Datapath Inc. awarded $18M for satellite communications, highlighting a competitive procurement process

Contract Overview

Contract Amount: $18,037,787 ($18.0M)

Contractor: Datapath, Inc.

Awarding Agency: Department of Defense

Start Date: 2007-07-31

End Date: 2009-01-01

Contract Duration: 520 days

Daily Burn Rate: $34.7K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 5

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: SATELLITE FOR NATIONAL GUARD

Place of Performance

Location: CEDAR RAPIDS, LINN County, IOWA, 52498

State: Iowa Government Spending

Plain-Language Summary

Department of Defense obligated $18.0 million to DATAPATH, INC. for work described as: SATELLITE FOR NATIONAL GUARD Key points: 1. The contract value of $18 million appears reasonable given the specialized nature of satellite communications equipment. 2. Full and open competition suggests a healthy market for these services, potentially leading to better pricing. 3. The firm-fixed-price contract type shifts risk to the contractor, which is generally favorable for the government. 4. Awarded under the 'Radio and Television Broadcasting and Wireless Communications Equipment Manufacturing' NAICS code, this contract falls within a niche but critical sector. 5. The duration of the contract (520 days) is relatively short, suggesting a focused scope of work. 6. The absence of small business set-aside indicates the primary contractor is likely not a small business, but subcontracting opportunities may exist.

Value Assessment

Rating: good

The contract value of $18,037,786.90 for satellite communications equipment and services appears to be within a reasonable range for specialized defense procurements. Benchmarking against similar contracts for satellite ground systems or communication terminals would provide a more precise value-for-money assessment. However, the firm-fixed-price contract type is generally advantageous as it caps the government's financial exposure. The number of bids received (5) suggests a degree of market interest and potential for competitive pricing.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that all responsible sources were permitted to submit bids. Five bids were received, suggesting a competitive environment for this type of satellite communication solution. The presence of multiple bidders generally fosters price discovery and encourages contractors to offer their best pricing and technical solutions to win the award.

Taxpayer Impact: A competitive procurement process like this one is beneficial for taxpayers as it is more likely to result in a fair and reasonable price for the required satellite equipment and services, avoiding potential overpayment associated with less competitive methods.

Public Impact

The National Guard benefits from enhanced satellite communication capabilities, crucial for maintaining operational readiness and command and control in various environments. The contract delivers essential wireless communications equipment, likely supporting secure and reliable data transmission for military operations. The geographic impact is national, as the National Guard operates across all states and territories, requiring robust communication infrastructure. Workforce implications may include specialized technical roles for installation, maintenance, and operation of the satellite systems, potentially benefiting skilled labor in the communications sector.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for vendor lock-in if the chosen satellite technology becomes proprietary or difficult to integrate with other systems.
Dependence on a single awardee for critical communication infrastructure could pose a risk if the contractor faces financial instability or operational issues.
Ensuring long-term sustainment and upgrade paths for the satellite equipment will be crucial beyond the initial contract period.

Positive Signals

The use of firm-fixed-price contract type effectively transfers cost overrun risks to the contractor.
Full and open competition indicates a robust market and likely competitive pricing, maximizing taxpayer value.
The award to Datapath, Inc. suggests they possess the necessary technical expertise and capabilities for this specialized requirement.
The contract supports a critical national security function for the National Guard, ensuring operational effectiveness.

Sector Analysis

The contract falls within the broader Information Technology and Telecommunications sector, specifically focusing on specialized wireless communications equipment manufacturing. The market for satellite communication systems is characterized by high barriers to entry due to technological complexity and significant R&D investment. This contract likely represents a procurement of ground segment equipment or related services, a vital component of military and government communication networks. Comparable spending benchmarks would involve analyzing other DoD or agency contracts for similar satellite terminals, data links, or communication infrastructure.

Small Business Impact

The data indicates this contract was not set aside for small businesses (ss: false, sb: false). This suggests the primary award was made to a large business capable of fulfilling the complex requirements. While there's no direct indication of small business subcontracting goals in the provided data, large defense contracts often include provisions for small business participation. The impact on the small business ecosystem would depend on whether Datapath, Inc. actively seeks out and utilizes small business subcontractors for specialized components or services.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of the Army's contracting and program management offices. Accountability measures are embedded in the firm-fixed-price contract terms, requiring delivery of specified goods or services. Transparency is generally facilitated through contract award databases like FPDS. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected or alleged during the contract's performance or closeout.

Related Government Programs

DoD Satellite Communications Systems
National Guard Bureau Communications Modernization
Tactical Data Links
Wireless Communication Equipment Procurement
Defense Information Systems Network (DISN)

Risk Flags

Potential for technology obsolescence
Reliance on contractor performance
Cybersecurity vulnerabilities
Integration challenges with existing systems

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $18.0 million to DATAPATH, INC.. SATELLITE FOR NATIONAL GUARD

Who is the contractor on this award?

The obligated recipient is DATAPATH, INC..

Which agency awarded this contract?

Awarding agency: Department of Defense (Department of the Army).

What is the total obligated amount?

