What is KRATOS S1, INC.'s track record with the federal government, particularly in satellite telecommunications?

KRATOS S1, INC. has a notable track record with the federal government, particularly within the defense and aerospace sectors. While specific details on their performance for this particular 'GEOLOCATION GLOBAL SUPPORT SERVICES' contract require deeper investigation into performance reports and contract histories, Kratos Defense & Security Solutions (the parent entity or a closely related affiliate) is known for providing a wide array of products and services, including satellite communications, electronic warfare, target drones, and network engineering. Their involvement in numerous government contracts suggests experience in navigating federal procurement processes and delivering complex technological solutions. A thorough review would involve examining past performance evaluations, any past disputes or contract terminations, and the breadth of their contract portfolio.

How has federal spending in the satellite telecommunications sector evolved over the past five years, and where does this contract fit?

Federal spending in the satellite telecommunications sector has generally seen consistent or increasing investment over the past five years, driven by national security imperatives, the expansion of global communication networks, and the increasing reliance on space-based assets for intelligence, surveillance, reconnaissance (ISR), and navigation. Agencies like the Department of Defense (DoD), NASA, and intelligence agencies are major contributors to this spending. This $36.9 million contract for 'GEOLOCATION GLOBAL SUPPORT SERVICES' fits within the operational support and sustainment segment of this spending. It represents a portion of the broader investment required to maintain and operate the complex ecosystem of satellites, ground infrastructure, and data services that underpin critical government functions, rather than funding the development or acquisition of new satellite systems.

Industry Classification

NAICS: Information › Satellite Telecommunications › Satellite Telecommunications

Product/Service Code: IT AND TELECOM - INFORMATION TECHNOLOGY AND TELECOMMUNICATIONS › ADP AND TELECOMMUNICATIONS

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Solicitation ID: FA461020R0003

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Kratos Defense & Security Solutions, Inc.

Address: 12515 ACADEMY RIDGE VW, COLORADO SPRINGS, CO, 80921

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Manufacturer of Goods, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $39,114,207

Exercised Options: $37,654,968

Current Obligation: $36,934,132

Actual Outlays: $7,107,357

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Timeline