DoD awards $168M contract for LEO satellite broadband terminal development and integration

Contract Overview

Contract Amount: $16,837,863 ($16.8M)

Contractor: Inmarsat Navigation Ventures Ltd

Awarding Agency: Department of Defense

Start Date: 2010-08-13

End Date: 2016-05-31

Contract Duration: 2,118 days

Daily Burn Rate: $8.0K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: INMARSAT WILL DEVELOP AND CERTIFY A TRANSCEIVER TERMINAL FOR THE INMARSAT BROADBAND GLOBAL AREA NETWORK (BGAN) SERVICE PROVIDED BY THE I-4 CONSTELLATION THAT IS CAPABLE OF OPERATION FROM ON-BOARD A LOW EARTH ORBIT (LEO) SATELLITE, MAKE APPROPRIATE MODIFICATIONS TO THE BGAN NETWORK TO SUPPORT SPACE-BASED TERMINAL EQUIPMENT, SUPPORT THE INTEGRATION OF THE SPACE-BASED BGAN TERMINAL WITH A GOVERNMENT DEMONSTRATION SATELLITE, AND SUPPORT THE ON-ORBIT CONNECTIVITY VIA THE BGAN NETWORK FOR THE DEMONSTRATION SATELLITE MISSION.

Place of Performance

Location: GOLDEN, JEFFERSON County, COLORADO, 80401

State: Colorado Government Spending

Plain-Language Summary

Department of Defense obligated $16.8 million to INMARSAT NAVIGATION VENTURES LTD for work described as: INMARSAT WILL DEVELOP AND CERTIFY A TRANSCEIVER TERMINAL FOR THE INMARSAT BROADBAND GLOBAL AREA NETWORK (BGAN) SERVICE PROVIDED BY THE I-4 CONSTELLATION THAT IS CAPABLE OF OPERATION FROM ON-BOARD A LOW EARTH ORBIT (LEO) SATELLITE, MAKE APPROPRIATE MODIFICATIONS TO THE BGAN NETWOR… Key points: 1. Contract focuses on developing and certifying a transceiver terminal for LEO satellite operation. 2. Includes modifications to the BGAN network to support space-based terminal equipment. 3. Supports integration of the terminal with a government demonstration satellite. 4. Contract aims to enable on-orbit connectivity via the BGAN network for a demonstration satellite mission. 5. This is a research and development effort in physical sciences and engineering. 6. The contract is a firm fixed-price definitive contract.

Value Assessment

Rating: fair

The total contract value is $168.4 million. Benchmarking this specific type of R&D contract is challenging due to its unique technical requirements and the novelty of integrating LEO satellite operations with an existing broadband network. The firm fixed-price structure suggests that the contractor bears the risk of cost overruns, which can be a positive indicator for value if the scope is well-defined. However, without detailed cost breakdowns or comparisons to similar developmental efforts, a definitive assessment of value for money is difficult.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was not competed, indicating a sole-source award. The justification for a sole-source award typically involves unique capabilities or proprietary technology held by a single vendor. In this case, Inmarsat Navigation Ventures Ltd. likely possesses the specific expertise and existing infrastructure related to the Inmarsat Broadband Global Area Network (BGAN) service and its I-4 constellation that made them the only viable option for this specialized development.

Taxpayer Impact: Sole-source awards can limit opportunities for competitive pricing, potentially leading to higher costs for taxpayers compared to a competed contract. The absence of competition means there was no market pressure to drive down prices.

Public Impact

The Department of Defense is the primary beneficiary, seeking enhanced satellite communication capabilities. Services delivered include the development of advanced satellite transceiver technology and network integration. The geographic impact is global, leveraging Inmarsat's existing I-4 constellation. Workforce implications may include specialized engineers and technicians in satellite communications and network engineering.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition may result in higher costs for taxpayers.
The complexity of integrating LEO satellites with existing networks presents technical risks.
The firm fixed-price nature requires careful scope management to avoid disputes.

Positive Signals

Focus on developing innovative LEO satellite communication technology.
Leverages existing Inmarsat BGAN infrastructure, potentially reducing development time.
Firm fixed-price contract shifts cost risk to the contractor.

Sector Analysis

This contract falls within the Information Technology and Defense sectors, specifically focusing on satellite communications and network development. The market for satellite-based broadband services is growing, driven by demand for reliable connectivity in remote or mobile environments. This contract represents a specific R&D investment to adapt existing commercial capabilities for advanced defense applications, potentially benchmarking against other government investments in secure and resilient communication systems.

Small Business Impact

This contract does not appear to have a small business set-aside. Given the specialized nature of satellite technology development and network integration, it is unlikely that significant subcontracting opportunities would be directed towards small businesses unless they possess highly niche expertise relevant to the project's core requirements.

