Viasat Inc. awarded $42.6M contract for MIDS LVT Block Upgrade 2, impacting naval communications
Contract Overview
Contract Amount: $42,582,822 ($42.6M)
Contractor: Viasat Inc
Awarding Agency: Department of Defense
Start Date: 2013-11-04
End Date: 2019-12-31
Contract Duration: 2,248 days
Daily Burn Rate: $18.9K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 1
Pricing Type: COST PLUS INCENTIVE FEE
Sector: Defense
Official Description: MIDS LVT BLOCK UPGRADE 2 (BU2)
Place of Performance
Location: CARLSBAD, SAN DIEGO County, CALIFORNIA, 92009
Plain-Language Summary
Department of Defense obligated $42.6 million to VIASAT INC for work described as: MIDS LVT BLOCK UPGRADE 2 (BU2) Key points: 1. Contract value of $42.6M for a significant upgrade to a critical defense system. 2. Full and open competition suggests a potentially competitive bidding process. 3. Delivery order under a larger contract indicates ongoing program support. 4. The upgrade focuses on enhancing communication equipment, crucial for operational effectiveness. 5. Contract duration of over 6 years points to a long-term commitment. 6. The specific NAICS code (334290) relates to communications equipment manufacturing.
Value Assessment
Rating: good
The contract value of $42.6 million for the MIDS LVT Block Upgrade 2 appears reasonable given the scope of upgrading a critical defense communication system. Benchmarking against similar large-scale defense electronics upgrades suggests that costs are within expected ranges, especially considering the specialized nature of the technology and the extensive testing and integration required. The Cost Plus Incentive Fee (CPIF) pricing structure allows for cost savings if performance targets are met, aligning contractor incentives with government objectives.
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 were eligible to bid. The fact that it is a single award delivery order suggests that Viasat Inc. was selected as the most advantageous offer. The level of competition, while not explicitly detailed by the number of bidders, is generally expected to drive better pricing and innovation compared to sole-source or limited competition scenarios.
Taxpayer Impact: Full and open competition provides taxpayers with assurance that the government sought the best value, potentially leading to more cost-effective solutions and preventing price inflation often associated with less competitive procurements.
Public Impact
Naval forces benefit from enhanced situational awareness and secure communication capabilities. The upgrade delivers improved functionality for the Multifunctional Information Distribution System (MIDS) Low Volume Terminal (LVT). Operations in the Pacific region, where the Department of the Navy has significant presence, are likely to see direct impact. The contract supports specialized technical roles within Viasat Inc. and potentially its subcontractors.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Potential for cost overruns inherent in Cost Plus Incentive Fee contracts if performance targets are not met efficiently.
- Long contract duration could lead to scope creep or evolving technological requirements not fully captured in the initial award.
- Dependence on a single contractor for a critical system upgrade raises concerns about long-term sustainment and future competition.
Positive Signals
- Award under full and open competition suggests a robust selection process and potential for competitive pricing.
- The CPIF contract structure incentivizes Viasat to perform efficiently and meet performance objectives.
- Upgrade to a critical communication system enhances national security and operational readiness.
Sector Analysis
The defense electronics sector is characterized by high R&D investment, stringent quality requirements, and long product lifecycles. Contracts for communication equipment upgrades, like the MIDS LVT Block Upgrade 2, are vital for maintaining technological superiority. The market is often dominated by a few large, specialized contractors capable of meeting the rigorous demands of military applications. Spending in this sub-sector is driven by the need for secure, reliable, and advanced communication systems to support global military operations.
Small Business Impact
There is no explicit indication of small business set-asides or subcontracting plans within the provided data. However, given the specialized nature of defense electronics and the prime contractor being Viasat Inc., it is possible that smaller, specialized firms could be involved as subcontractors. Further analysis would be needed to determine the extent of small business participation and its impact on the broader small business ecosystem.
Oversight & Accountability
Oversight for this contract would typically fall under the Department of the Navy's contracting and program management offices. The Cost Plus Incentive Fee structure includes mechanisms for monitoring costs and performance against established targets. Transparency is generally maintained through contract reporting requirements. The Inspector General for the Department of Defense would have jurisdiction to investigate any potential fraud, waste, or abuse related to this contract.
Related Government Programs
- MIDS LVT Program
- Tactical Data Links
- Naval Communication Systems
- Defense Electronics Manufacturing
Risk Flags
- Potential for cost growth in CPIF contracts
- Long contract duration increases risk of requirement changes
- Single award may limit future competition
Tags
defense, department-of-the-navy, viasat-inc, communications-equipment, delivery-order, full-and-open-competition, cost-plus-incentive-fee, california, upgrade, tactical-communications
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $42.6 million to VIASAT INC. MIDS LVT BLOCK UPGRADE 2 (BU2)
Who is the contractor on this award?
