NAVAIR awards $22.8M contract for satellite telecommunications services to Viasat Inc

Contract Overview

Contract Amount: $22,873,632 ($22.9M)

Contractor: Viasat Inc

Awarding Agency: Department of Defense

Start Date: 2020-10-01

End Date: 2025-03-31

Contract Duration: 1,642 days

Daily Burn Rate: $13.9K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: NAVAL AIR SYSTEMS COMMAND (NAVAIR) EP-3 MODEL AIRCRAFT KU-BAND SPREAD SPECTRUM (KUSS) SERVICES

Place of Performance

Location: CARLSBAD, SAN DIEGO County, CALIFORNIA, 92009

State: California Government Spending

Plain-Language Summary

Department of Defense obligated $22.9 million to VIASAT INC for work described as: NAVAL AIR SYSTEMS COMMAND (NAVAIR) EP-3 MODEL AIRCRAFT KU-BAND SPREAD SPECTRUM (KUSS) SERVICES Key points: 1. Contract awarded on a sole-source basis, raising questions about potential cost efficiencies. 2. The contract duration of over four years suggests a long-term need for these services. 3. The fixed-price contract type aims to provide cost certainty for the government. 4. This contract supports critical intelligence, surveillance, and reconnaissance (ISR) capabilities. 5. The specific service category, Satellite Telecommunications, is vital for modern military operations. 6. The award to Viasat Inc. indicates a reliance on established providers for specialized services.

Value Assessment

Rating: fair

The contract value of $22.8 million over approximately 4.5 years averages to about $5 million annually. Benchmarking this against similar satellite telecommunications contracts is challenging without more specific service details. However, given the specialized nature of military-grade satellite communications, the pricing may be within a reasonable range for the capabilities provided. Further analysis would require comparing Viasat's per-unit costs for similar services to other government contracts or commercial offerings.

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 among multiple vendors. This approach is typically used when only one vendor possesses the necessary capabilities, technology, or when urgency dictates. The lack of competition means that price discovery through market forces was limited, potentially leading to higher costs than if multiple bids were solicited.

Taxpayer Impact: Sole-source awards can result in taxpayers paying a premium as there is no competitive pressure to drive down prices. It also limits opportunities for other businesses to compete for government contracts.

Public Impact

The primary beneficiaries are the Naval Air Systems Command (NAVAIR) and its operational units, which receive essential satellite communication services. The services delivered are critical for intelligence, surveillance, and reconnaissance (ISR) missions, enabling real-time data transmission. The geographic impact is likely global, supporting naval operations wherever deployed. The contract supports Viasat Inc.'s workforce and contributes to the specialized telecommunications sector.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competitive pricing and potentially increases costs for taxpayers.
Lack of transparency in the procurement process due to non-competitive nature.
Potential for vendor lock-in if alternative solutions are not explored.
Dependence on a single provider for critical communication infrastructure.

Positive Signals

Firm Fixed Price contract provides cost certainty for the government.
Long-term contract (over 4 years) indicates a stable and ongoing requirement.
Award to a known entity (Viasat Inc.) suggests a level of trust and established performance.
Supports critical defense information and communication needs.

Sector Analysis

The satellite telecommunications sector is a critical component of modern defense infrastructure, enabling global connectivity for command, control, intelligence, and surveillance. This contract falls within a niche market focused on providing specialized, high-bandwidth, and secure communication solutions for military platforms. The market is characterized by a few key players capable of meeting stringent government requirements, often involving proprietary technology and significant infrastructure investment. Spending in this area is substantial across various defense agencies due to the indispensable nature of satellite communications for operations in remote or contested environments.

Small Business Impact

This contract does not appear to have a small business set-aside component, as indicated by 'sb': false. Furthermore, the prime contractor, Viasat Inc., is a large business. There is no explicit information provided regarding subcontracting plans for small businesses. This suggests that the primary focus of this award was on securing specialized satellite telecommunications services from a capable provider, rather than specifically fostering small business participation.

Oversight & Accountability

Oversight for this contract would primarily fall under the Naval Air Systems Command (NAVAIR) and potentially the Defense Contract Management Agency (DCMA). As a definitive contract, it is subject to standard government oversight for performance, invoicing, and compliance. Transparency is limited due to the sole-source nature of the award. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

Naval Air Systems Command (NAVAIR) Contracts
Satellite Communications Services
Department of Defense Information Technology Contracts
Intelligence, Surveillance, and Reconnaissance (ISR) Support
Defense Information Systems Agency (DISA) Services

Risk Flags

Sole-source award
Lack of competition
Potential for cost overruns
Limited transparency in procurement

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $22.9 million to VIASAT INC. NAVAL AIR SYSTEMS COMMAND (NAVAIR) EP-3 MODEL AIRCRAFT KU-BAND SPREAD SPECTRUM (KUSS) 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 $22.9 million.

