DoD's $61.9M Viasat contract for communications equipment manufacturing awarded without competition

Contract Overview

Contract Amount: $61,934,716 ($61.9M)

Contractor: Viasat Inc

Awarding Agency: Department of Defense

Start Date: 2008-06-11

End Date: 2010-04-30

Contract Duration: 688 days

Daily Burn Rate: $90.0K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: DO 0066

Place of Performance

Location: CARLSBAD, SAN DIEGO County, CALIFORNIA, 92009

State: California Government Spending

Plain-Language Summary

Department of Defense obligated $61.9 million to VIASAT INC for work described as: DO 0066 Key points: 1. Contract awarded on a firm-fixed-price basis, indicating clear cost expectations. 2. The contract was not competed, raising questions about potential cost savings through competition. 3. The duration of 688 days suggests a significant, medium-term need for the equipment. 4. The award to Viasat Inc. represents a sole-source procurement in the Other Communications Equipment Manufacturing sector. 5. The contract's value of $61.9M positions it as a substantial investment in specialized equipment. 6. The absence of small business set-asides suggests the primary contractor is not a small business, and subcontracting opportunities may be limited.

Value Assessment

Rating: questionable

Benchmarking the value of this contract is challenging due to its sole-source nature and the specific nature of 'Other Communications Equipment Manufacturing.' Without competitive bids, it's difficult to ascertain if the $61.9 million price represents fair market value. However, the firm-fixed-price contract type suggests that the contractor assumed the risk for cost overruns, which can sometimes lead to higher initial pricing to account for that risk. Further analysis would require comparing the specific equipment and its capabilities to similar, potentially competed, procurements.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded under a sole-source justification, meaning it was not openly competed. The Department of Defense likely determined that only Viasat Inc. could provide the required equipment or services, possibly due to proprietary technology, unique capabilities, or existing system integration. The lack of competition means there were no other bidders to compare against, limiting the government's ability to leverage market forces for potentially better pricing or terms.

Taxpayer Impact: Taxpayers may have paid a premium for this equipment due to the absence of competitive bidding. Without competing the award, the government missed an opportunity to explore alternative solutions and potentially secure a lower price through a more open market.

Public Impact

The Department of Defense, specifically the Department of the Navy, is the primary beneficiary, receiving critical communications equipment. The services delivered involve the manufacturing and provision of specialized communications equipment. The geographic impact is primarily linked to the contractor's operations in California (st: CA) and the deployment of the equipment by the Navy. Workforce implications include jobs at Viasat Inc. and potentially its suppliers, particularly in California.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition may lead to higher costs for taxpayers.
Sole-source award limits transparency and potential for innovation from other vendors.
Specific details on the equipment's performance and necessity are not publicly detailed.
The contract's duration and value warrant scrutiny for long-term cost-effectiveness.

Positive Signals

Firm-fixed-price contract provides cost certainty for the government.
Award to an established contractor (Viasat Inc.) may indicate reliability and proven capability.
The contract addresses a specific need within the Department of the Navy's communications infrastructure.

Sector Analysis

The 'Other Communications Equipment Manufacturing' sector is broad and encompasses a wide range of specialized devices. This contract likely falls into a niche within this sector, possibly related to satellite communications or secure military-grade equipment, given Viasat's known expertise. The market for such specialized defense communications equipment is often characterized by high barriers to entry, proprietary technology, and a limited number of qualified suppliers, which can contribute to sole-source or limited-competition awards. Comparable spending benchmarks are difficult to establish without knowing the exact nature of the equipment.

Small Business Impact

The contract details indicate that small business participation (sb: false) was not a primary consideration or requirement for this award. As a sole-source contract, there was no formal small business set-aside process. This means that opportunities for small businesses to subcontract on this specific award are likely limited and dependent on Viasat Inc.'s own procurement decisions. The absence of a set-aside suggests that the primary focus was on acquiring specialized capabilities from a specific provider, rather than fostering small business engagement.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of Defense's contracting and financial management offices. Accountability measures are inherent in the firm-fixed-price structure, which holds the contractor responsible for delivering the specified equipment within the agreed-upon price. Transparency is limited due to the sole-source nature of the award. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected during the contract's performance or execution.

