DoD's $41.9M KU-Band Space Segment contract awarded to BUSHTEX INC shows strong competition

Contract Overview

Contract Amount: $41,924,570 ($41.9M)

Contractor: Bushtex Inc

Awarding Agency: Department of Defense

Start Date: 2013-07-01

End Date: 2018-07-31

Contract Duration: 1,856 days

Daily Burn Rate: $22.6K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 6

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: IGF::OT::IGF KU-BAND SPACE SEGMENT

Place of Performance

Location: GILBERT, MARICOPA County, ARIZONA, 85295

State: Arizona Government Spending

Plain-Language Summary

Department of Defense obligated $41.9 million to BUSHTEX INC for work described as: IGF::OT::IGF KU-BAND SPACE SEGMENT Key points: 1. The contract demonstrates a competitive procurement process with multiple bidders. 2. Pricing appears reasonable given the specialized nature of satellite communication services. 3. Performance duration of over five years suggests a stable, long-term requirement. 4. The award falls within the Defense Information Systems Agency's IT and communication spending. 5. No specific small business set-aside was utilized, indicating a focus on prime contractor capability. 6. The firm-fixed-price structure helps manage cost certainty for the government.

Value Assessment

Rating: good

The contract's value of approximately $41.9 million over five years for KU-band space segment services appears reasonable when benchmarked against similar government procurements for satellite communications. While specific per-unit cost data is not provided, the firm-fixed-price nature of the award suggests that the government secured predictable costs. The competition level also supports the likelihood of a fair market price being achieved. Further analysis would require detailed service level agreements and comparison to commercial satellite service rates.

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. The presence of six bidders (no) suggests a healthy level of interest and competition for this specialized service. A competitive environment like this typically drives down prices and encourages innovation as contractors vie for the award. The number of bidders provides a good basis for price discovery and ensures the government receives competitive offers.

Taxpayer Impact: The robust competition for this contract is beneficial for taxpayers, as it likely resulted in a more favorable price than a sole-source or limited competition award. It ensures that taxpayer funds are used efficiently by leveraging market forces to obtain the best value.

Public Impact

The Department of Defense benefits from reliable KU-band space segment services, crucial for command and control, intelligence, and operational communications. This contract supports the continuity and enhancement of secure communication networks for military operations. The geographic impact is likely global, supporting deployed forces and strategic assets worldwide. While not directly creating new jobs, it sustains employment within the aerospace and defense communication sector.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for vendor lock-in if follow-on contracts are not competitively procured.
Dependence on a single vendor for critical space segment infrastructure could pose a risk.
Ensuring continued compliance with evolving cybersecurity standards for space assets.

Positive Signals

Awarded through full and open competition, indicating a competitive market.
Firm-fixed-price contract type provides cost certainty.
Long-term contract duration suggests a stable and predictable requirement.
Award to an established entity implies a degree of reliability.

Sector Analysis

The KU-band space segment market is a critical component of the global satellite communications industry, supporting a wide range of applications from broadcasting to military operations. This contract fits within the broader defense communications sector, where reliable and secure satellite bandwidth is essential for maintaining operational readiness. Spending in this area is driven by the need for resilient communication capabilities that can operate independently of terrestrial infrastructure. Comparable spending benchmarks would involve analyzing other government contracts for satellite bandwidth and related ground support services.

Small Business Impact

The contract data indicates that this was not a small business set-aside, and there is no explicit mention of subcontracting goals for small businesses. This suggests that the primary focus was on securing the most capable prime contractor for this specialized service. While this may limit direct opportunities for small businesses as prime contractors on this specific award, it does not preclude them from participating as subcontractors if the prime contractor chooses to engage them. Further investigation into subcontracting plans would be needed to fully assess the impact on the small business ecosystem.

Oversight & Accountability

Oversight for this contract would typically fall under the purview of the Department of Defense's contracting officers and the Defense Contract Management Agency (DCMA). The Defense Information Systems Agency (DISA) would also maintain program-level oversight. Transparency is generally maintained through contract award databases and reporting requirements. Inspector General jurisdiction would apply in cases of suspected fraud, waste, or abuse related to the contract.

Related Government Programs

DoD Satellite Communications Services
Defense Information Systems Network (DISN)
Global Positioning System (GPS) Support
Military Satellite Communications Systems (MILSATCOM)

Risk Flags

Potential for vendor lock-in
Cybersecurity vulnerabilities in space assets
Dependence on specific satellite constellations
Long-term sustainment and upgrade challenges

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $41.9 million to BUSHTEX INC. IGF::OT::IGF KU-BAND SPACE SEGMENT

Who is the contractor on this award?

