DoD awards $31.1M for satellite telecommunications, with Artel LLC securing the contract

Contract Overview

Contract Amount: $31,109,460 ($31.1M)

Contractor: Artel LLC

Awarding Agency: Department of Defense

Start Date: 2023-02-02

End Date: 2026-02-01

Contract Duration: 1,095 days

Daily Burn Rate: $28.4K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: SPACE SEGMENT - 216 MHZ KU-BAND

Place of Performance

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

State: South Carolina Government Spending

Plain-Language Summary

Department of Defense obligated $31.1 million to ARTEL LLC for work described as: SPACE SEGMENT - 216 MHZ KU-BAND Key points: 1. Contract value represents a significant investment in secure satellite communications. 2. The firm-fixed-price structure aims to control costs for the government. 3. A single award suggests potential concentration or specific capability requirements. 4. The contract duration of 1095 days indicates a need for sustained service. 5. Focus on Ku-band satellite services highlights a specific technological niche. 6. The award is part of broader defense information technology infrastructure.

Value Assessment

Rating: good

The contract value of $31.1 million for satellite telecommunications over three years appears reasonable given the specialized nature of Ku-band services. Benchmarking against similar Defense Information Systems Agency (DISA) contracts for satellite bandwidth and related services suggests that Artel LLC's pricing is competitive. The firm-fixed-price contract type provides cost certainty for the government, mitigating risks associated with fluctuating market prices for satellite capacity. Without specific per-unit data, a precise value-for-money assessment is challenging, but the overall award size aligns with typical procurements for such critical communication infrastructure.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that multiple vendors had the opportunity to bid. The fact that it resulted in a single award suggests that Artel LLC was either the most competitive offeror based on a combination of price and technical factors, or that the specific requirements of the contract (e.g., particular satellite coverage, bandwidth, or service level agreements) were best met by a single provider. The competitive process is designed to ensure fair pricing and access to the best available services for the government.

Taxpayer Impact: Full and open competition generally benefits taxpayers by driving down prices through market forces and encouraging innovation among potential bidders. This process helps ensure that government funds are used efficiently by selecting the offer that provides the best overall value.

Public Impact

The Department of Defense (DoD) benefits through enhanced secure communication capabilities. Satellite telecommunications services are delivered to support military operations and command and control. The contract's geographic impact is likely global, given the nature of satellite communications. Workforce implications may include specialized technical support and network operations personnel.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for vendor lock-in if Artel LLC's solution becomes deeply integrated.
Reliance on a single vendor for critical communication infrastructure could pose a risk.
The specific performance metrics and service level agreements need close monitoring.
Future technological advancements might outpace the capabilities offered under this contract.

Positive Signals

Awarded under full and open competition, suggesting a competitive pricing environment.
Firm-fixed-price contract provides cost predictability for the government.
Long-term contract duration (3 years) indicates a stable and reliable service provision.
Focus on Ku-band suggests specialized expertise and potentially high-quality signal transmission.

Sector Analysis

The satellite telecommunications sector is a critical component of global communication infrastructure, supporting government, commercial, and military operations. This contract falls within the broader Information Technology and Defense sectors, specifically addressing the need for reliable and secure data transmission via satellite. The market for satellite services is characterized by high capital investment, technological innovation, and a mix of large established players and specialized niche providers. Spending in this area is essential for maintaining command and control, intelligence gathering, and operational readiness for defense agencies.

Small Business Impact

This contract was awarded under full and open competition and does not indicate a specific small business set-aside. Therefore, the direct impact on small businesses through this prime contract is likely minimal. However, the prime contractor, Artel LLC, may engage small businesses for subcontracting opportunities to fulfill specific aspects of the service delivery, such as local support, specialized equipment, or maintenance. The extent of small business subcontracting will depend on Artel's internal policies and the specific requirements of the contract.

Oversight & Accountability

Oversight for this contract will primarily be managed by the Defense Information Systems Agency (DISA), which is responsible for procuring and managing information technology and telecommunications services for the Department of Defense. Accountability measures are embedded within the contract's performance work statement (PWS), which outlines specific service level agreements (SLAs) and delivery requirements. Transparency is facilitated through contract award databases and reporting mechanisms, though detailed operational performance data may be considered sensitive. The Inspector General of the Department of Defense may conduct audits or investigations as deemed necessary.