The obligated amount is $18.0 million.

What is the period of performance?

Start: 2007-07-31. End: 2009-01-01.

What is Datapath, Inc.'s track record with the Department of Defense and specifically the Army?

Datapath, Inc. has a history of receiving contracts from the Department of Defense, including the Army, primarily for specialized communication systems and equipment. Analyzing their past performance on similar contracts would reveal their reliability, adherence to schedule, and quality of deliverables. A review of contract award data would show the volume and value of previous awards, as well as any performance issues or disputes. This specific contract, valued at approximately $18 million and awarded in 2007, indicates a sustained relationship with the agency for critical communication needs. Further investigation into contract closeout data and any past performance reviews would provide a more comprehensive understanding of their track record.

How does the $18 million contract value compare to similar satellite communication procurements for the National Guard or other military branches?

The $18 million contract value for satellite communication equipment awarded to Datapath, Inc. needs to be contextualized against similar procurements. Contracts for satellite ground terminals, communication nodes, or related services can vary significantly based on technical specifications, quantity, and duration. For instance, procurements for high-bandwidth, secure, or mobile satellite terminals often command higher prices. Comparing this award to other recent contracts for similar capabilities within the Army, Air Force, or other branches, particularly those awarded under full and open competition, would help establish a benchmark. Factors like the specific type of satellite technology (e.g., Ka-band, Ku-band, X-band), data rates, and integration requirements significantly influence cost. Without specific comparable contract data, it's challenging to definitively state if $18 million represents excellent or fair value, but it falls within a plausible range for specialized defense communication systems.

What are the primary risks associated with this satellite communication contract for the National Guard?

Several risks are associated with this satellite communication contract. Technical obsolescence is a significant concern in the rapidly evolving field of satellite technology; the equipment procured may become outdated relatively quickly. Operational risks include potential disruptions to service due to satellite failures, ground station issues, or cybersecurity threats targeting the communication network. Contractor performance risk is also present; Datapath, Inc. might face challenges in delivering the equipment on time, meeting quality standards, or providing adequate support, potentially impacting the National Guard's operational readiness. Furthermore, dependence on a specific vendor's technology could lead to vendor lock-in, making future upgrades or transitions more complex and costly. Ensuring robust cybersecurity measures and contingency plans for service disruptions are critical mitigation strategies.

How effective has the National Guard been in leveraging satellite communications for its missions, and does this contract contribute to that effectiveness?

Satellite communications are fundamental to the National Guard's ability to maintain command and control, share intelligence, and coordinate operations across diverse geographic locations, especially in situations where terrestrial infrastructure is compromised or unavailable. This contract, providing essential wireless communication equipment, directly contributes to enhancing the National Guard's mission effectiveness by ensuring reliable and secure data transmission. The effectiveness of these systems is measured by their uptime, bandwidth capacity, security features, and interoperability with existing command and control systems. By investing in such equipment, the National Guard aims to improve its situational awareness, responsiveness, and overall operational capability, particularly for state-level emergency response and federal missions.

What has been the historical spending trend for satellite communication systems by the Department of the Army or the National Guard Bureau?

Historical spending trends for satellite communication systems by the Department of the Army and the National Guard Bureau generally show consistent investment due to the critical nature of these capabilities for military operations. Spending fluctuates based on modernization initiatives, technological advancements, and specific operational requirements. Over the years, there has been a trend towards more robust, secure, and mobile satellite communication solutions to support deployed forces and domestic operations. Analyzing spending data over the past decade would likely reveal significant investments in various segments of satellite communications, including ground terminals, satellite bandwidth, and associated services. This $18 million contract awarded in 2007 fits within this broader pattern of sustained investment in essential communication infrastructure.

What is the typical duration and value range for firm-fixed-price contracts related to specialized communication equipment procurement?

Firm-fixed-price (FFP) contracts for specialized communication equipment typically range in value from hundreds of thousands to tens or even hundreds of millions of dollars, depending on the complexity and scale of the requirement. The duration of such contracts often varies from a few months for off-the-shelf equipment to several years for complex systems requiring development, integration, and testing. For specialized satellite communication hardware, contracts might focus on procurement and initial fielding, with durations ranging from 1 to 3 years, aligning with the $18 million, 520-day contract awarded to Datapath, Inc. The FFP structure is favored for procurements where the scope of work is well-defined, allowing the government to establish a ceiling price and transfer cost-related risks to the contractor, promoting cost certainty.

Industry Classification

NAICS: Manufacturing › Communications Equipment Manufacturing › Radio and Television Broadcasting and Wireless Communications Equipment Manufacturing

Product/Service Code: COMM/DETECT/COHERENT RADIATION

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Offers Received: 5

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Rockwell Collins, Inc. (UEI: 962960589)

Address: 400 COLLINS RD NE, CEDAR RAPIDS, IA, 02

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Manufacturer of Goods, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $20,303,538

Exercised Options: $18,037,787

Current Obligation: $18,037,787

Contract Characteristics

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: W15P7T06DL215

IDV Type: IDC

Timeline