DoD awards $39.7M for satellite communications, raising questions about competition and value
Contract Overview
Contract Amount: $39,663,101 ($39.7M)
Contractor: Viasat Inc
Awarding Agency: Department of Defense
Start Date: 2020-09-10
End Date: 2026-03-09
Contract Duration: 2,006 days
Daily Burn Rate: $19.8K/day
Competition Type: NOT COMPETED
Number of Offers Received: 1
Pricing Type: FIRM FIXED PRICE
Sector: IT
Official Description: NAVAL SENIOR LEADERSHIP COMMUNICATION - AIRCRAFT (NSLC-A) SATELLITE COMMUNICATIONS SERVICES
Place of Performance
Location: CARLSBAD, SAN DIEGO County, CALIFORNIA, 92009
Plain-Language Summary
Department of Defense obligated $39.7 million to VIASAT INC for work described as: NAVAL SENIOR LEADERSHIP COMMUNICATION - AIRCRAFT (NSLC-A) SATELLITE COMMUNICATIONS SERVICES Key points: 1. Contract awarded on a sole-source basis, limiting price discovery and potentially increasing costs. 2. The contract duration is extensive, spanning over six years, which may not align with evolving technological needs. 3. Lack of competition suggests potential risks related to contractor performance and innovation. 4. The fixed-price contract type offers some cost certainty but may not fully capture efficiencies from competitive bidding. 5. Analysis of per-unit costs is crucial to benchmark value against similar satellite communication services. 6. The award to a single vendor warrants scrutiny regarding the justification for not pursuing a competitive process.
Value Assessment
Rating: questionable
The total award of $39.7 million over six years for satellite communications services requires careful benchmarking. Without competitive bids, it is difficult to ascertain if this price represents fair market value. Comparing the per-user or per-gigabyte costs to industry averages for similar government or commercial satellite services would be essential. The lack of competition inherently introduces a risk that the price may be higher than what could have been achieved through a more open bidding process. Further analysis of the specific services and bandwidth provided is needed to make a more definitive value assessment.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was awarded on a sole-source basis, meaning it was not competed. The justification for this approach is not detailed in the provided data. Typically, sole-source awards occur when only one vendor can provide the required service or product, or in cases of urgent need. The absence of competition means that multiple potential vendors were not given the opportunity to bid, which can limit price discovery and potentially lead to higher costs for the government. The lack of a competitive process here suggests that the Department of Defense may have relied on a specific capability or existing relationship with Viasat Inc.
Taxpayer Impact: Taxpayers may be paying a premium due to the absence of competitive pressure. Without multiple bids, there is less incentive for the contractor to offer the lowest possible price, potentially leading to less efficient use of public funds.
Public Impact
Senior leadership within the Department of Defense will benefit from reliable and secure satellite communication services. The contract ensures the provision of satellite telecommunications, critical for command and control operations. Services are likely to support military operations across various geographic locations where traditional communication infrastructure may be unavailable or unreliable. The contract supports the technology sector by engaging a specialized satellite communications provider.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award limits competitive pricing and value assessment.
- Extended contract duration may not keep pace with technological advancements.
- Lack of transparency in the sole-source justification raises concerns.
- Potential for higher costs due to absence of competitive bidding.
Positive Signals
- Ensures critical communication capabilities for senior leadership.
- Fixed-price contract offers some cost predictability.
- Long-term contract provides stability for service provision.
Sector Analysis
The satellite telecommunications sector is a critical component of modern defense and communication infrastructure. This contract falls within the broader Information Technology and Communications sector, specifically focusing on satellite-based services. The market is characterized by high barriers to entry due to significant capital investment in satellite technology and ground infrastructure. Major players often have established relationships with government entities. Benchmarking this contract's value would involve comparing its terms and pricing against other government contracts for similar satellite communication services, as well as commercial rates, though government contracts often have unique security and reliability requirements.
Small Business Impact
The provided data indicates that this contract was not set aside for small businesses (ss: false, sb: false). Therefore, there are no direct subcontracting implications for small businesses stemming from a small business set-aside. The primary contractor, Viasat Inc., is a large business. While not a direct set-aside, large sole-source contracts can sometimes indirectly impact small businesses if the prime contractor chooses to subcontract portions of the work to them. However, without specific subcontracting plans or data, the direct impact on the small business ecosystem is unclear.
Oversight & Accountability
Oversight for this contract would typically fall under the Department of Defense's contracting and financial management regulations. The Defense Contract Management Agency (DCMA) often plays a role in overseeing contract performance. Transparency regarding the justification for the sole-source award and detailed performance metrics would be key to assessing accountability. The Inspector General's office within the Department of Defense would have jurisdiction to investigate any potential fraud, waste, or abuse related to this contract.
Related Government Programs
- Defense Information Systems Agency (DISA) contracts
- Satellite Communications Services
- Department of Defense IT Procurement
- Command and Control Systems
- Secure Communication Networks
Risk Flags
- Sole-source award without clear justification.
- Potential for inflated pricing due to lack of competition.
- Extended contract duration may lead to technological obsolescence.
- Limited transparency on performance metrics and oversight.
Tags
it, defense, department-of-defense, satellite-telecommunications, definitive-contract, sole-source, firm-fixed-price, disa, california, large-contract, communications-services, national-security
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $39.7 million to VIASAT INC. NAVAL SENIOR LEADERSHIP COMMUNICATION - AIRCRAFT (NSLC-A) SATELLITE COMMUNICATIONS SERVICES
Who is the contractor on this award?
The obligated recipient is VIASAT INC.
Which agency awarded this contract?
Awarding agency: Department of Defense (Defense Information Systems Agency).
What is the total obligated amount?
The obligated amount is $39.7 million.
What is the period of performance?
Start: 2020-09-10. End: 2026-03-09.
What is the specific justification provided by the Department of Defense for awarding this satellite communication contract on a sole-source basis to Viasat Inc.?
The provided data does not include the specific justification for the sole-source award. Typically, sole-source contracts are awarded when a competitive bidding process is not feasible or advantageous. Reasons can include the existence of only one responsible source capable of providing the required service, urgent and compelling circumstances that preclude competition, or when a follow-on contract is awarded to the original source under specific conditions. Without the official justification document, it is impossible to definitively state why this contract was not competed. Further inquiry with the Department of Defense or the Defense Information Systems Agency would be necessary to obtain this critical information and assess its validity.
How does the per-unit cost or bandwidth pricing of this contract compare to other similar satellite communication contracts awarded by the DoD or other federal agencies?
Direct comparison of per-unit costs or bandwidth pricing is challenging without detailed service specifications and market rate data for comparable contracts. The provided data does not include granular pricing details such as cost per gigabyte, cost per user, or specific bandwidth allocations. To perform a meaningful comparison, one would need to access databases of federal contract awards and filter for similar satellite communication services, noting the specific technical requirements, service level agreements, and contract types. Benchmarking against commercial satellite service providers would also be valuable, though government contracts often include additional security, reliability, and support requirements that can influence pricing. The absence of competitive bidding in this sole-source award makes external benchmarking even more critical for assessing value for money.
What are the key performance indicators (KPIs) and service level agreements (SLAs) associated with this contract, and how is Viasat Inc.'s performance being monitored?
The provided data does not specify the key performance indicators (KPIs) or service level agreements (SLAs) for this contract. However, for satellite communication services critical to senior leadership, one would expect KPIs to include uptime/availability (e.g., 99.99%), latency, data throughput, and response times for technical support. SLAs would define the remedies or penalties if these KPIs are not met. Monitoring of Viasat Inc.'s performance would typically be conducted by the contracting officer's representative (COR) or a designated technical point of contact within the Department of Defense or the Defense Information Systems Agency. Regular performance reviews, service reports from the contractor, and potentially independent testing would be part of the oversight process to ensure the services meet the required standards.
Given the six-year duration of the contract, what provisions are in place to address potential technological obsolescence or changes in communication needs?
Contracts with extended durations, such as this six-year agreement, often include clauses to address technological changes and evolving needs. These might include options for service upgrades, modifications to bandwidth or capabilities, or periodic reviews of the technology landscape. The fixed-price nature of the contract could limit flexibility for incorporating new technologies without formal contract modifications, which may involve additional costs or re-negotiation. It is also possible that the contract includes provisions for termination for convenience, allowing the government to exit the contract if needs change significantly or if more advanced technologies become available and cost-effective. The specific contract language would detail these provisions.
What is Viasat Inc.'s track record with the Department of Defense, particularly concerning satellite communication services, and have there been any past performance issues?
Viasat Inc. is a well-established provider of satellite communication services and has a significant history of contracting with the U.S. government, including the Department of Defense. While specific details of past performance on this particular contract or related services are not provided in the data, Viasat generally has a strong presence in the defense sector, supplying various communication solutions. To assess their track record thoroughly, one would need to review past performance evaluations (e.g., Contractor Performance Assessment Reporting System - CPARS), any documented disputes, contract terminations, or significant issues related to previous DoD contracts. Generally, agencies consider past performance as a key factor in award decisions, though this is less applicable in a sole-source context where competition is bypassed.
Industry Classification
NAICS: Information › Satellite Telecommunications › Satellite Telecommunications
Product/Service Code: IT AND TELECOM - INFORMATION TECHNOLOGY AND TELECOMMUNICATIONS › ADP AND TELECOMMUNICATIONS
Competition & Pricing
Extent Competed: NOT COMPETED
Solicitation Procedures: ONLY ONE SOURCE
Solicitation ID: HC101320R0010
Offers Received: 1
Pricing Type: FIRM FIXED PRICE (J)
Evaluated Preference: NONE
Contractor Details
Address: 6155 EL CAMINO REAL, CARLSBAD, CA, 92009
Business Categories: Category Business, Corporate Entity Not Tax Exempt, Manufacturer of Goods, Not Designated a Small Business, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $42,233,114
Exercised Options: $39,663,101
Current Obligation: $39,663,101
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES
Cost or Pricing Data: NO
Timeline
Start Date: 2020-09-10
Current End Date: 2026-03-09
Potential End Date: 2026-03-09 00:00:00
Last Modified: 2025-12-16
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