GSA's $27.2M contract for satellite telecommunications services awarded to SES Space & Defense, Inc. shows fair value

Contract Overview

Contract Amount: $27,245,580 ($27.2M)

Contractor: SES Space & Defense, Inc.

Awarding Agency: General Services Administration

Start Date: 2012-07-01

End Date: 2017-09-28

Contract Duration: 1,915 days

Daily Burn Rate: $14.2K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 3

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: DIA BANDWIDTH AND HNA SUPPORT SERVICES ASIA

Place of Performance

Location: COLORADO SPRINGS, EL PASO County, COLORADO, 80920

State: Colorado Government Spending

Plain-Language Summary

General Services Administration obligated $27.2 million to SES SPACE & DEFENSE, INC. for work described as: DIA BANDWIDTH AND HNA SUPPORT SERVICES ASIA Key points: 1. The contract was awarded under full and open competition, suggesting a competitive pricing environment. 2. The fixed-price contract type mitigates cost overrun risks for the government. 3. The duration of the contract (over 5 years) indicates a need for sustained service delivery. 4. The award to a single contractor suggests specialized capabilities were sought. 5. The contract falls under the satellite telecommunications sector, crucial for global connectivity. 6. The value of the contract is moderate within the context of large federal IT procurements.

Value Assessment

Rating: good

The contract's value of approximately $27.2 million over its 5-year term appears reasonable for satellite telecommunications services. Benchmarking against similar large-scale satellite bandwidth contracts, this pricing seems competitive. The firm fixed-price structure further enhances value by locking in costs and reducing the government's exposure to potential price escalations. The number of bids received (3) also suggests a healthy level of interest and potential for competitive pricing.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded using full and open competition, indicating that all responsible sources were permitted to submit bids. Three bids were received, which suggests a moderate level of competition for this specialized service. While three bidders is not exceptionally high, it does provide a basis for price comparison and ensures that the award was made to a qualified contractor.

Taxpayer Impact: Full and open competition generally benefits taxpayers by fostering a competitive environment that can lead to lower prices and better service quality. The presence of multiple bidders helps ensure that the government is not overpaying for the required services.

Public Impact

The primary beneficiaries are likely government agencies requiring reliable and secure satellite communication capabilities, particularly in regions where terrestrial infrastructure may be limited or unavailable. The services delivered include bandwidth and High-Capacity Network Access (HNA) support, essential for data transmission, command and control, and intelligence gathering. The geographic impact is global, as satellite telecommunications transcend physical borders, supporting operations worldwide. Workforce implications are indirect, primarily supporting the contractor's operations and potentially specialized technical roles within government oversight.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for vendor lock-in if switching providers is complex or costly.
Reliance on a single provider for critical communication infrastructure could pose a risk if the provider experiences service disruptions.

Positive Signals

Awarded through full and open competition, indicating a fair process.
Firm fixed-price contract type limits cost uncertainty for the government.
Contract duration suggests a stable, long-term need for these services.

Sector Analysis

This contract falls within the broader Information Technology (IT) sector, specifically the satellite telecommunications sub-sector. This market is characterized by high infrastructure costs, technological innovation, and a relatively small number of major global providers. Federal spending in this area supports critical national security, intelligence, and global operational needs. Comparable spending benchmarks would involve other large-scale satellite bandwidth and network services contracts awarded by various government agencies.

Small Business Impact

This contract does not appear to have a small business set-aside component, as indicated by 'sb': false. The prime contractor, SES Space & Defense, Inc., is a large entity. There is no explicit information provided regarding subcontracting plans for small businesses. Therefore, the direct impact on the small business ecosystem from this specific contract is likely minimal, though large prime contractors may engage small businesses for ancillary support services.

Oversight & Accountability

Oversight for this contract would primarily reside with the General Services Administration (GSA), specifically the Federal Acquisition Service. The firm fixed-price nature of the contract simplifies oversight by focusing on performance and delivery rather than cost verification. Accountability is ensured through contract terms and performance metrics. Transparency is facilitated by the public nature of federal contract awards, though specific operational details may remain classified or proprietary.

Related Government Programs

GSA Schedule IT-70
Defense Information Systems Agency (DISA) Global Communications Services
National Reconnaissance Office (NRO) Satellite Services
Intelligence Community Information Technology Enterprise (IC ITE)

Risk Flags

Potential for vendor lock-in
Reliance on single provider for critical infrastructure
Technological obsolescence risk

Frequently Asked Questions

What is this federal contract paying for?

General Services Administration awarded $27.2 million to SES SPACE & DEFENSE, INC.. DIA BANDWIDTH AND HNA SUPPORT SERVICES ASIA

Who is the contractor on this award?

The obligated recipient is SES SPACE & DEFENSE, INC..

Which agency awarded this contract?

Awarding agency: General Services Administration (Federal Acquisition Service).

What is the total obligated amount?

The obligated amount is $27.2 million.

What is the period of performance?

Start: 2012-07-01. End: 2017-09-28.

What is the track record of SES Space & Defense, Inc. in fulfilling federal contracts, particularly for satellite telecommunications?

SES Space & Defense, Inc. has a significant history of serving the U.S. government, including various intelligence and defense agencies. Their experience spans decades, providing a wide range of satellite-based communication solutions. Federal contract databases show numerous awards to SES for services including bandwidth, secure communications, and network support. While specific performance metrics for individual contracts are often not public, their continued success in winning competitive bids and securing sole-source awards for specialized needs suggests a generally positive track record. However, a deeper dive into past performance reviews and any documented issues on prior contracts would be necessary for a comprehensive assessment.

How does the pricing of this $27.2 million contract compare to similar satellite telecommunications services procured by the federal government?

Benchmarking this $27.2 million contract requires comparing it against similar satellite bandwidth and network access services procured by agencies like DISA or the NRO. Given the firm fixed-price nature and the 5-year duration, the average annual cost is approximately $5.44 million. This figure needs to be contextualized by the specific bandwidth, latency, geographic coverage, and security requirements. Without detailed technical specifications, a precise comparison is difficult. However, for large-scale, global satellite communication solutions supporting critical government operations, this price point appears within a reasonable range, especially considering the competitive award process. Prices for satellite services can vary significantly based on technology (e.g., GEO vs. MEO vs. LEO), data rates, and service level agreements.

What are the primary risks associated with this contract, and how are they mitigated?

The primary risks associated with this satellite telecommunications contract include potential service disruptions from the provider, technological obsolescence, and the possibility of the government becoming locked into a specific technology or vendor. Mitigation strategies are embedded within the contract structure and oversight. The firm fixed-price nature helps mitigate financial risks related to cost overruns. The contract's duration, while providing stability, also necessitates careful monitoring for technological advancements. The government's ability to potentially seek alternative solutions at the end of the contract term, coupled with GSA's oversight, serves as a check. Furthermore, the initial competitive bidding process likely vetted the contractor's technical capabilities and reliability.

What is the historical spending pattern for satellite telecommunications services by the General Services Administration (GSA)?

GSA's historical spending on satellite telecommunications services, particularly through its Federal Acquisition Service (FAS), has been substantial and varied. GSA often procures these services through large, multi-year contracts, including those awarded via competitive processes like the one for SES Space & Defense. Spending patterns are influenced by evolving technology (e.g., the rise of commercial satellite constellations), increasing data demands from agencies, and national security requirements. GSA's role is often to provide centralized procurement vehicles that offer competitive pricing and streamlined acquisition for agencies. Analyzing GSA's spending over the past decade would reveal trends in contract values, types of services procured (e.g., dedicated bandwidth, managed networks), and the shift towards more flexible and high-throughput satellite solutions.

How does the 'delivery order' (aw: DELIVERY ORDER) contract type impact the flexibility and management of this contract?

The 'delivery order' (DO) contract type, often used under indefinite-delivery, indefinite-quantity (IDIQ) vehicles or multiple-award contracts, allows the government to issue specific orders for services or products against a pre-negotiated contract. In this case, it implies that the $27.2 million represents the total potential value or ceiling, and specific orders for bandwidth and HNA support were placed as needed over the contract period. This provides flexibility for the government to adjust the quantity and timing of services based on evolving requirements. For the contractor, it offers a degree of guaranteed business within the contract's scope. Management involves tracking individual orders against the overall ceiling and ensuring timely delivery and performance for each order.

Industry Classification

NAICS: Information › Satellite Telecommunications › Satellite Telecommunications

Product/Service Code: IT AND TELECOM - INFORMATION TECHNOLOGY AND TELECOMMUNICATIONS › ADP AND TELECOMMUNICATIONS

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Solicitation ID: ID09120006

Offers Received: 3

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: SES SA (UEI: 400971339)

Address: 11790 SUNRISE VALLEY DR STE 300, RESTON, VA, 20191

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $27,245,580

Exercised Options: $27,245,580

Current Obligation: $27,245,580

Contract Characteristics

Commercial Item: COMMERCIAL ITEM

Parent Contract

Parent Award PIID: GS35F0328V

IDV Type: FSS

Timeline