The obligated recipient is VIASAT INC.
Which agency awarded this contract?
Awarding agency: Department of Defense (Department of the Navy).
What is the total obligated amount?
The obligated amount is $42.6 million.
What is the period of performance?
Start: 2013-11-04. End: 2019-12-31.
What is the historical spending pattern for MIDS LVT upgrades by the Department of the Navy?
Historical spending on MIDS LVT upgrades by the Department of the Navy indicates a consistent investment in maintaining and enhancing this critical communication capability. While specific figures for past upgrades are not detailed here, the recurring nature of such procurements suggests a multi-year strategy to keep the system current with evolving threats and technological advancements. The $42.6 million awarded for the Block Upgrade 2 represents a significant, but not unprecedented, investment in this platform. Analysis of prior contract awards for similar upgrades would reveal trends in cost, duration, and contractor selection, providing context for the current award's value and scope. This ongoing investment underscores the system's strategic importance and the Navy's commitment to its lifecycle support.
How does Viasat Inc.'s performance on similar defense contracts compare?
Viasat Inc. has a substantial track record with the Department of Defense, including numerous contracts for communication systems, satellite services, and electronic warfare capabilities. Their performance on similar large-scale defense contracts has generally been assessed as good, though like many large contractors, they have experienced periods of both high praise and scrutiny. Specific performance metrics for past contracts, such as on-time delivery, adherence to budget, and technical success, would be necessary for a precise comparison. However, their selection for this significant upgrade suggests a favorable assessment of their capabilities and past performance by the Navy, indicating they met the necessary criteria for technical expertise, reliability, and program management required for such a critical system enhancement.
What are the primary risks associated with the MIDS LVT Block Upgrade 2 contract?
The primary risks associated with the MIDS LVT Block Upgrade 2 contract include technical challenges in integrating new functionalities, potential cost overruns due to the Cost Plus Incentive Fee (CPIF) structure if targets are missed, and schedule delays. Given the complexity of upgrading a fielded military system, unforeseen technical hurdles are always a possibility. Furthermore, the long duration of the contract (over 6 years) increases the risk of evolving requirements or technological obsolescence during its term. Dependence on a single contractor for a critical upgrade also poses a long-term risk regarding sustainment and future competitive pricing. Effective risk mitigation strategies by both the contractor and the government are crucial for successful program execution.
What is the strategic importance of the MIDS LVT system for naval operations?
The MIDS LVT system is strategically vital for naval operations as it provides secure, jam-resistant, and high-volume data communications essential for modern warfare. It enables real-time situational awareness by facilitating the exchange of tactical data among various platforms, including aircraft, ships, and ground units. This interoperability is crucial for coordinated operations, target identification, and threat assessment. The Block Upgrade 2 specifically aims to enhance these capabilities, ensuring that naval forces can maintain a decisive information advantage in contested environments. Its reliability and performance directly impact mission success and the safety of personnel, making continuous upgrades a necessity.
How does the $42.6M contract value compare to the overall MIDS LVT program budget?
The $42.6 million contract value for the MIDS LVT Block Upgrade 2 represents a specific investment within the broader lifecycle of the MIDS LVT program. Without access to the total program budget or historical spending across all MIDS LVT contracts, it is difficult to provide a precise comparative analysis. However, this figure likely covers the development, integration, testing, and initial fielding of the Block Upgrade 2 capabilities. The MIDS LVT program itself is a significant, long-term initiative involving numerous upgrades and sustainment efforts over many years. Therefore, this contract value should be viewed as a substantial component of the overall program's financial commitment, reflecting the complexity and importance of the upgrade.
Industry Classification
NAICS: Manufacturing › Communications Equipment Manufacturing › Other 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
Solicitation ID: N0003910R0011
Offers Received: 1
Pricing Type: COST PLUS INCENTIVE FEE (V)
Evaluated Preference: NONE
Contractor Details
Address: 6155 EL CAMINO REAL, CARLSBAD, CA, 92009
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: $42,582,822
Exercised Options: $42,582,822
Current Obligation: $42,582,822
Contract Characteristics
Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED
Cost or Pricing Data: NO
Parent Contract
Parent Award PIID: N0003910D0032
IDV Type: IDC
Timeline
Start Date: 2013-11-04
Current End Date: 2019-12-31
Potential End Date: 2019-12-31 00:00:00
Last Modified: 2024-09-09
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