DoD's $10.4M MISR-D Satellite Payload AIT contract awarded to BAE Systems, a sole-source R&D effort

Contract Overview

Contract Amount: $10,423,640 ($10.4M)

Contractor: BAE Systems Space & Mission Systems Inc.

Awarding Agency: Department of Defense

Start Date: 2025-08-01

End Date: 2026-08-31

Contract Duration: 395 days

Daily Burn Rate: $26.4K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: R&D

Official Description: MISR-D SATELLITE-PAYLOAD AIT

Place of Performance

Location: BOULDER, BOULDER County, COLORADO, 80301

State: Colorado Government Spending

Plain-Language Summary

Department of Defense obligated $10.4 million to BAE SYSTEMS SPACE & MISSION SYSTEMS INC. for work described as: MISR-D SATELLITE-PAYLOAD AIT Key points: 1. This contract represents a significant investment in specialized satellite technology for U.S. Special Operations Command. 2. The sole-source nature of the award warrants scrutiny regarding potential price inflation and limited market engagement. 3. Performance risk is moderate, given the complexity of satellite payload integration and testing. 4. The contract duration of approximately 13 months suggests a focused, project-specific objective. 5. This award falls within the Research and Development sector, specifically focusing on physical and engineering sciences. 6. The firm-fixed-price structure aims to transfer cost risk to the contractor, but requires careful baseline management.

Value Assessment

Rating: questionable

Benchmarking the value of this sole-source contract is challenging without comparable sole-source awards for similar satellite payload AIT services. The fixed-price nature provides some cost certainty, but the absence of competition means there's no direct market validation of the $10.4 million price. Further analysis would require understanding the specific technical requirements and the contractor's unique capabilities to justify the price against potential alternatives or internal development costs.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, indicating that only one vendor, BAE Systems Space & Mission Systems Inc., was deemed capable of fulfilling the requirement. The justification for this approach is not detailed here but typically involves proprietary technology, unique capabilities, or urgent needs where competition is not feasible. The lack of competition limits price discovery and may result in a higher cost to the government than if multiple bids were solicited.

Taxpayer Impact: Taxpayers may be paying a premium due to the absence of competitive bidding. Without competing offers, there is less pressure on the contractor to offer the most cost-effective solution, potentially leading to less efficient use of public funds.

Public Impact

The primary beneficiaries are U.S. Special Operations Command, which will receive advanced satellite payload capabilities. The contract will deliver the Assembly, Integration, and Testing (AIT) services for the MISR-D satellite payload. The geographic impact is primarily within the contractor's facilities, likely in Colorado, and the operational deployment of the satellite system. Workforce implications include specialized engineering and technical roles within BAE Systems, contributing to the high-tech aerospace sector.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits price competition, potentially increasing costs for taxpayers.
Lack of transparency in the sole-source justification could obscure potential alternatives.
Complexity of satellite AIT introduces inherent technical and schedule risks.
Reliance on a single contractor for critical space technology raises long-term dependency concerns.

Positive Signals

BAE Systems is an established defense contractor with significant experience in space systems.
Firm-fixed-price contract structure shifts cost overrun risk to the contractor.
Contract supports critical national security missions for U.S. Special Operations Command.
Specialized nature of the payload suggests advanced technological development.

Sector Analysis

The contract falls within the Research and Development (R&D) sector, specifically NAICS code 541715, which covers R&D in the physical, engineering, and life sciences. This segment of the aerospace and defense industry is characterized by high innovation, long development cycles, and significant government investment. Comparable spending in this area often involves complex systems integration and testing for advanced platforms like satellites. The market for specialized satellite payloads is typically dominated by a few large, experienced contractors due to the high barriers to entry.

Small Business Impact

This contract does not appear to involve a small business set-aside, as the awardee is BAE Systems, a large defense contractor. There is no explicit mention of subcontracting plans for small businesses within the provided data. The focus on a specialized, sole-source R&D effort for a satellite payload suggests that the primary work will be performed by the prime contractor, potentially limiting opportunities for small businesses in this specific contract's execution.

Oversight & Accountability

Oversight for this contract will likely be managed by the U.S. Special Operations Command contracting office and potentially the Department of Defense's Inspector General, depending on the scale and nature of any issues that arise. Transparency is limited due to the sole-source award, making public oversight more challenging. Accountability will be driven by contract performance metrics and the terms of the firm-fixed-price agreement.

Related Government Programs

National Reconnaissance Office (NRO) Satellite Programs
Space Force Launch and Satellite Acquisition Programs
Defense Advanced Research Projects Agency (DARPA) Space Technology Initiatives
NASA Earth Science Missions
Intelligence Community Satellite Development

Risk Flags

Sole-source award requires careful justification and oversight.
Potential for cost overruns if scope is not tightly managed under FFP.
Technical complexity of satellite payload AIT presents inherent risks.
Reliance on a single contractor for critical technology.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $10.4 million to BAE SYSTEMS SPACE & MISSION SYSTEMS INC.. MISR-D SATELLITE-PAYLOAD AIT

Who is the contractor on this award?

The obligated recipient is BAE SYSTEMS SPACE & MISSION SYSTEMS INC..

Which agency awarded this contract?

Awarding agency: Department of Defense (U.S. Special Operations Command).

What is the total obligated amount?

The obligated amount is $10.4 million.

What is the period of performance?

Start: 2025-08-01. End: 2026-08-31.

What is the specific technical capability or unique technology that necessitated a sole-source award to BAE Systems for the MISR-D satellite payload AIT?

The provided data does not specify the exact technical capability or unique technology that justified the sole-source award. Typically, sole-source justifications for complex systems like satellite payloads are based on factors such as proprietary designs, unique manufacturing processes, essential integration with existing classified systems, or a demonstrated lack of alternative sources capable of meeting the stringent requirements within the necessary timeframe. A full justification document, often found in contract award notices or agency procurement databases, would be required to detail the specific reasons. Without this, it's presumed that BAE Systems possesses critical intellectual property or specialized facilities essential for the MISR-D payload's Assembly, Integration, and Testing (AIT).

How does the $10.4 million contract value compare to similar satellite payload AIT contracts, particularly those awarded on a sole-source basis?

Direct comparison of this $10.4 million contract value to similar sole-source satellite payload AIT contracts is difficult without access to a comprehensive database of classified or specialized procurements. The cost of satellite payload AIT can vary dramatically based on payload complexity, size, technological sophistication, mission requirements (e.g., orbit, environmental resilience), and the specific integration challenges. Sole-source awards inherently lack a competitive benchmark, making value assessment reliant on internal cost estimates, historical data for the contractor, or comparisons to publicly available, competitively awarded projects which may not be directly analogous. Given the specialized nature of U.S. Special Operations Command requirements, this figure could represent a fair market price for unique capabilities, or it could be inflated due to the lack of competition.

What are the primary risks associated with the firm-fixed-price (FFP) contract type for this satellite payload AIT project?

The primary risks associated with a firm-fixed-price (FFP) contract for a complex project like satellite payload AIT, even when awarded sole-source, revolve around the initial price negotiation and the contractor's ability to manage costs within that fixed price. While FFP shifts cost overrun risk to the contractor, a poorly defined scope or underestimated technical challenges could lead to the contractor seeking change orders, potentially increasing the overall cost. There's also a risk that the contractor might cut corners on quality or testing to maintain profitability if unforeseen issues arise, impacting the payload's reliability. For the government, the risk lies in ensuring the initial price is fair and reflects the true cost and value, which is harder to ascertain without competition.

What is the track record of BAE Systems Space & Mission Systems Inc. in delivering satellite payload AIT services, particularly for defense or special operations applications?

BAE Systems is a major defense contractor with extensive experience in aerospace and defense, including space systems. Their Space & Mission Systems division has a significant track record in designing, building, and integrating various space components and payloads for both commercial and government clients. While specific details on their performance for U.S. Special Operations Command (USSOCOM) related to MISR-D payload AIT are not publicly detailed in this data, the company has been involved in numerous satellite programs, contributing to subsystems, payloads, and ground systems. Their long-standing presence and broad capabilities suggest a substantial capacity to handle complex AIT tasks, though performance on specific, sensitive programs like this often remains classified or proprietary.

How does the $263,890 'br' (likely budget or baseline cost) figure relate to the total contract value of $10.4 million, and what does this imply?

The figure 'br': 263890, when compared to the total contract value 'a': 10423640, represents approximately 2.53% of the total contract amount. Without explicit definition, 'br' could potentially refer to a specific budget line item, a preliminary estimate, or a portion of the total value allocated to a particular phase or component. If it represents a baseline cost or initial budget for a specific segment of the AIT process, its small percentage relative to the total contract value might suggest that the majority of the cost is associated with other phases, materials, specialized equipment, or extensive testing protocols. Alternatively, it could be an anomaly or represent a specific, limited aspect of the overall project budget.

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: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 1600 COMMERCE ST UNIT 1, BOULDER, CO, 80301

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

Financial Breakdown

Contract Ceiling: $13,500,000

Exercised Options: $13,500,000

Current Obligation: $10,423,640

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline