DoD's $114.8M satellite telecommunications contract awarded to Artel LLC for KU-band services

Contract Overview

Contract Amount: $114,786,474 ($114.8M)

Contractor: Artel LLC

Awarding Agency: Department of Defense

Start Date: 2021-08-10

End Date: 2026-08-09

Contract Duration: 1,825 days

Daily Burn Rate: $62.9K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: SPACE SEGMENT- 250 MHZ (KU)

Place of Performance

Location: SHAW AFB, SUMTER County, SOUTH CAROLINA, 29152

State: South Carolina Government Spending

Plain-Language Summary

Department of Defense obligated $114.8 million to ARTEL LLC for work described as: SPACE SEGMENT- 250 MHZ (KU) Key points: 1. Value for money assessed through competitive bidding and fixed-price structure. 2. Competition dynamics indicate a robust market for satellite telecommunications. 3. Risk indicators include contract duration and reliance on a single award. 4. Performance context is within the Defense Information Systems Agency's mission. 5. Sector positioning is critical for military communication infrastructure. 6. The contract supports essential satellite services for national defense.

Value Assessment

Rating: good

The contract's firm fixed-price nature provides cost certainty for the government. Benchmarking against similar satellite telecommunications contracts is challenging without more granular data on service specifics (e.g., bandwidth, uptime guarantees, geographic coverage). However, the competitive award suggests a reasonable price was achieved. The total value of $114.8 million over five years indicates a significant investment in secure and reliable communication.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, suggesting that multiple qualified vendors had the opportunity to bid. The presence of a single award does not necessarily imply a lack of competition during the bidding phase, but rather that Artel LLC was selected as the best value. The competitive process is expected to drive favorable pricing and service terms.

Taxpayer Impact: Full and open competition generally benefits taxpayers by fostering a competitive environment that can lead to lower prices and better quality services, maximizing the value of federal spending.

Public Impact

The Department of Defense (DoD) is the primary beneficiary, receiving critical satellite telecommunications services. Services delivered include satellite bandwidth and related telecommunications support for military operations. The geographic impact is likely global, supporting deployed forces and command centers. Workforce implications may involve specialized technical roles within the contractor's organization and potentially within DISA for oversight.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Contract duration of five years could lead to vendor lock-in or missed opportunities for more cost-effective solutions if market prices decrease.
Reliance on a single award for a critical service introduces risk if the contractor faces performance issues or financial instability.

Positive Signals

Awarded under full and open competition, indicating a competitive bidding process.
Firm fixed-price contract type provides budget certainty and limits cost overruns.
The contract supports essential defense communication infrastructure, a high-priority area.

Sector Analysis

The satellite telecommunications market is a vital component of the broader IT and defense sectors, providing essential connectivity for government and commercial entities. This contract falls within the specialized area of military satellite communications, which requires high reliability, security, and global reach. Comparable spending benchmarks are difficult to establish without specific service details, but the overall market for defense telecommunications is substantial, with significant government investment.

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, there is no direct analysis of small business set-aside implications. However, large prime contractors like Artel LLC are often required to meet subcontracting goals with small businesses, which could indirectly benefit the small business ecosystem. Further investigation into subcontracting plans would be needed for a complete picture.

Oversight & Accountability

Oversight is likely managed by the Defense Information Systems Agency (DISA), which is responsible for providing IT and telecommunications services to the DoD. Accountability measures would be embedded in the contract's performance standards and delivery requirements. Transparency is facilitated through contract award databases, though detailed performance metrics may be considered sensitive. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

DoD Satellite Communications
Defense Information Systems Network (DISN)
Military Satellite Communications Systems
Global Satellite Communications

Risk Flags

Contract Duration
Single Award Risk
Technological Obsolescence

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $114.8 million to ARTEL LLC. SPACE SEGMENT- 250 MHZ (KU)

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 $114.8 million.

What is the period of performance?

Start: 2021-08-10. End: 2026-08-09.

What is Artel LLC's track record with the Department of Defense and DISA for similar satellite telecommunications services?

