DoD's $59M Space Segment Contract Awarded to Artel LLC Shows Strong Competition

Contract Overview

Contract Amount: $59,088,752 ($59.1M)

Contractor: Artel LLC

Awarding Agency: Department of Defense

Start Date: 2016-09-25

End Date: 2021-09-24

Contract Duration: 1,825 days

Daily Burn Rate: $32.4K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: IGF::OT::IGF SPACE SEGMENT

Place of Performance

Location: HERNDON, FAIRFAX County, VIRGINIA, 20171

State: Virginia Government Spending

Plain-Language Summary

Department of Defense obligated $59.1 million to ARTEL LLC for work described as: IGF::OT::IGF SPACE SEGMENT Key points: 1. Contract value of $59.1 million over five years indicates significant investment in space segment capabilities. 2. Full and open competition suggests a healthy market with multiple potential providers. 3. Fixed-price contract type helps mitigate cost overrun risks for the government. 4. The contract duration of 1825 days aligns with typical long-term defense infrastructure needs. 5. Awarded by the Defense Information Systems Agency (DISA), this contract supports critical defense operations. 6. The North American Industry Classification System (NAICS) code 541511 points to custom computer programming services, highlighting the technical nature of the work.

Value Assessment

Rating: good

The contract's total value of $59.1 million over five years averages to approximately $11.8 million annually. Benchmarking this against similar large-scale IT and space segment contracts within the Department of Defense is challenging without more specific service details. However, the firm fixed-price nature of the award suggests a commitment to cost control. The value appears reasonable for a multi-year, high-stakes defense contract, assuming the scope of work is substantial and technically complex.

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 bids. This suggests a robust competitive environment for space segment services. While the number of bidders is not explicitly stated, the 'full and open' designation implies that multiple companies likely vied for this significant contract, fostering price discovery and potentially leading to more favorable terms for the government.

Taxpayer Impact: Full and open competition generally benefits taxpayers by driving down prices through market forces and ensuring the government receives the best value from a wide pool of qualified contractors.

Public Impact

This contract directly benefits the Department of Defense by enhancing its space segment capabilities, crucial for communication, surveillance, and command and control. The services delivered likely involve the development, integration, or maintenance of critical space-based assets and associated ground systems. The geographic impact is national, supporting defense operations across various theaters, with potential implications for global reach. Workforce implications may include specialized roles in aerospace engineering, software development, cybersecurity, and project management within the contractor's organization and potentially within DISA.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for vendor lock-in if specialized technologies are developed.
Dependence on a single contractor for critical space segment infrastructure.
Risk of scope creep if requirements are not clearly defined and managed.
Cybersecurity vulnerabilities in space and ground systems require continuous monitoring.

Positive Signals

Firm fixed-price contract structure provides cost certainty.
Full and open competition suggests a competitive market and potential for innovation.
Award to a single contractor (Artel LLC) can streamline management and integration.
Long-term contract duration allows for sustained focus and development of expertise.

Sector Analysis

The space segment sector within the defense industry is highly specialized and capital-intensive, involving satellite technology, launch services, and ground control systems. This contract likely falls under the broader IT and aerospace defense markets. Spending in this area is critical for national security, supporting intelligence, reconnaissance, and communication. Comparable spending benchmarks would typically be found in large-scale satellite acquisition programs or complex communication network upgrades, often running into hundreds of millions or billions of dollars.

Small Business Impact

The data indicates this contract was awarded under full and open competition and does not specify any small business set-aside. Therefore, direct benefits to small businesses through this specific award are unlikely unless they are part of a subcontracting plan. The prime contractor, Artel LLC, would need to demonstrate efforts to include small businesses in its supply chain to meet broader socioeconomic goals, but this contract itself is not a direct set-aside.

Oversight & Accountability

Oversight for this contract would primarily fall under the Defense Information Systems Agency (DISA) contracting officers and program managers. The Department of Defense's Inspector General (IG) would have jurisdiction to investigate any potential fraud, waste, or abuse. Transparency is facilitated through contract award databases, but detailed performance metrics and specific oversight activities are typically internal to the agency and contractor.