Oversight & Accountability

Oversight for this contract would typically be managed by the Defense Contract Management Agency (DCMA), which is responsible for ensuring contractor performance and compliance with contract terms. The firm fixed-price nature of the award provides a degree of accountability by placing cost risk on the contractor. Transparency regarding the specific technical milestones and deliverables would be subject to the contract's reporting requirements.

Related Government Programs

Satellite Communications
Broadband Global Area Network (BGAN)
Low Earth Orbit (LEO) Satellites
Research and Development Contracts
Department of Defense Communications Systems

Risk Flags

Sole-source award
Technical complexity
Integration risk

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $16.8 million to INMARSAT NAVIGATION VENTURES LTD. INMARSAT WILL DEVELOP AND CERTIFY A TRANSCEIVER TERMINAL FOR THE INMARSAT BROADBAND GLOBAL AREA NETWORK (BGAN) SERVICE PROVIDED BY THE I-4 CONSTELLATION THAT IS CAPABLE OF OPERATION FROM ON-BOARD A LOW EARTH ORBIT (LEO) SATELLITE, MAKE APPROPRIATE MODIFICATIONS TO THE BGAN NETWORK TO SUPPORT SPACE-BASED TERMINAL EQUIPMENT, SUPPORT THE INTEGRATION OF THE SPACE-BASED BGAN TERMINAL WITH A GOVERNMENT DEMONSTRATION SATELLITE, AND SUPPORT THE ON-ORBIT CONNECTIVITY VIA THE BGAN NETWORK FOR THE DEMONSTR

Who is the contractor on this award?

The obligated recipient is INMARSAT NAVIGATION VENTURES LTD.

Which agency awarded this contract?

Awarding agency: Department of Defense (Defense Contract Management Agency).

What is the total obligated amount?

The obligated amount is $16.8 million.

What is the period of performance?

Start: 2010-08-13. End: 2016-05-31.

What is the specific technical innovation Inmarsat is developing for LEO satellite operation?

Inmarsat is developing a transceiver terminal that can operate from a Low Earth Orbit (LEO) satellite, enabling it to connect to the existing Inmarsat Broadband Global Area Network (BGAN) service provided by their I-4 constellation. This involves creating hardware and software modifications to allow a space-based terminal to communicate effectively within the BGAN network. The goal is to enable on-orbit connectivity for a government demonstration satellite mission, suggesting a need for advanced, resilient, and potentially secure communication capabilities that can be leveraged from space.

How does this contract compare to other DoD investments in satellite communications?

This contract represents a specific R&D investment focused on adapting commercial satellite technology (BGAN) for LEO satellite operations. It differs from contracts focused on building dedicated military satellite constellations or procuring satellite bandwidth. The $168 million value is significant for a development effort but may be modest compared to the multi-billion dollar programs for large satellite systems. Its uniqueness lies in the integration of LEO capabilities with an existing geostationary-based network, aiming for enhanced flexibility and potentially lower latency communication solutions.

What are the primary risks associated with this contract?

The primary risks include technical challenges in developing and certifying a LEO-compatible transceiver and modifying the BGAN network. Integration risks between the space-based terminal and the government demonstration satellite are also significant. Furthermore, the sole-source nature of the award means there was no competitive pressure to optimize pricing, and the firm fixed-price contract places the burden of cost overruns on Inmarsat, which could lead to scope disputes if unforeseen technical hurdles arise.

What is the expected impact of this development on future DoD satellite communication capabilities?

This development could pave the way for more flexible and responsive satellite communication systems for the DoD. By enabling LEO satellite operations within an established network, it might offer advantages in terms of reduced latency and potentially broader coverage. If successful, it could lead to hybrid communication architectures that leverage both geostationary and LEO assets, providing more resilient and diverse communication options for military operations globally.

What is Inmarsat's track record in providing satellite communication services to the government?

Inmarsat has a long history of providing global mobile satellite communication services. They are a well-established commercial provider with extensive experience in managing satellite constellations and delivering broadband services. While specific details of their government contracts are often proprietary, their commercial BGAN service is known for its reliability in remote and challenging environments, suggesting a solid foundation for undertaking this type of development for a government client.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Scientific Research and Development Services › Research and Development in the Physical, Engineering, and Life Sciences (except Biotechnology)

Product/Service Code: RESEARCH AND DEVELOPMENT › DEFENSE (OTHER) R&D

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Inmarsat PLC (UEI: 736255410)

Address: 99 CITY ROAD, LONDON

Business Categories: Category Business, Foreign Owned, Not Designated a Small Business, Partnership or Limited Liability Partnership, Special Designations

Financial Breakdown

Contract Ceiling: $16,896,743

Exercised Options: $16,896,743

Current Obligation: $16,837,863

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline