DoD Awards $198.6M Satellite Telecommunications Contract to SpaceX Under Full and Open Competition
Contract Overview
Contract Amount: $198,580,260 ($198.6M)
Contractor: Space Exploration Technologies Corp.
Awarding Agency: Department of Defense
Start Date: 2024-09-11
End Date: 2026-09-29
Contract Duration: 748 days
Daily Burn Rate: $265.5K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 1
Pricing Type: FIRM FIXED PRICE
Sector: IT
Official Description: SBS003512 BEST EFFORT
Place of Performance
Location: FORT GEORGE G MEADE, ANNE ARUNDEL County, MARYLAND, 20755
State: Maryland Government Spending
Plain-Language Summary
Department of Defense obligated $198.6 million to SPACE EXPLORATION TECHNOLOGIES CORP. for work described as: SBS003512 BEST EFFORT Key points: 1. Significant contract awarded to a major aerospace player, SpaceX. 2. Full and open competition suggests a robust price discovery process. 3. Potential risks include reliance on a single provider for critical satellite services. 4. The IT and Defense sectors are heavily invested in advanced telecommunications.
Value Assessment
Rating: good
The contract value of $198.6 million for 748 days appears reasonable given the specialized nature of satellite telecommunications. Benchmarking against similar large-scale satellite service contracts would provide a more precise assessment.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
The contract was awarded through full and open competition, indicating multiple bidders likely participated. This competitive process is expected to drive favorable pricing and ensure the government receives the best value.
Taxpayer Impact: The competitive award process aims to maximize taxpayer value by securing cost-effective satellite telecommunications services.
Public Impact
Ensures critical satellite communication capabilities for the Department of Defense. Supports advanced space-based technology development and deployment. Potential for enhanced national security through reliable communication networks.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Vendor Lock-in Risk
- Technological Obsolescence
- Geopolitical Dependencies
Positive Signals
- Innovation from a leading private space company
- Potential for high-speed, reliable communication
- Supports critical defense missions
Sector Analysis
This contract falls within the IT and Defense sectors, specifically focusing on satellite telecommunications. Spending in this area is crucial for modern defense operations, enabling secure and widespread communication.
Small Business Impact
This contract was awarded to SpaceX, a large aerospace corporation, and does not appear to include specific provisions or set-asides for small businesses. The focus is on specialized capabilities likely beyond the scope of most SMBs.
Oversight & Accountability
The award process under full and open competition suggests a degree of oversight. However, ongoing monitoring of performance, cost, and adherence to contract terms will be essential for accountability.
Related Government Programs
- Satellite Telecommunications
- Department of Defense Contracting
- Defense Information Systems Agency Programs
Risk Flags
- High contract value
- Reliance on a single, dominant provider
- Potential for cost overruns if not closely managed
- Long contract duration increases exposure to market shifts
Tags
satellite-telecommunications, department-of-defense, md, delivery-order, 100m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $198.6 million to SPACE EXPLORATION TECHNOLOGIES CORP.. SBS003512 BEST EFFORT
Who is the contractor on this award?
The obligated recipient is SPACE EXPLORATION TECHNOLOGIES CORP..
Which agency awarded this contract?
Awarding agency: Department of Defense (Defense Information Systems Agency).
What is the total obligated amount?
The obligated amount is $198.6 million.
What is the period of performance?
Start: 2024-09-11. End: 2026-09-29.
What is the projected cost per unit of service, and how does it compare to industry benchmarks for similar satellite telecommunication services?
The total contract value is $198.6 million over approximately 748 days. Without specific details on the units of service (e.g., bandwidth, data volume, terminal access), a precise per-unit cost cannot be calculated. However, a preliminary assessment would involve comparing the average daily cost ($198.6M / 748 days ≈ $265,500/day) against market rates for comparable satellite communication solutions.
What are the primary risks associated with relying on a single provider, SpaceX, for these critical satellite telecommunications?
Key risks include potential vendor lock-in, where the government becomes heavily dependent on SpaceX's infrastructure and pricing, limiting future flexibility. There's also the risk of service disruptions due to unforeseen technical issues, launch failures, or geopolitical factors affecting SpaceX's operations. Furthermore, reliance on one provider could stifle competition and innovation in the long run.
How effectively does this contract leverage competition to ensure optimal value and technological advancement for the Department of Defense?
The contract's foundation in 'full and open competition' is a strong indicator of effective value realization, as it theoretically allows all qualified vendors to bid, driving down prices. However, the long-term effectiveness in fostering technological advancement depends on contract clauses that incentivize innovation and the government's ability to adapt to evolving technologies beyond the current scope.
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
Solicitation ID: HC101322R0005
Offers Received: 1
Pricing Type: FIRM FIXED PRICE (J)
Evaluated Preference: NONE
Contractor Details
Address: 1 ROCKET RD, HAWTHORNE, CA, 90250
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: $228,831,010
Exercised Options: $198,580,260
Current Obligation: $198,580,260
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES
Cost or Pricing Data: NO
Parent Contract
Parent Award PIID: HC101323D9000
IDV Type: IDC
Timeline
Start Date: 2024-09-11
Current End Date: 2026-09-29
Potential End Date: 2026-09-29 00:00:00
Last Modified: 2025-11-26
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