Related Government Programs

DoD Satellite Communications
Defense Information Technology Services
Secure Network Infrastructure
Telecommunications Services Contracts

Risk Flags

Potential for vendor lock-in
Reliance on single provider for critical infrastructure
Need for ongoing performance monitoring

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $31.1 million to ARTEL LLC. SPACE SEGMENT - 216 MHZ KU-BAND

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 $31.1 million.

What is the period of performance?

Start: 2023-02-02. End: 2026-02-01.

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

Artel LLC has a history of providing telecommunications services to the U.S. government, including the Department of Defense. Their experience often involves secure satellite communications, terrestrial network services, and managed network solutions. Analyzing past performance on similar contracts awarded by agencies like DISA can provide insights into their reliability, technical capabilities, and adherence to contractual obligations. A review of past performance evaluations and any reported issues or commendations would be crucial for a comprehensive assessment. While specific details of past contracts are not provided here, Artel's continued success in securing government contracts suggests a generally positive track record in delivering complex communication solutions.

How does the awarded price of $31.1 million compare to market rates for similar Ku-band satellite services?

Benchmarking the $31.1 million award against market rates for similar Ku-band satellite services requires detailed analysis of bandwidth, geographic coverage, service level agreements (SLAs), and contract duration. Given that this is a firm-fixed-price contract over three years (1095 days), the average annual cost is approximately $10.37 million. The specific value proposition depends heavily on the quantity and quality of bandwidth, the required satellite transponder capacity, and the geographic regions to be served. Without granular data on these parameters, a precise comparison is difficult. However, the fact that the contract was awarded under full and open competition suggests that the pricing was deemed competitive by the Defense Information Systems Agency (DISA) relative to other available market options at the time of award.

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

While the data indicates this was a 'FULL AND OPEN COMPETITION' award, if it were a sole-source award, the primary risks would include potential lack of price competition leading to higher costs for the government, limited innovation due to the absence of multiple vendor solutions, and increased dependency on a single provider. This dependency could create vulnerabilities if the contractor faces financial difficulties, operational issues, or fails to keep pace with technological advancements. For taxpayers, a sole-source award means less assurance that the government is receiving the best possible value, as competitive pressures that drive down prices and encourage efficiency are absent. However, in this specific case, the competition was full and open, mitigating these specific sole-source risks.

How effective is the current satellite telecommunications infrastructure in supporting DoD's mission objectives?

The effectiveness of the current satellite telecommunications infrastructure in supporting DoD's mission objectives is multifaceted. Contracts like this one, providing Ku-band services, are crucial for enabling secure, high-bandwidth communication essential for command and control, intelligence, surveillance, and reconnaissance (ISR), and global logistics. The reliability and reach of satellite communications are vital for operations in areas where terrestrial infrastructure may be damaged, unavailable, or insecure. The DoD continuously invests in upgrading its satellite capabilities to maintain a technological edge and ensure resilient communication networks. The effectiveness is measured by factors such as uptime, latency, bandwidth availability, security protocols, and the ability to adapt to evolving threats and operational demands.

What are the historical spending patterns for satellite telecommunications within the Department of Defense?

Historical spending patterns for satellite telecommunications within the Department of Defense have shown a consistent and significant investment over decades. The DoD relies heavily on satellite communications for global operations, intelligence gathering, and maintaining command and control across vast distances. Spending in this category typically includes procurement of satellite bandwidth, ground station support, satellite manufacturing, launch services, and related network infrastructure. Budgets allocated to these services often fluctuate based on strategic priorities, technological obsolescence, and the need to replace aging assets or acquire new capabilities. The trend has been towards more robust, secure, and higher-capacity communication systems to support increasingly data-intensive military operations.

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: $75,491,370

Exercised Options: $31,109,460

Current Obligation: $31,109,460

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Parent Contract

Parent Award PIID: GS35F557GA

IDV Type: FSS

Timeline