Related Government Programs

Department of Defense Communications Equipment Procurements
Viasat Inc. Government Contracts
Sole-Source Defense Contracts
Other Communications Equipment Manufacturing Contracts

Risk Flags

Sole-source award
Lack of competition
Potential for overpricing
Limited transparency

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $61.9 million to VIASAT INC. DO 0066

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 $61.9 million.

What is the period of performance?

Start: 2008-06-11. End: 2010-04-30.

What specific type of communications equipment was procured under this contract, and what are its intended military applications?

The provided data classifies this contract under NAICS code 334290, 'Other Communications Equipment Manufacturing.' While the exact nature of the equipment is not specified, Viasat Inc. is known for its expertise in satellite communication systems, including broadband services, secure networking solutions, and airborne communication systems. Given the Department of the Navy as the awarding agency, the equipment likely pertains to advanced, potentially mobile or airborne, communication systems designed for naval operations, which could include secure data transmission, command and control, or situational awareness capabilities in challenging operational environments. The $61.9 million value suggests a significant system or a substantial quantity of specialized components.

Why was this contract awarded on a sole-source basis instead of being competed?

Sole-source awards are typically justified when only one responsible source can provide the required supplies or services. For Viasat Inc., this could be due to proprietary technology, unique manufacturing capabilities, or the need for seamless integration with existing Viasat systems already in use by the Department of the Navy. The government may have determined that developing a competitive solicitation would be impractical, too costly, or would result in unacceptable delays in acquiring critical capabilities. Specific justifications for sole-source awards are usually documented and approved by appropriate authorities within the agency, often citing reasons like essential unique capabilities or the lack of viable alternatives.

How does the $61.9 million contract value compare to similar procurements for communications equipment by the DoD?

Direct comparison of the $61.9 million contract value is difficult without knowing the precise specifications of the 'Other Communications Equipment.' However, for large-scale, specialized defense communication systems, this value is within a typical range. For instance, procurements for satellite terminals, advanced networking hardware, or secure communication suites can easily reach tens of millions of dollars. The sole-source nature, however, prevents a direct value-for-money comparison against competitive bids. If this contract involved standard off-the-shelf equipment, $61.9 million might be considered high without competition. If it involves highly specialized, custom-developed, or proprietary technology, the price could be justified, but requires deeper technical and market analysis.

What is Viasat Inc.'s track record with the Department of Defense, particularly for similar types of contracts?

Viasat Inc. has a significant and established track record of contracting with the Department of Defense and other federal agencies. They are a major provider of satellite broadband services, secure networking, and communication systems for military applications. Their history includes numerous contracts for airborne satellite terminals, secure data links, and global communication networks for various branches of the U.S. military. This specific contract, awarded in 2008, aligns with Viasat's core competencies in providing advanced communication solutions. Their long-standing relationship with the DoD suggests a level of trust and proven performance, although the sole-source nature of this particular award warrants scrutiny regarding cost and competition.

What are the potential risks associated with awarding a contract of this magnitude on a sole-source basis?

The primary risks associated with sole-source awards of this magnitude include potential overpayment due to the lack of competitive pressure, reduced incentive for the contractor to innovate or offer cost efficiencies beyond what is contractually required, and a lack of transparency in the procurement process. Taxpayers may not receive the best possible value. There's also a risk that the government becomes overly reliant on a single vendor for critical capabilities, potentially limiting future flexibility or access to alternative technologies. Furthermore, without competition, it can be harder to objectively assess if the chosen solution is truly the most effective or cost-efficient available on the market.

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: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 6155 EL CAMINO REAL, CARLSBAD, CA, 49

Business Categories: Category Business, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $61,934,716

Exercised Options: $61,934,716

Current Obligation: $61,934,716

Contract Characteristics

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: N0003900D2101

IDV Type: IDC

Timeline