Related Government Programs

DoD Satellite Communications
Defense Information Systems Network (DISN)
Military Satellite Communications (MILSATCOM)
Space-Based Infrared System (SBIRS)
National Reconnaissance Office (NRO) Programs

Risk Flags

Potential for cost overruns if scope is not well-defined.
Risk of technical obsolescence in rapidly evolving space technology.
Cybersecurity threats to space and ground systems.
Dependence on a single contractor for critical capabilities.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $59.1 million to ARTEL LLC. IGF::OT::IGF 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 $59.1 million.

What is the period of performance?

Start: 2016-09-25. End: 2021-09-24.

What is Artel LLC's track record with similar large-scale defense contracts, particularly in space segment development?

Artel LLC has a significant history of supporting U.S. military and government communications infrastructure, including extensive work on satellite communications and network services. They have held numerous contracts with agencies like DISA, the U.S. Air Force, and other branches of the DoD. Their experience often involves providing secure, high-bandwidth communication solutions, which aligns with the needs of a space segment contract. While specific details on past space segment development projects are proprietary, their established presence in defense communications suggests a relevant capability base. Evaluating their performance on previous large contracts, including any past issues or commendations, would provide further insight into their reliability and expertise for this current award.

How does the $59.1 million contract value compare to other recent DoD space segment procurements?

The $59.1 million contract value for Artel LLC's space segment work is a substantial but not extraordinary figure within the context of large DoD procurements. Major satellite acquisition programs or the development of new space-based command and control systems can easily run into hundreds of millions or even billions of dollars. However, this contract, awarded as a delivery order under a larger vehicle (implied by 'AW': DELIVERY ORDER), might represent a specific component or service within a broader space segment initiative. Compared to contracts for individual satellite builds or constellation development, $59.1 million is moderate. It is more comparable to contracts for specific system upgrades, integration services, or sustainment of existing space assets over a defined period.

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

While firm fixed-price (FFP) contracts are generally favored for cost control, they can introduce risks, particularly in complex, long-term projects like space segment development. The primary risk is that the contractor, Artel LLC, might face unforeseen technical challenges or cost increases that are not adequately accounted for in the fixed price. If the scope of work is not meticulously defined, Artel could be incentivized to cut corners on quality or performance to maintain profitability, potentially impacting the reliability and longevity of the space segment. Conversely, if the government requires significant changes or additions to the scope, contract modifications could lead to price increases, negating some of the FFP benefits. Ensuring robust technical oversight and clear performance standards is crucial to mitigate these risks.

What does the 'Custom Computer Programming Services' NAICS code imply about the nature of this contract?

The NAICS code 541511, 'Custom Computer Programming Services,' indicates that a significant portion of the work under this contract involves designing, developing, and implementing specialized software solutions tailored to the government's unique requirements for the space segment. This could include software for satellite operations, data processing, command and control systems, mission planning, or secure communications interfaces. It suggests that the contract is not solely focused on hardware procurement or basic IT support, but rather on the intricate software engineering necessary to make space-based assets functional and effective for defense purposes. This implies a need for highly skilled software developers, systems integrators, and cybersecurity experts within Artel LLC's team.

How does the contract's duration (1825 days) align with the lifecycle of space segment assets?

A contract duration of 1825 days, equivalent to exactly five years, is a common and practical timeframe for many defense contracts, including those related to the space segment. This duration allows for sustained development, integration, testing, and initial operational support of specific systems or services. Space assets themselves often have lifecycles measured in years or decades, but contracts for their development, enhancement, or sustainment are typically awarded for shorter, manageable periods. A five-year term provides stability for the contractor to invest resources and build expertise, while also allowing the government periodic opportunities to reassess needs, performance, and market conditions before committing to further long-term investments or recompeting the requirement.

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

Parent Company: Artel, LLC

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: $59,088,752

Exercised Options: $59,088,752

Current Obligation: $59,088,752

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Parent Contract

Parent Award PIID: GS35F5151H

IDV Type: FSS

Timeline