The obligated recipient is BUSHTEX INC.

Which agency awarded this contract?

Awarding agency: Department of Defense (Defense Information Systems Agency).

What is the total obligated amount?

The obligated amount is $41.9 million.

What is the period of performance?

Start: 2013-07-01. End: 2018-07-31.

What is the track record of BUSHTEX INC in delivering similar KU-band space segment services to the government?

Information regarding BUSHTEX INC's specific track record for delivering KU-band space segment services is not detailed in the provided data. However, the award of a significant contract by the Department of Defense suggests a level of capability and past performance that met the agency's requirements. To fully assess their track record, one would need to review past performance evaluations, any prior contracts for similar services, and potentially any documented issues or successes. Government contract databases and past performance information repositories would be the primary sources for this detailed assessment. Without this specific data, we rely on the agency's due diligence during the procurement process as an indicator of capability.

How does the awarded price compare to market rates for similar KU-band satellite services?

The provided data does not include specific pricing details beyond the total contract value of $41.9 million over approximately five years. Therefore, a direct comparison to current market rates for similar KU-band satellite services is not possible without more granular information, such as bandwidth, service level agreements, and geographic coverage. Generally, firm-fixed-price contracts awarded under full and open competition are expected to align with market competitiveness. However, specialized government requirements, security protocols, and guaranteed availability can command premium pricing compared to commercial offerings. Benchmarking would require accessing commercial satellite provider rate cards and analyzing other government contracts with similar service parameters.

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

Key risks associated with this KU-band space segment contract include potential service disruptions due to satellite or ground segment issues, cybersecurity threats, and the risk of cost overruns if the firm-fixed-price structure is not adequately managed. Mitigation strategies likely involve robust service level agreements with penalties for non-performance, stringent cybersecurity requirements mandated by the DoD, and continuous monitoring by the Defense Information Systems Agency (DISA). The long-term nature of the contract also implies a need for managing technological obsolescence and ensuring the contractor maintains necessary certifications and operational readiness throughout the performance period. The competitive award process itself helps mitigate risks by selecting a vendor deemed capable and reliable.

How effective has the Defense Information Systems Agency (DISA) been in managing similar satellite communication contracts?

Assessing the overall effectiveness of DISA in managing similar satellite communication contracts requires a broad review of their procurement history, program outcomes, and stakeholder feedback, which is beyond the scope of the provided data. However, DISA is a primary agency responsible for providing IT and communications services to the DoD, implying significant experience and established processes for managing complex contracts like this one. Their role suggests a focus on ensuring mission-critical communications are reliable and secure. Performance metrics, audit reports from the IG, and user satisfaction surveys would be necessary to provide a detailed effectiveness analysis of DISA's contract management in this domain.

What has been the historical spending trend for KU-band space segment services by the Department of Defense?

The provided data only pertains to a single contract award. To understand historical spending trends for KU-band space segment services by the Department of Defense, one would need to analyze aggregated spending data over multiple fiscal years. This would involve querying federal procurement databases for contracts categorized under relevant Product Service Codes (PSCs) and keywords related to satellite communications, specifically KU-band. Trends would likely reflect evolving military operational needs, technological advancements in satellite technology, and shifts in defense strategy, potentially showing increases in demand for resilient and global communication capabilities.

What is the strategic importance of this KU-band space segment contract to the Department of Defense's overall mission?

This KU-band space segment contract is strategically vital for the Department of Defense as it ensures access to reliable, high-bandwidth communication capabilities essential for global military operations. KU-band frequencies are widely used for command and control, intelligence, surveillance, and reconnaissance (ISR) data transmission, and tactical communications. In environments where terrestrial infrastructure may be damaged or unavailable, satellite communications provide a critical lifeline. The continuity of these services, facilitated by this contract, directly supports force projection, situational awareness, and the ability to conduct operations effectively across diverse geographic locations, underpinning national security objectives.

Industry Classification

NAICS: Real Estate and Rental and Leasing › Commercial and Industrial Machinery and Equipment Rental and Leasing › Office Machinery and Equipment Rental and Leasing

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

Offers Received: 6

Pricing Type: FIRM FIXED PRICE (J)

Contractor Details

Address: 723 W GUADALUPE RD, GILBERT, AZ, 85234

Business Categories: Asian Pacific American Owned Business, Category Business, Minority Owned Business, Small Business, Special Designations, U.S.-Owned Business, Woman Owned Business

Financial Breakdown

Contract Ceiling: $41,924,570

Exercised Options: $41,924,570

Current Obligation: $41,924,570

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Parent Contract

Parent Award PIID: GS35F0546R

IDV Type: FSS

Timeline