Artel LLC has a significant history of providing telecommunications services to the U.S. government, including the Department of Defense and various agencies. Their contract portfolio often includes satellite communications, terrestrial long-haul, and managed network services. For DISA specifically, Artel has been a key provider under various contracts, including those supporting the Global Communications and Information Technology Services (G6) and other enterprise IT initiatives. Their experience suggests a familiarity with the demanding requirements of military communications, including uptime, security, and global reach. Reviewing past performance evaluations and contract modifications would provide deeper insights into their reliability and effectiveness in fulfilling similar satellite telecommunications requirements.

How does the awarded price of $114.8 million compare to market rates for similar satellite bandwidth and services over a five-year period?

Benchmarking the $114.8 million award against market rates for similar satellite bandwidth and services over five years requires detailed specifications of the KU-band capacity, service level agreements (SLAs), geographic coverage, and any included managed services. General market trends indicate that satellite bandwidth costs can vary significantly based on these factors, as well as the specific satellite constellations and ground infrastructure utilized. Given that this is a firm fixed-price contract awarded through full and open competition, it suggests that the price achieved was deemed competitive by the government at the time of award. However, without access to the specific technical requirements and the competitive bids received, a precise comparison to prevailing market rates is not feasible. Industry reports on defense telecommunications spending and satellite service pricing could offer broader context.

What are the primary risks associated with a five-year contract for satellite telecommunications, and how are they mitigated?

The primary risks associated with a five-year contract for satellite telecommunications include technological obsolescence, market price fluctuations, and potential vendor performance issues. Technological advancements in satellite technology (e.g., new constellations, higher throughput satellites) could make the contracted services less efficient or cost-effective over time. Market prices for bandwidth might decrease due to increased competition or new technologies, potentially leading to the government overpaying if locked into a fixed price. Vendor performance risk involves the possibility of service disruptions, security breaches, or failure to meet SLAs. Mitigation strategies often include robust performance monitoring, clear contract clauses for service level adherence, options for contract modification or termination for cause, and potentially incorporating market review clauses. The firm fixed-price nature helps mitigate cost overrun risks for the government, but doesn't protect against potential overpayment if market prices fall significantly.

What is the historical spending pattern for satellite telecommunications by the Department of Defense and DISA?

The Department of Defense (DoD) and its component agencies like the Defense Information Systems Agency (DISA) have consistently allocated substantial budgets towards satellite telecommunications. Historical spending reflects a continuous need for secure, reliable, and global communication capabilities to support military operations, intelligence gathering, and command and control. DISA, in particular, manages a vast network infrastructure, including satellite services, to connect forces worldwide. Spending patterns have evolved with technological advancements, shifting from traditional geostationary (GEO) satellites to incorporating medium Earth orbit (MEO) and low Earth orbit (LEO) constellations, as well as hybrid networks. The overall trend indicates a sustained and significant investment in satellite communications, driven by the evolving geopolitical landscape and the increasing reliance on data-intensive military applications. Specific annual spending figures can fluctuate based on major program procurements and contract renewals.

How does the 'SPACE SEGMENT- 250 MHZ (KU)' specification translate into practical communication capabilities for the end-user?

The specification 'SPACE SEGMENT- 250 MHZ (KU)' refers to a specific portion of the electromagnetic spectrum (Ku-band) and the amount of bandwidth allocated within that band. The Ku-band is commonly used for satellite communications due to its balance of capacity and atmospheric penetration. The '250 MHZ' indicates the width of the frequency channel being utilized, which directly correlates to the potential data throughput or capacity available. More bandwidth generally allows for higher data rates, supporting applications like high-definition video, large file transfers, real-time voice communications, and sensor data transmission. For the end-user in a military context, this translates into the ability to maintain command and control, share intelligence, conduct remote operations, and communicate effectively across vast distances, even in austere or contested environments where terrestrial infrastructure may be unavailable or compromised. The actual realized capability also depends on the ground equipment, satellite power, and network architecture.

Industry Classification

NAICS: Information › Satellite Telecommunications › Satellite Telecommunications

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

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, HERNDON, VA, 20171

Business Categories: Category Business, Limited Liability Corporation, Not Designated a Small Business, Partnership or Limited Liability Partnership, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $172,314,853

Exercised Options: $114,786,474

Current Obligation: $114,786,474

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Parent Contract

Parent Award PIID: GS35F557GA

IDV Type: FSS

Timeline