DoD's $14.3M Super-Synchronous Satellite System contract awarded to Blue Canyon Technologies for R&D

Contract Overview

Contract Amount: $14,323,847 ($14.3M)

Contractor: Blue Canyon Technologies LLC

Awarding Agency: Department of Defense

Start Date: 2020-12-11

End Date: 2027-12-31

Contract Duration: 2,576 days

Daily Burn Rate: $5.6K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: R&D

Official Description: SUPER-SYNCHRONOUS SMALL SATELLITE SPACE SURVEILLANCE SYSTEM

Place of Performance

Location: LAFAYETTE, BOULDER County, COLORADO, 80026

State: Colorado Government Spending

Plain-Language Summary

Department of Defense obligated $14.3 million to BLUE CANYON TECHNOLOGIES LLC for work described as: SUPER-SYNCHRONOUS SMALL SATELLITE SPACE SURVEILLANCE SYSTEM Key points: 1. Contract focuses on advanced research and development in physical and engineering sciences. 2. Awarded through full and open competition, suggesting a robust market for this technology. 3. The definitive contract type indicates a long-term relationship for a specific project. 4. The cost-plus-fixed-fee structure may incentivize contractor efficiency while managing risk. 5. The contract duration of over 7 years suggests a significant, multi-phase development effort. 6. The small business set-aside status is false, indicating no specific preference for small businesses in this award.

Value Assessment

Rating: good

Benchmarking the value of this R&D contract is challenging due to its specialized nature. However, the award amount of $14.3 million for a multi-year satellite surveillance system appears reasonable given the complexity and technological advancement required. The cost-plus-fixed-fee (CPFF) pricing structure is common for R&D efforts where final costs are uncertain, but it necessitates careful oversight to ensure value for money. Comparing this to other advanced satellite development contracts would provide further context on its cost-effectiveness.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that multiple capable vendors were likely solicited and had the opportunity to bid. The specific number of bidders is not provided, but the open competition suggests a healthy market for this type of specialized satellite technology. This process is designed to foster price discovery and ensure the government receives competitive offers.

Taxpayer Impact: Full and open competition generally benefits taxpayers by driving down costs through market forces and encouraging innovation among a wider pool of potential contractors.

Public Impact

The primary beneficiary is the Department of Defense, specifically the Air Force, which will gain enhanced capabilities in space surveillance. The contract will deliver research and development services for a 'Super-Synchronous Small Satellite Space Surveillance System'. The geographic impact is national, focusing on defense capabilities, with potential for global operational implications. Workforce implications include specialized engineering and scientific roles within Blue Canyon Technologies and potentially its subcontractors.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns inherent in CPFF contracts if not closely monitored.
Long contract duration may lead to scope creep or evolving technological requirements.
Dependence on a single contractor for a critical surveillance system could pose risks.

Positive Signals

Award to a specialized company (Blue Canyon Technologies) suggests access to cutting-edge expertise.
Full and open competition indicates a mature market and potential for innovation.
Clear R&D focus on a critical defense capability (space surveillance).

Sector Analysis

The contract falls within the Research and Development sector, specifically focusing on advanced physical and engineering sciences related to space technology. The market for small satellite development and space-based surveillance systems is rapidly growing, driven by both commercial and defense interests. This contract represents a significant investment in enhancing national security through technological superiority in orbit.

Small Business Impact

This contract was not set aside for small businesses, as indicated by the 'sb: false' field. Therefore, there are no direct subcontracting requirements mandated for small businesses under this specific award. The primary contractor, Blue Canyon Technologies, is itself a significant player in the small satellite industry, but this award does not leverage small business set-aside provisions.

Oversight & Accountability

Oversight for this definitive contract will likely be managed by the contracting officer and program management office within the Department of the Air Force. The CPFF structure necessitates rigorous financial oversight and performance monitoring to ensure adherence to the fixed fee and efficient use of cost reimbursements. Transparency will depend on the agency's reporting practices and any public disclosures related to the R&D progress.

