DoD's $173M contract for 576 MHZ KU-BAND services awarded to ARTEL LLC shows strong competition and fair pricing

Contract Overview

Contract Amount: $173,409,377 ($173.4M)

Contractor: Artel LLC

Awarding Agency: Department of Defense

Start Date: 2011-02-11

End Date: 2015-02-12

Contract Duration: 1,462 days

Daily Burn Rate: $118.6K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: 576 MHZ KU-BAND

Place of Performance

Location: FALLS CHURCH, FAIRFAX County, VIRGINIA, 22041

State: Virginia Government Spending

Plain-Language Summary

Department of Defense obligated $173.4 million to ARTEL LLC for work described as: 576 MHZ KU-BAND Key points: 1. Value for money appears strong given the firm-fixed-price structure and competitive award. 2. The contract was awarded under full and open competition, indicating a robust bidding process. 3. Risk indicators are low due to the fixed-price nature and established contractor. 4. Performance context is within custom computer programming services, a common IT sector need. 5. This contract fits within the broader Defense Information Systems Agency's IT infrastructure spending. 6. The duration of the contract (over 3 years) suggests a stable, long-term requirement.

Value Assessment

Rating: good

The contract's firm-fixed-price structure suggests a commitment to cost control. While specific performance metrics are not detailed here, the competitive award process implies that the pricing was deemed fair by multiple bidders. Benchmarking against similar KU-BAND service contracts would provide further insight, but the initial award under full and open competition is a positive sign for value.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, meaning all responsible sources were permitted to submit a bid. The presence of multiple bidders, implied by the competitive award, typically leads to better price discovery and ensures the government receives competitive pricing. The specific number of bidders is not provided, but the designation indicates a healthy market.

Taxpayer Impact: Taxpayers benefit from the competitive nature of this award, as it likely drove down costs compared to a sole-source or limited competition scenario.

Public Impact

The Department of Defense benefits from reliable KU-BAND communication services essential for its operations. This contract supports critical defense information systems, ensuring communication capabilities for military personnel. The geographic impact is likely nationwide or global, supporting deployed forces and command centers. Workforce implications may include specialized technical roles within ARTEL LLC and potentially supporting industries.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of specific performance metrics makes it difficult to fully assess ongoing value.
Potential for cost overruns if scope creep occurs, despite fixed-price structure.
Dependence on a single contractor for a critical service could pose a risk if issues arise.

Positive Signals

Awarded under full and open competition, suggesting competitive pricing.
Firm-fixed-price contract type helps control costs.
Contract awarded to a single entity (ARTEL LLC) implies a focused and potentially efficient delivery model.
Long contract duration suggests stability and a well-defined requirement.

Sector Analysis

This contract falls within the Information Technology sector, specifically focusing on telecommunications services. The market for satellite communication services, such as KU-BAND, is a specialized segment within the broader IT and defense industries. Spending in this area is critical for government agencies requiring secure and reliable data transmission, especially for remote or mobile operations. Comparable spending benchmarks would involve analyzing other government contracts for similar satellite bandwidth and communication support services.

Small Business Impact

The data indicates this contract was not set aside for small businesses (ss: false, sb: false). Therefore, the primary contractor, ARTEL LLC, is likely a large business. There is no explicit information on subcontracting plans for small businesses within this data, which could be a missed opportunity for small business participation. Further investigation into subcontracting reports would be needed to assess the impact on the small business ecosystem.

Oversight & Accountability

Oversight for this contract would typically fall under the purview of the Defense Information Systems Agency (DISA) and potentially the Department of Defense's Inspector General. The firm-fixed-price contract type provides a degree of accountability by linking payment to delivery of specified services. Transparency is generally maintained through contract award databases, though detailed performance reviews are often internal.

Related Government Programs

Defense Communications Services
Satellite Communications Contracts
IT Infrastructure Support
Custom Computer Programming Services
DoD Network Modernization

Risk Flags

Potential for vendor lock-in due to specialized service
Reliance on satellite technology can be subject to atmospheric interference
Cybersecurity risks inherent in networked communication systems

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $173.4 million to ARTEL LLC. 576 MHZ KU-BAND

Who is the contractor on this award?

The obligated recipient is ARTEL LLC.

Which agency awarded this contract?

Awarding agency: Department of Defense (Defense Information Systems Agency).

What is the total obligated amount?

The obligated amount is $173.4 million.

What is the period of performance?

Start: 2011-02-11. End: 2015-02-12.

What is ARTEL LLC's track record with similar government contracts, particularly in satellite communications?

ARTEL LLC has a significant history of performing telecommunications and IT services for the U.S. government, including extensive work with the Department of Defense. Their portfolio often includes satellite communications, network engineering, and managed IT services. Prior contracts with agencies like DISA and other military branches demonstrate experience in delivering complex communication solutions. While this specific $173 million contract is substantial, ARTEL's broader experience suggests a capacity to handle such requirements. A deeper dive into past performance reviews and any contract disputes or awards would offer more granular insight into their reliability and quality of service for similar KU-BAND services.

How does the $173 million value compare to other similar KU-BAND service contracts awarded by the DoD or other federal agencies?

The $173 million value for 576 MHZ KU-BAND services over approximately four years (February 2011 to February 2015) appears to be within a reasonable range for large-scale, long-term government telecommunications contracts. However, direct comparisons are challenging without knowing the exact service level agreements, geographic coverage, bandwidth guarantees, and specific technical requirements. Contracts for similar bandwidths and durations can vary significantly based on these factors. For instance, contracts supporting tactical, mobile units might command higher per-MHz costs due to the complexity and urgency compared to fixed-site installations. Benchmarking against other DISA or military service contracts for dedicated satellite bandwidth would be the most relevant comparison.

What are the primary risks associated with this firm-fixed-price contract for KU-BAND services?

While firm-fixed-price contracts are generally favored for cost control, risks can still emerge. A primary risk is the potential for ARTEL LLC to underperform if the fixed price does not adequately cover the actual costs of delivering the service, potentially leading to quality compromises or disputes. Conversely, if the initial cost estimation was too high, the government might be overpaying relative to the market. Scope creep, where the government requests additional services beyond the original contract scope without a formal modification and price adjustment, can also strain the fixed-price agreement. Furthermore, reliance on a single provider for critical communication bandwidth introduces a supply chain risk; any disruption to ARTEL's operations or their satellite partners could impact DoD communications.

How effective has ARTEL LLC been in delivering custom computer programming services and related IT solutions for the government?

ARTEL LLC's effectiveness in delivering custom computer programming and related IT solutions is generally viewed positively, evidenced by their sustained presence and numerous contract awards within the federal sector, particularly with the DoD. Their longevity suggests a consistent ability to meet client needs and adapt to evolving technological requirements. Specific performance metrics for this particular KU-BAND contract are not publicly detailed, but the renewal or continuation of such significant contracts often implies satisfactory performance. Analyzing past performance evaluations, user feedback, and any documented successes or failures in similar projects would provide a more definitive assessment of their effectiveness.

What were the historical spending patterns for KU-BAND services by the Defense Information Systems Agency prior to and during this contract period?

Historical spending patterns for KU-BAND services by DISA prior to and during the 2011-2015 period would likely show a consistent and significant investment in satellite communications. DISA is responsible for providing global information and communication services to the DoD, making satellite bandwidth a critical component. Spending would have been influenced by factors such as the increasing demand for data, the need for secure communications, and the deployment of forces in regions with limited terrestrial infrastructure. The $173 million awarded to ARTEL LLC represents a substantial portion of DISA's satellite communications budget for that timeframe, indicating the importance of this specific service. Analyzing DISA's budget justifications and contract databases from those years would reveal trends in bandwidth acquisition, provider choices, and overall expenditure on satellite services.

What is the strategic importance of 576 MHZ of KU-BAND spectrum for the Department of Defense?

The 576 MHz of KU-BAND spectrum allocated under this contract is strategically vital for the Department of Defense, enabling critical command, control, communications, computers, and intelligence (C4I) functions. KU-BAND frequencies offer a balance of bandwidth capacity and relatively smaller antenna sizes, making them suitable for both fixed and mobile platforms, including ships, aircraft, and ground vehicles. This spectrum supports a wide range of applications, such as high-bandwidth data transmission for intelligence, surveillance, and reconnaissance (ISR) platforms, secure voice communications, and network connectivity for deployed forces in remote or austere environments where terrestrial infrastructure is unavailable or unreliable. Ensuring access to and efficient utilization of this spectrum is paramount for maintaining operational readiness and information superiority.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Computer Systems Design and Related Services › Custom Computer Programming Services

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

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 13665 DULLES TECHNOLOGY DR STE 300, HERNDON, VA, 20171

Business Categories: Category Business, Not Designated a Small Business, Special Designations, Subchapter S Corporation, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $173,409,377

Exercised Options: $173,409,377

Current Obligation: $173,409,377

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: GS35F5151H

IDV Type: FSS

Timeline