DoD's $34.7M KU-Band Space Segment contract awarded to ARTEL LLC shows fair value with 1 bid

Contract Overview

Contract Amount: $34,689,074 ($34.7M)

Contractor: Artel LLC

Awarding Agency: Department of Defense

Start Date: 2014-02-16

End Date: 2018-02-15

Contract Duration: 1,460 days

Daily Burn Rate: $23.8K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: IGF::OT::IGF KU-BAND SPACE SEGMENT

Place of Performance

Location: RESTON, FAIRFAX County, VIRGINIA, 20191

State: Virginia Government Spending

Plain-Language Summary

Department of Defense obligated $34.7 million to ARTEL LLC for work described as: IGF::OT::IGF KU-BAND SPACE SEGMENT Key points: 1. Contract awarded via full and open competition, suggesting a competitive pricing environment. 2. The contract's duration of 4 years indicates a medium-term commitment for space segment services. 3. ARTEL LLC, the sole awardee, suggests potential concentration risk or specialized capability. 4. The fixed-price contract type helps mitigate cost overrun risks for the government. 5. This contract falls under IT services, specifically custom computer programming, aligning with defense modernization efforts. 6. The contract was awarded as a delivery order, implying it's part of a larger indefinite-delivery contract vehicle.

Value Assessment

Rating: fair

The contract's total value of $34.7 million over four years averages to approximately $8.67 million annually. Benchmarking this against similar KU-band space segment contracts is challenging without more specific service details. However, the single bid suggests that either the market is limited for these specific services or ARTEL LLC possesses a unique capability. The firm-fixed-price structure provides cost certainty, but the lack of competitive bids prevents a robust assessment of optimal value for money.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under 'full and open competition,' indicating that all responsible sources were permitted to submit offers. Despite this, only one bid was received. This could imply that the specific requirements of the KU-band space segment are highly specialized, or that potential competitors chose not to bid due to market conditions or perceived barriers. The single bid limits the ability to definitively assess price competitiveness through direct comparison of multiple offers.

Taxpayer Impact: While the competition was open, the single bid means taxpayers did not benefit from the price discovery that typically occurs with multiple competing offers. This could potentially lead to a higher price than if multiple companies had vied for the contract.

Public Impact

This contract directly supports the Department of Defense's communication and operational needs through KU-band space segment services. It ensures the availability of critical satellite communication infrastructure for military operations. The services provided likely enhance command and control capabilities and data transmission for defense personnel. The geographic impact is global, given the nature of space-based communication systems supporting deployed forces.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Limited competition (one bid) raises concerns about potential lack of price optimization.
Reliance on a single contractor for critical space segment services could pose a risk if the contractor faces performance issues or financial instability.

Positive Signals

Awarded under full and open competition, adhering to procurement best practices.
Firm-fixed-price contract type provides cost certainty and limits government financial risk.
The contract is for a defined period, allowing for periodic re-evaluation of market needs and contractor performance.

Sector Analysis

The KU-band space segment market is a niche within the broader telecommunications and satellite services industry. It is characterized by high barriers to entry due to significant capital investment, regulatory hurdles, and specialized technical expertise. This contract likely represents a portion of the Department of Defense's overall spending on secure and reliable satellite communications, which are crucial for global operations. Comparable spending benchmarks would depend on the specific bandwidth, data rates, and service level agreements required.

Small Business Impact

There is no indication that this contract included small business set-asides, nor is there information suggesting subcontracting opportunities for small businesses. The nature of specialized space segment services often favors larger, established prime contractors with extensive technical capabilities and infrastructure.

Oversight & Accountability

The contract is managed by the Defense Information Systems Agency (DISA), which has established oversight mechanisms for IT procurements. As a delivery order under a larger contract vehicle, it likely falls under the existing oversight framework of that vehicle. Transparency is generally maintained through contract award databases, though specific performance metrics and detailed oversight activities are typically internal to the agency.

Related Government Programs

Defense Information Systems Agency (DISA) Contracts
Satellite Communications Services
Department of Defense IT Spending
KU-Band Satellite Services

Risk Flags

Single Bidder
Potential Lack of Competition
Critical Infrastructure Reliance

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $34.7 million to ARTEL LLC. IGF::OT::IGF KU-BAND SPACE SEGMENT

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 $34.7 million.

What is the period of performance?

Start: 2014-02-16. End: 2018-02-15.

What is ARTEL LLC's track record with similar government contracts, particularly in space segment services?

ARTEL LLC has a history of providing telecommunications and satellite services to the U.S. government, including the Department of Defense. Their experience often involves providing secure and reliable connectivity solutions, which aligns with the requirements for KU-band space segment services. While specific details on past performance for this exact type of service would require deeper investigation into contract databases and performance reports, ARTEL has been a recognized provider in the government telecommunications space. Their ability to secure this contract suggests they met the technical and performance requirements set forth by the Defense Information Systems Agency (DISA). Further analysis would involve reviewing past performance evaluations and any debriefings from competitors if available.

How does the pricing of this contract compare to other KU-band space segment contracts awarded by the DoD or other federal agencies?

Directly comparing the pricing of this $34.7 million contract to other KU-band space segment contracts is difficult without detailed service specifications, such as bandwidth, data rates, service level agreements (SLAs), and geographic coverage. However, the fact that this contract was awarded under full and open competition with only one bid suggests that a robust market price comparison might not be readily available. Typically, a higher number of bids allows for better price discovery. If this contract represents a standard service offering, the annual cost of approximately $8.67 million would need to be benchmarked against industry standards for similar commercial or government satellite services. Without more granular data on the service components, a definitive value-for-money assessment based on price is limited.

What are the primary risks associated with awarding a contract for critical space segment services to a single bidder?

The primary risks associated with awarding a contract for critical space segment services to a single bidder include potential lack of competitive pricing, reduced incentive for innovation, and increased vulnerability to contractor performance issues or financial instability. With only one bidder, the government may not be achieving the most cost-effective solution, as the competitive pressure to offer lower prices is diminished. Furthermore, the sole contractor might have less incentive to proactively innovate or improve services if they perceive no immediate threat from competitors. If ARTEL LLC were to experience significant operational disruptions, financial difficulties, or a decline in service quality, the government would have limited alternative options for immediate replacement, potentially impacting critical defense communications.

What is the expected effectiveness of the KU-band space segment services provided under this contract for supporting DoD operations?

The expected effectiveness of the KU-band space segment services under this contract is high, given its direct award to the Department of Defense (DoD) and its focus on a critical communication infrastructure component. KU-band frequencies are widely used for satellite communications due to their balance of bandwidth availability and antenna size requirements, making them suitable for reliable data transmission and command/control operations. The contract's duration of four years suggests a commitment to ensuring sustained operational capability. The effectiveness will ultimately depend on the specific service level agreements (SLAs) met by ARTEL LLC, including uptime, latency, and data throughput, which are crucial for supporting dynamic military operations globally. The firm-fixed-price nature also implies a focus on delivering defined services reliably.

How has historical spending on KU-band space segment services by the DoD evolved, and does this contract represent a significant shift?

Historical spending on KU-band space segment services by the DoD has likely been substantial and consistent, reflecting the enduring need for robust satellite communications. The evolution of this spending is influenced by technological advancements (e.g., higher throughput satellites, more efficient ground systems), changing geopolitical landscapes requiring enhanced global reach, and the increasing reliance on networked warfare. This specific $34.7 million contract, awarded in 2014 for a four-year period, represents a typical investment for acquiring dedicated or shared KU-band capacity. It does not necessarily indicate a significant shift but rather a continuation of established procurement patterns for essential communication infrastructure. Analyzing trends would require examining spending over longer periods and across different contract vehicles and service providers.

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: $43,366,766

Exercised Options: $34,689,074

Current Obligation: $34,689,074

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Parent Contract

Parent Award PIID: GS35F5151H

IDV Type: FSS

Timeline