DoD awards Viasat Inc. $175.7M for Airborne Communications Equipment, raising concerns about competition and value

Contract Overview

Contract Amount: $175,724,780 ($175.7M)

Contractor: Viasat Inc

Awarding Agency: Department of Defense

Start Date: 2004-12-23

End Date: 2012-09-30

Contract Duration: 2,838 days

Daily Burn Rate: $61.9K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: COST PLUS INCENTIVE FEE

Sector: Defense

Official Description: 200503!051059!1700!N00039!SPACE AND NAVAL WARFARE SYSTEMS !N0003900D2101 !A!N! !N!0040 ! !20041223!20070930!175096619!175096619!175096619!N!VIASAT, INC !6155 EL CAMINO REAL !CARLSBAD !CA!92009!66000!073!06!SAN DIEGO !SAN DIEGO !CALIFORNIA!+000011000000!N!N!000000000000!5821!RADIO AND TV COMM EQUIPMENT, AIRBORNE !A7 !ELECTRONICS AND COMMUNICATION EQUIP !554 !MIDS-LVT !334290!E! !5!B!S! ! ! !20200930!B! ! !A! !D!N!V!1!001!N!1G!Z!N!Z! ! !N!B!N!N! ! !A! !A!A!000!A!B!N! ! ! ! !1739!N00039!0001! !

Place of Performance

Location: CARLSBAD, SAN DIEGO County, CALIFORNIA, 92009, UNITED STATES OF AMERICA

State: California Government Spending

Plain-Language Summary

Department of Defense obligated $175.7 million to VIASAT INC for work described as: 200503!051059!1700!N00039!SPACE AND NAVAL WARFARE SYSTEMS !N0003900D2101 !A!N! !N!0040 ! !20041223!20070930!175096619!175096619!175096619!N!VIASAT, INC !6155 EL CAMINO REAL !CARLSBAD !CA!92009!66000!073!06!SAN DIEGO !SAN … Key points: 1. Contract awarded to Viasat Inc. for $175.7 million. 2. Product Service Code (PSC) 5821 indicates Radio and TV Comm Equipment, Airborne. 3. Contracting agency is Department of Defense (DoD). 4. Contract type is Cost Plus Incentive Fee. 5. Concerns exist regarding the competitive nature and overall value of this award.

Value Assessment

Rating: questionable

The contract value of $175.7 million for airborne communications equipment appears high, especially given the 'NOT COMPETED' status. Benchmarking against similar contracts is difficult without more detailed cost breakdowns, but the lack of competition suggests potential overpricing.

Cost Per Unit: N/A

Competition Analysis

Competition Level: limited

The contract was not competed, indicating a limited source selection. This significantly impacts price discovery, as there was no competitive pressure to drive down costs. The sole source nature raises questions about whether the government obtained the best possible price.

Taxpayer Impact: The lack of competition suggests taxpayers may have paid more than necessary for this equipment, as the government did not leverage market forces to secure a lower price.

Public Impact

Military readiness may be impacted if the equipment is critical and the pricing is inflated. Taxpayer funds are being utilized, and the lack of competition raises concerns about fiscal responsibility. The defense sector's reliance on specific vendors can lead to higher costs and reduced innovation. Transparency in defense contracting is crucial for public trust and accountability.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition
Cost Plus Incentive Fee contract type can lead to cost overruns
High contract value without clear justification
Limited transparency in pricing

Positive Signals

Award to a known entity (Viasat Inc.)
Contract supports defense capabilities

Sector Analysis

This contract falls within the Defense sector, specifically related to electronics and communication equipment. Spending in this area is substantial, and competitive bidding is typically expected to ensure value for money. The $175.7 million award is significant for this sub-sector.

Small Business Impact

There is no indication that small businesses were involved in this contract, either as prime contractors or subcontractors. The award to a single, likely large, entity like Viasat Inc. suggests a lack of opportunity for small business participation.

Oversight & Accountability

The 'NOT COMPETED' status warrants further oversight to ensure the justification for sole-sourcing was valid and that the pricing is reasonable. Accountability for ensuring fair and competitive pricing is paramount, even in limited competition scenarios.

Related Government Programs

Other Communications Equipment Manufacturing
Department of Defense Contracting
Defense Contract Management Agency Programs

Risk Flags

Lack of competitive bidding
Potential for inflated pricing due to sole-source award
Cost Plus Incentive Fee structure risks cost overruns
Limited transparency on justification for sole-sourcing
No clear indication of small business participation

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $175.7 million to VIASAT INC. 200503!051059!1700!N00039!SPACE AND NAVAL WARFARE SYSTEMS !N0003900D2101 !A!N! !N!0040 ! !20041223!20070930!175096619!175096619!175096619!N!VIASAT, INC !6155 EL CAMINO REAL !CARLSBAD !CA!92009!66000!073!06!SAN DIEGO !SAN DIEGO !CALIFORNIA!+000011000000!N!N!000000000000!5821!RADIO AND TV COMM EQUIPMENT, AIRBORNE !A7 !ELECTRONICS AND COMMUNICATION EQUIP !554 !MIDS-LVT !334290!E! !5!B!S! ! ! !202

Who is the contractor on this award?

The obligated recipient is VIASAT INC.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $175.7 million.

What is the period of performance?

Start: 2004-12-23. End: 2012-09-30.

What was the specific justification for not competing this contract, and was a thorough market research conducted to confirm Viasat Inc. as the only viable source?

The justification for not competing this contract is not provided in the data. Typically, sole-source awards require extensive market research to prove that only one responsible source can provide the required supplies or services. Without this documentation, it's difficult to assess if the government adequately explored competitive options or if the lack of competition was a procedural shortcut.

How does the Cost Plus Incentive Fee (CPIF) structure potentially impact the final cost to taxpayers, given the lack of competition?

A CPIF contract incentivizes both the contractor and the government to control costs. However, without competition, the baseline cost and target profit are set without market validation. This means Viasat Inc. might have less pressure to minimize costs, and the incentive fee could be based on an inflated initial estimate, potentially leading to higher final costs for taxpayers than if the contract had been competitively bid.

What is the expected operational lifespan and criticality of this airborne communications equipment, and how does that factor into the long-term value assessment of this $175.7 million award?

The provided data does not specify the operational lifespan or criticality of the airborne communications equipment. This information is crucial for a comprehensive value assessment. If the equipment is highly specialized, has a long service life, and is critical for national security, the $175.7 million might be justifiable. However, without this context, the high cost and lack of competition raise significant concerns about long-term value and potential overspending.

Industry Classification

NAICS: Manufacturing › Communications Equipment Manufacturing › Other Communications Equipment Manufacturing

Product/Service Code: COMM/DETECT/COHERENT RADIATION

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

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, Not Designated a Small Business

Parent Contract

Parent Award PIID: N0003900D2101

IDV Type: IDC

Timeline