DoD awards $6.9M for satellite communications, with limited competition and a 5-year performance period

Contract Overview

Contract Amount: $6,918,000 ($6.9M)

Contractor: Astranis Space Technologies Corp

Awarding Agency: Department of Defense

Start Date: 2022-09-30

End Date: 2027-10-17

Contract Duration: 1,843 days

Daily Burn Rate: $3.8K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: PHASE III SMALL BUSINESS INNOVATION RESEARCH FOR PROTECTED ANTI-JAM TACTICAL SATELLITE COMMUNICATIONS

Place of Performance

Location: SAN FRANCISCO, SAN FRANCISCO County, CALIFORNIA, 94107

State: California Government Spending

Plain-Language Summary

Department of Defense obligated $6.9 million to ASTRANIS SPACE TECHNOLOGIES CORP for work described as: PHASE III SMALL BUSINESS INNOVATION RESEARCH FOR PROTECTED ANTI-JAM TACTICAL SATELLITE COMMUNICATIONS Key points: 1. Contract awarded to Astranis Space Technologies Corp. for specialized satellite communication services. 2. The contract is a Phase III SBIR, indicating a transition from research to a production/service phase. 3. Performance period extends over five years, suggesting a long-term need for these services. 4. The award was not competed, raising questions about potential cost efficiencies and market alternatives. 5. The fixed-price contract type aims to control costs, but the lack of competition may limit price discovery. 6. The service falls under 'All Other Professional, Scientific, and Technical Services,' a broad category.

Value Assessment

Rating: fair

Benchmarking the value of this contract is challenging due to its specific nature as a Phase III SBIR and the lack of competitive bids. The total award amount of $6.9 million over five years suggests a moderate annual spend. Without comparable contracts or detailed cost breakdowns, it's difficult to definitively assess if the pricing represents excellent value for money. The firm fixed-price structure provides cost certainty for the government, but the absence of competition means there's no direct market comparison to gauge efficiency.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, specifically as a Phase III SBIR. Phase III SBIR contracts are intended to commercialize technologies developed under earlier SBIR phases, and they are often awarded non-competitively to the original SBIR awardee. While this streamlines the process for proven technologies, it bypasses the typical competitive bidding process, potentially limiting the government's ability to secure the lowest possible price through market forces.

Taxpayer Impact: The lack of competition means taxpayers may not benefit from the cost savings that could arise from a more open bidding process. The government relies on the established relationship and prior research to justify the sole-source award.

Public Impact

The Department of the Air Force benefits from advanced tactical satellite communication capabilities. This contract supports the development and deployment of protected anti-jam satellite communication systems. The services delivered are critical for maintaining secure and resilient military communication networks. The contract is based in California, potentially impacting the local tech and aerospace workforce.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition may lead to higher costs than a competed contract.
Sole-source award limits opportunities for other innovative companies to enter the market.
Dependence on a single contractor for critical communication technology.

Positive Signals

Phase III SBIR designation suggests a proven technology transitioning to production.
Firm fixed-price contract provides cost certainty.
Long-term performance period indicates a sustained need and potential for stable service delivery.

Sector Analysis

This contract falls within the broader aerospace and defense sector, specifically focusing on satellite communications technology. The market for protected satellite communications is highly specialized, driven by government and commercial demand for secure, resilient, and high-bandwidth connectivity. While specific market size data for this niche is not readily available, the overall satellite communications market is substantial and growing. This contract represents a specific investment in advanced capabilities within this sector, likely building upon prior government-funded research and development.

Small Business Impact

This contract is a Phase III SBIR, which is designed to foster the commercialization of technologies developed by small businesses. While the initial SBIR phases would have involved small businesses, Phase III awards can sometimes be made to larger entities or the original small business may have grown. The data indicates this is a definitive contract, and it is not a small business set-aside. There is no explicit information on subcontracting plans for small businesses, which could be a missed opportunity to further leverage the small business ecosystem.

Oversight & Accountability

As a sole-source award, oversight may focus on ensuring the contractor meets the defined milestones and deliverables within the firm fixed-price structure. The Department of the Air Force is responsible for contract administration. Transparency is limited due to the non-competitive nature. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected. The long performance period necessitates ongoing monitoring of performance and adherence to contract terms.

Related Government Programs

Small Business Innovation Research (SBIR) Program
Satellite Communications Systems
Protected Communications
Tactical Networks
Department of Defense Procurement

Risk Flags

Sole-source award
Lack of competition
Potential for cost overruns
Vendor lock-in risk

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $6.9 million to ASTRANIS SPACE TECHNOLOGIES CORP. PHASE III SMALL BUSINESS INNOVATION RESEARCH FOR PROTECTED ANTI-JAM TACTICAL SATELLITE COMMUNICATIONS

Who is the contractor on this award?

The obligated recipient is ASTRANIS SPACE TECHNOLOGIES CORP.

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 $6.9 million.

What is the period of performance?

Start: 2022-09-30. End: 2027-10-17.

What is the specific technology being developed or procured under this Phase III SBIR contract?

This contract, awarded to Astranis Space Technologies Corp., is for 'PHASE III SMALL BUSINESS INNOVATION RESEARCH FOR PROTECTED ANTI-JAM TACTICAL SATELLITE COMMUNICATIONS.' This indicates the contract aims to transition a previously developed Small Business Innovation Research (SBIR) technology into a production or full-scale development phase. The focus is on creating satellite communication systems that are resistant to jamming (anti-jam) and are suitable for tactical, on-the-move military operations. The 'protected' aspect suggests enhanced security and resilience features are a key requirement. While the exact technical specifications are not detailed in the provided data, the objective is to enhance the Department of Defense's ability to maintain secure and reliable communication links in challenging electronic warfare environments.

How does the $6.9 million award compare to typical spending for similar satellite communication contracts?

Comparing this $6.9 million award requires context regarding the scope and duration. This is a five-year definitive contract, meaning the average annual spend is approximately $1.38 million. This figure is moderate for defense contracts, especially those involving complex hardware like satellites or advanced communication systems. However, Phase III SBIR contracts often represent a transition from R&D to a specific application or limited production, rather than large-scale procurement. Without knowing the specific technological maturity, production volume, or service level agreements, a direct comparison to other satellite communication contracts is difficult. Contracts for large satellite constellations or major system upgrades can run into hundreds of millions or billions of dollars, making this award relatively small in scale. Conversely, for specialized, niche technology development or early-stage commercialization support, it could be significant.

What are the primary risks associated with a sole-source award for critical communication technology?

The primary risk associated with a sole-source award for critical communication technology is the potential for inflated costs due to the lack of competitive pressure. Without competing bids, the government may not achieve the best possible price. Another significant risk is vendor lock-in; the government becomes dependent on a single provider, potentially limiting future flexibility, innovation, or the ability to switch to alternative solutions if they emerge. There's also a risk that the sole-source contractor may not prioritize performance or innovation as aggressively as they would under competitive conditions. Furthermore, the lack of transparency inherent in sole-source awards can obscure potential inefficiencies or suboptimal technical choices. Ensuring robust contract oversight and performance management becomes crucial to mitigate these risks.

What is Astranis Space Technologies Corp.'s track record with government contracts, particularly SBIR programs?

Astranis Space Technologies Corp. appears to be a company focused on developing small satellite technology. Information available suggests they have been involved in the commercial small satellite market. Their selection for a Phase III SBIR contract implies they have successfully completed earlier phases (Phase I and Phase II) of the SBIR program, which are competitive and awarded based on technical merit and potential for commercialization. While the provided data doesn't detail their entire government contract history, the Phase III award indicates a positive track record in securing government R&D funding and transitioning that technology. Further investigation into their specific SBIR awards and any other federal contracts would provide a more comprehensive view of their government contracting experience and performance.

How does this contract align with broader trends in military satellite communications and the defense sector?

This contract aligns with significant trends in military satellite communications, particularly the increasing emphasis on protected, resilient, and anti-jam capabilities. As adversaries develop more sophisticated electronic warfare capabilities, the need for satellite links that can withstand jamming and interference becomes paramount. The focus on tactical applications suggests a move towards more agile and responsive communication systems that can support distributed operations and mobile forces. Furthermore, the use of Phase III SBIR indicates a strategy to leverage innovative technologies developed by smaller, agile companies to meet these evolving defense needs, rather than relying solely on traditional large defense contractors. This reflects a broader DoD effort to foster innovation and adopt cutting-edge technologies more rapidly.

What are the potential implications for the small business ecosystem, given this is a Phase III SBIR transitioning from earlier small business awards?

Phase III SBIR contracts are crucial for the small business innovation ecosystem as they represent the 'finish line' for many innovative technologies developed under the program. This contract signifies that Astranis Space Technologies Corp. (presumably a small business during Phase I/II) has successfully navigated the SBIR process and is now moving towards commercialization or full-scale development, potentially with significant government backing. While this specific award might not be a small business set-aside, the success of the Phase III award validates the SBIR program's goal of bringing small business innovations to market. It can lead to job creation within the company and potentially spur further innovation. However, it also highlights the transition point where successful small businesses may grow, potentially outgrowing small business size standards or partnering with larger entities, which is a natural part of the innovation lifecycle.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Other Professional, Scientific, and Technical Services › All Other Professional, Scientific, and Technical Services

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

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: 575 20TH ST, SAN FRANCISCO, CA, 94107

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $6,918,000

Exercised Options: $6,918,000

Current Obligation: $6,918,000

Contract Characteristics

Multi-Year Contract: Yes

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Timeline