What is the period of performance?

Start: 2020-10-01. End: 2025-03-31.

What is the specific nature of the KU-band spread spectrum services being provided, and how do they differ from standard satellite communications?

KU-band spread spectrum (KUSS) services utilize the KU frequency band (typically 12-18 GHz) for satellite communication. Spread spectrum is a technique that spreads the signal's energy over a wider frequency range than the minimum required for the information being transmitted. This offers several advantages, including increased resistance to jamming and interference, enhanced security through lower probability of intercept, and improved signal quality in challenging environments. For military applications like the EP-3 aircraft, these characteristics are crucial for maintaining reliable and secure command and control, as well as transmitting sensitive intelligence data, especially in contested or electronic warfare environments where adversaries might attempt to disrupt communications.

What is Viasat Inc.'s track record with NAVAIR and similar defense contracts?

Viasat Inc. is a well-established global communications company with a significant history of providing satellite broadband services and secure networking systems to government and defense clients worldwide. They have a substantial portfolio of contracts with various branches of the U.S. military, including the Navy, Air Force, and Army, for a range of applications such as high-capacity satellite links, secure mobile communication terminals, and airborne networking solutions. Their involvement with NAVAIR specifically likely includes providing robust communication capabilities for naval aviation platforms, similar to the EP-3 aircraft mentioned. Viasat is known for its high-throughput satellite (HTS) capabilities and secure communication technologies, making them a frequent choice for demanding defense requirements.

How does the $22.8 million contract value compare to historical spending on EP-3 aircraft communication systems?

Direct historical spending comparisons for the EP-3 aircraft's KU-band spread spectrum services are not readily available in the provided data. However, the $22.8 million awarded to Viasat Inc. over approximately 4.5 years (from October 2020 to March 2025) represents an average annual expenditure of roughly $5 million for these specialized telecommunications. This figure should be considered in the context of the overall operating and sustainment costs of specialized intelligence-gathering aircraft like the EP-3. Given the advanced technology and critical mission role of these platforms, annual spending in the low single-digit millions for essential communication systems is plausible, though a precise historical benchmark would require deeper access to NAVAIR's budget and procurement history for this specific aircraft model and its systems.

What are the primary risks associated with a sole-source award for critical satellite telecommunications?

The primary risks associated with a sole-source award for critical satellite telecommunications include: 1) **Higher Costs:** Without competition, the government may pay a premium compared to what could be achieved through a competitive bidding process. The vendor has less incentive to offer the lowest possible price. 2) **Limited Innovation:** A sole-source award can stifle innovation by not encouraging other companies to develop competing solutions or technologies. 3) **Vendor Lock-in:** The government may become dependent on a single vendor's technology and pricing structure, making it difficult and costly to switch providers in the future. 4) **Reduced Transparency:** Sole-source procurements often involve less public scrutiny and justification, potentially masking inefficiencies or suboptimal choices. 5) **Potential for Complacency:** The awarded contractor may face less pressure to continuously improve service quality or efficiency once they are the sole provider.

What is the strategic importance of KU-band spread spectrum services for the EP-3 aircraft's mission?

The EP-3 is an electronic intelligence (ELINT) reconnaissance aircraft, crucial for gathering signals intelligence. KU-band spread spectrum (KUSS) services are strategically vital for the EP-3's mission because they enable reliable, secure, and high-bandwidth data transmission in potentially hostile electronic warfare environments. The KU-band offers greater bandwidth than lower frequency bands, allowing for the rapid transfer of large volumes of collected intelligence data. The spread spectrum technique enhances the signal's resilience against jamming and interception, which is paramount when operating in contested airspace or near adversary electronic defenses. This ensures that critical intelligence gathered by the EP-3 can be transmitted back to command centers in near real-time, enabling timely decision-making and operational adjustments.

Are there any alternative satellite communication technologies or providers that NAVAIR could consider for future procurements?

Yes, NAVAIR could consider several alternative satellite communication technologies and providers for future procurements, depending on evolving mission requirements and technological advancements. Alternatives to KU-band spread spectrum might include services utilizing other frequency bands like Ka-band (offering even higher throughput) or X-band (often used for military secure communications). Providers beyond Viasat include companies like Intelsat, SES Government Solutions, Inmarsat, and Hughes Network Systems, each offering various government-specific satellite services. Furthermore, emerging technologies such as Low Earth Orbit (LEO) satellite constellations (e.g., from SpaceX's Starlink or OneWeb) offer potentially lower latency and higher bandwidth, though their suitability for specific military applications like airborne platforms requires careful assessment of coverage, security, and integration challenges. NAVAIR should periodically conduct market research and competitive analyses to identify the most cost-effective and technologically advanced solutions available.

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: HC101320R0007

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: $33,261,306

Exercised Options: $22,873,632

Current Obligation: $22,873,632

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Timeline