Related Government Programs

Space Surveillance Systems
Satellite Technology Development
Advanced Research and Development Contracts
Department of Defense Research Contracts
Air Force Satellite Programs

Risk Flags

Potential for cost overruns due to CPFF structure.
Risk of technological obsolescence over the long contract duration.
Dependence on a single contractor for critical R&D.
Need for robust oversight to ensure value for money.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $14.3 million to BLUE CANYON TECHNOLOGIES LLC. SUPER-SYNCHRONOUS SMALL SATELLITE SPACE SURVEILLANCE SYSTEM

Who is the contractor on this award?

The obligated recipient is BLUE CANYON TECHNOLOGIES LLC.

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 $14.3 million.

What is the period of performance?

Start: 2020-12-11. End: 2027-12-31.

What is the specific technological innovation expected from the 'Super-Synchronous Small Satellite Space Surveillance System'?

The contract aims to develop a system that enhances space surveillance capabilities, likely through advanced sensor technology, improved data processing, or novel satellite constellation designs. 'Super-synchronous' may refer to orbital mechanics that provide persistent or unique coverage. The 'small satellite' aspect suggests a focus on cost-effectiveness and rapid deployment compared to traditional, larger platforms. The R&D effort will explore the feasibility and performance of these integrated technologies to provide superior monitoring of objects in space, crucial for national security and space domain awareness.

How does the cost-plus-fixed-fee (CPFF) structure compare to other contract types for R&D, and what are its implications for value?

The CPFF structure is common for R&D where the scope and final costs are not precisely definable at the outset. The government agrees to pay the contractor's actual allowable costs plus a fixed fee representing profit. This incentivizes the contractor to complete the work efficiently to maximize their profit margin within the fixed fee. However, it requires robust government oversight to control costs and prevent unnecessary expenditures. Compared to fixed-price contracts, CPFF offers more flexibility for evolving R&D but potentially less cost certainty for the government. Value is realized if the innovative outcome justifies the cost and the contractor manages expenses effectively.

What is Blue Canyon Technologies' track record in developing advanced satellite systems for the government?

Blue Canyon Technologies (BCT) has established itself as a significant player in the small satellite industry, known for its rapid development and production capabilities. Prior to its acquisition by RTX (Raytheon Technologies) in 2020, BCT had successfully delivered numerous small satellite buses and payloads for various commercial and government missions. Their expertise lies in providing agile and cost-effective satellite solutions. While specific details on prior DoD surveillance contracts may be limited publicly, their overall portfolio demonstrates a strong capability in designing, building, and integrating satellite systems, making them a credible choice for this R&D effort.

What are the potential risks associated with the long duration (over 7 years) of this contract?

A contract spanning over seven years presents several potential risks. Firstly, technological obsolescence is a significant concern; the technology landscape in space systems evolves rapidly, and the system developed might be outdated by the time it is fully operational. Secondly, requirements drift or scope creep can occur as the program progresses and understanding of needs evolves, potentially leading to cost overruns and schedule delays. Thirdly, maintaining consistent program oversight and contractor performance over such an extended period can be challenging. Finally, geopolitical or strategic shifts could alter the perceived importance or application of the surveillance system, impacting its ultimate utility.

How does this contract fit into the broader landscape of US government investment in space-based defense and surveillance?

This contract aligns with the broader US government strategy to enhance its space domain awareness and maintain a technological advantage in space. Investments in space surveillance are critical for monitoring potential threats, tracking space debris, and ensuring the security of national assets in orbit. The focus on small satellites reflects a trend towards more distributed, resilient, and potentially lower-cost architectures compared to traditional large, monolithic space systems. This specific R&D effort contributes to the development of next-generation capabilities that support the Space Force's mission and broader national security objectives in an increasingly contested space environment.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Scientific Research and Development Services › Research and Development in the Physical, Engineering, and Life Sciences (except Nanotechnology and Biotechnology)

Product/Service Code: RESEARCH AND DEVELOPMENT › C – National Defense R&D Services

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: BASIC RESEARCH

Offers Received: 1

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Address: 2550 CRESCENT DR, LAFAYETTE, CO, 80026

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

Financial Breakdown

Contract Ceiling: $19,374,473

Exercised Options: $19,374,473

Current Obligation: $14,323,847

Subaward Activity

Number of Subawards: 1

Total Subaward Amount: $114,910

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline