DoD's $35.4M Satellite Telecommunications Contract Awarded to ARINC INCORPORATED for 5 Years

Contract Overview

Contract Amount: $35,356,642 ($35.4M)

Contractor: Arinc Incorporated

Awarding Agency: Department of Defense

Start Date: 2021-10-01

End Date: 2026-09-30

Contract Duration: 1,825 days

Daily Burn Rate: $19.4K/day

Competition Type: NOT AVAILABLE FOR COMPETITION

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: O&M FUNDING BASE PERIOD

Place of Performance

Location: SCOTT AFB, SAINT CLAIR County, ILLINOIS, 62225

State: Illinois Government Spending

Plain-Language Summary

Department of Defense obligated $35.4 million to ARINC INCORPORATED for work described as: O&M FUNDING BASE PERIOD Key points: 1. Contract awarded for essential satellite telecommunications services. 2. Long-term contract duration suggests a need for sustained support. 3. Sole-source award raises questions about competition and potential cost savings. 4. Fixed-price contract type aims to control costs for the government. 5. Performance period spans five years, indicating a significant commitment. 6. Awarded by the Defense Information Systems Agency, a key DoD IT provider.

Value Assessment

Rating: fair

The contract value of $35.4 million over five years for satellite telecommunications services appears to be within a reasonable range for such specialized support. However, without specific details on the scope of services, equipment, and service level agreements, a precise value-for-money assessment is challenging. Benchmarking against similar sole-source contracts for satellite communications within the DoD would be necessary for a more definitive evaluation. The firm fixed-price structure provides cost certainty, but the absence of competition limits the potential for price reductions.

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. This typically occurs when only one responsible source can provide the required services or supplies. The lack of competition means that ARINC INCORPORATED was the only bidder, and there was no opportunity for other companies to offer their services or potentially lower prices. This approach can be justified for specialized or unique requirements but often leads to higher costs compared to a competitive procurement.

Taxpayer Impact: The absence of competition means taxpayers did not benefit from potential cost savings that could have been achieved through a bidding process. The government may have paid a premium due to the sole-source nature of this award.

Public Impact

Provides critical satellite telecommunications infrastructure for Department of Defense operations. Ensures reliable communication channels for military personnel and assets. Supports national security objectives by maintaining secure and robust communication networks. Geographic impact is likely global, given the nature of satellite communications. Workforce implications may involve specialized technical personnel for system maintenance and operation.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits price discovery and potential cost savings for taxpayers.
Lack of competition may indicate a lack of market availability or a strategic decision to use a specific provider.
Contract duration of five years requires careful monitoring to ensure continued value and performance.
Specific details on service scope and performance metrics are not readily available for a comprehensive assessment.

Positive Signals

Firm fixed-price contract provides cost certainty for the government.
Awarded to ARINC INCORPORATED, a known entity in the telecommunications sector.
Contract supports essential Defense Information Systems Agency (DISA) operations.
Long-term contract suggests a stable and reliable service provision.

Sector Analysis

The satellite telecommunications market is a critical component of the broader IT and defense sectors, providing essential connectivity for government and commercial entities worldwide. This contract falls within the specialized area of providing satellite-based communication services, which are vital for operations in remote locations, during emergencies, and for secure data transmission. The market is characterized by high barriers to entry due to technological complexity and infrastructure requirements. Comparable spending benchmarks are difficult to establish without detailed service specifications, but significant government investment in satellite communications is common across various agencies.

Small Business Impact

This contract does not appear to have a small business set-aside component, as indicated by the 'sb': false flag. There is no explicit information regarding subcontracting plans for small businesses. The award to a large, established contractor like ARINC INCORPORATED suggests that the primary focus was on meeting specific technical requirements rather than promoting small business participation. Further investigation into subcontracting opportunities would be needed to assess the impact on the small business ecosystem.

Oversight & Accountability

Oversight for this contract would primarily fall under the Defense Information Systems Agency (DISA) and potentially the Department of Defense's Inspector General. As a sole-source award, scrutiny may be higher to ensure the price is fair and reasonable. Performance monitoring would be crucial to ensure ARINC INCORPORATED meets the contracted service levels. Transparency regarding the justification for the sole-source award and the pricing structure would be key accountability measures.

Related Government Programs

Defense Information Systems Agency (DISA) Contracts
Satellite Communications Services
Department of Defense IT Procurement
Firm Fixed Price Contracts
Sole Source Procurements

Risk Flags

Sole-source award
Lack of competition
Potential for cost overruns
Vendor lock-in risk

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $35.4 million to ARINC INCORPORATED. O&M FUNDING BASE PERIOD

Who is the contractor on this award?

The obligated recipient is ARINC INCORPORATED.

Which agency awarded this contract?

Awarding agency: Department of Defense (Defense Information Systems Agency).

What is the total obligated amount?

The obligated amount is $35.4 million.

What is the period of performance?

Start: 2021-10-01. End: 2026-09-30.

What specific satellite telecommunications services are being provided under this contract?

The provided data indicates the contract is for 'Satellite Telecommunications' (NAICS code 517410). However, the specific services are not detailed. This could encompass a range of offerings, including satellite bandwidth, ground station access, network management, secure communication links, data transmission, and potentially hardware provisioning or maintenance. Given the awarding agency (DISA) and the client (Department of Defense), these services are likely critical for military operations, intelligence gathering, and command and control systems, requiring high reliability, security, and global reach. A more detailed statement of work or contract award justification would be needed to fully understand the scope.

What is the justification for awarding this contract on a sole-source basis?

Sole-source awards are typically justified when only one responsible source can provide the required supplies or services. For satellite telecommunications, this could be due to unique technical capabilities, proprietary technology, existing infrastructure integration, or specific security clearances held by only one contractor. The Defense Information Systems Agency (DISA) might have determined that ARINC INCORPORATED possesses the necessary specialized expertise, global network coverage, or specific satellite assets that cannot be replicated by other vendors within the required timeframe or budget. Without the official justification document, the precise reasons remain speculative, but it implies a critical need that only ARINC could fulfill.

How does the $35.4 million contract value compare to similar satellite telecommunications contracts within the DoD?

Benchmarking the $35.4 million value requires comparing it against contracts with similar scope, duration, and service levels. As a sole-source award over five years, direct comparisons are challenging. However, the average annual value is approximately $7.08 million. The DoD procures a wide array of satellite services, from dedicated bandwidth to full managed networks. Contracts for similar global, secure, and high-availability satellite communications can range from several million to hundreds of millions of dollars annually, depending on the specific requirements. Given the sole-source nature, it's crucial to ascertain if this price reflects market rates or a premium for exclusivity.

What are the key performance indicators (KPIs) or service level agreements (SLAs) associated with this contract?

The provided data does not specify the Key Performance Indicators (KPIs) or Service Level Agreements (SLAs) for this contract. However, for satellite telecommunications supporting the Department of Defense, critical SLAs would likely include metrics such as uptime/availability (e.g., 99.99%), latency, bandwidth guarantees, data throughput, security compliance (e.g., TEMPEST, encryption standards), and response times for technical support or outage resolution. The Defense Information Systems Agency (DISA) would typically define these to ensure mission-critical communication needs are met reliably and securely. The absence of this information in the summary data limits a full assessment of performance expectations.

What is ARINC INCORPORATED's track record with the Department of Defense, particularly in satellite communications?

ARINC INCORPORATED, now part of Jacobs Engineering Group, has a long history of providing aviation and defense communication and technology solutions. While specific details on their DoD satellite communications contracts are not provided here, they have been a significant player in aviation communications and have held various contracts with government agencies. Their experience in complex, mission-critical communication systems suggests a capability to meet DoD requirements. A deeper dive into their contract history with DISA and other defense entities would reveal the extent and success of their previous work in this specific domain.

Are there any identified risks associated with this sole-source contract, beyond the lack of competition?

Beyond the inherent risks of sole-source procurement (potential for higher costs, lack of innovation from competition), other risks could include vendor lock-in, where the government becomes overly reliant on ARINC's specific technology or infrastructure, making future transitions difficult or expensive. Performance risks exist if the contractor fails to meet stringent DoD requirements for reliability and security. Furthermore, geopolitical factors or changes in satellite technology could impact the long-term viability or cost-effectiveness of the chosen solution. Dependence on a single provider also increases vulnerability if that provider faces financial instability or operational disruptions.

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: NOT AVAILABLE FOR COMPETITION

Solicitation Procedures: ONLY ONE SOURCE

Solicitation ID: HC101321R0013

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: RTX Corp

Address: 2551 RIVA RD, ANNAPOLIS, MD, 21401

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $72,676,936

Exercised Options: $35,356,642

Current Obligation: $35,356,642

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: HC101321D0009

IDV Type: IDC

Timeline