DoD's $84M satellite telecommunications contract awarded to Viasat Inc. lacked competition

Contract Overview

Contract Amount: $84,032,883 ($84.0M)

Contractor: Viasat Inc

Awarding Agency: Department of Defense

Start Date: 2016-06-01

End Date: 2018-08-31

Contract Duration: 821 days

Daily Burn Rate: $102.4K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: IGF::OT::IGF SLC3S-A AMSS IIA

Place of Performance

Location: CARLSBAD, SAN DIEGO County, CALIFORNIA, 92009

State: California Government Spending

Plain-Language Summary

Department of Defense obligated $84.0 million to VIASAT INC for work described as: IGF::OT::IGF SLC3S-A AMSS IIA Key points: 1. The contract's value of $84 million over its period of performance suggests a significant investment in satellite telecommunications. 2. Awarded to a single vendor, the lack of competition raises questions about potential overpayment and limited market engagement. 3. The firm-fixed-price contract type indicates that the price was set at the time of award, potentially locking in costs regardless of actual expenses. 4. The contract's duration of 821 days (approximately 2.25 years) is a moderate length for a service contract of this nature. 5. The absence of small business set-asides or subcontracting requirements suggests a focus on large-scale prime contractor delivery. 6. The contract falls under the 'Satellite Telecommunications' category, a critical but often specialized area of defense spending.

Value Assessment

Rating: questionable

Benchmarking the value of this $84 million contract is challenging without specific service details or comparable contract data. However, the sole-source award to Viasat Inc. for satellite telecommunications services raises concerns about whether the government secured the best possible price. Typically, competitive bidding drives down costs and encourages innovation. The firm-fixed-price nature of the contract means the government is obligated to pay the agreed-upon price, regardless of Viasat's actual costs, which could lead to a less favorable value proposition if costs were lower than anticipated.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning only one vendor, Viasat Inc., was considered. The documentation does not indicate that a competitive process was attempted or that other vendors were solicited. This approach is typically used when a unique capability is required, or in situations where only one vendor can meet the specific needs. However, the lack of competition means there was no opportunity for price discovery through bidding, potentially leading to higher costs for the government.

Taxpayer Impact: Taxpayers may have paid a premium for these services due to the absence of competitive pressure. Without multiple bids, it's difficult to ascertain if the negotiated price truly reflects the market value.

Public Impact

The Department of Defense is the primary beneficiary, receiving satellite telecommunications services essential for its operations. This contract likely supports secure and reliable communication channels for military personnel and operations, potentially globally. The geographic impact is likely broad, given the nature of satellite communications, potentially enabling connectivity in remote or austere environments. Workforce implications are primarily within Viasat Inc., involving specialized personnel for satellite operations, network management, and technical support.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition may have resulted in a higher price than a competitively awarded contract.
Sole-source awards can limit opportunities for emerging or smaller businesses to enter the federal market.
Transparency into the justification for a sole-source award is crucial for public trust and accountability.

Positive Signals

Viasat Inc. is a known provider in the satellite telecommunications sector, suggesting a level of established capability.
The firm-fixed-price contract type provides cost certainty for the government, assuming the price was fair at the time of award.
The contract was awarded by the Defense Information Systems Agency (DISA), an agency focused on providing information technology and communications support to the DoD.

Sector Analysis

The satellite telecommunications sector is a critical component of modern communication infrastructure, particularly for government and defense applications where reliable connectivity in diverse locations is paramount. This market is characterized by high barriers to entry due to significant capital investment in satellite technology, launch services, and ground infrastructure. Spending in this sector often involves long-term contracts to ensure continuity of service. Comparable spending benchmarks are difficult to establish without specific service level agreements, but large government contracts for satellite bandwidth and services can range from tens to hundreds of millions of dollars annually.

Small Business Impact

This contract does not appear to have included any specific small business set-aside provisions, nor is there information suggesting subcontracting goals for small businesses. The sole-source nature of the award to a large prime contractor like Viasat Inc. typically means that opportunities for small businesses are limited to direct subcontracting if Viasat chooses to engage them. This approach does not actively foster the small business ecosystem within this particular contract's scope.

Oversight & Accountability

Oversight for this contract would primarily fall under the purview of the Department of Defense, specifically the contracting activity within the Defense Information Systems Agency (DISA). Accountability measures are inherent in the contract terms, particularly the firm-fixed-price structure which obligates Viasat to deliver specified services. Transparency is generally limited for sole-source awards, with justifications typically being internal or classified. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

Defense Information Technology Contracting Office (DITCO) contracts
Satellite Communications Services
DoD Enterprise IT Services
Global Communications Contracts

Risk Flags

Sole-source award
Lack of competition
Potential for overpayment

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $84.0 million to VIASAT INC. IGF::OT::IGF SLC3S-A AMSS IIA

Who is the contractor on this award?

The obligated recipient is VIASAT 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 $84.0 million.

What is the period of performance?

Start: 2016-06-01. End: 2018-08-31.

What specific satellite telecommunications services were provided under this contract?

The provided data indicates the contract falls under the North American Industry Classification System (NAICS) code 517410, 'Satellite Telecommunications.' This generally encompasses services such as providing satellite-based voice and data communications, satellite bandwidth leasing, and potentially managed satellite network services. However, the specific details of the services rendered, such as the type of satellites used (e.g., geostationary, low-earth orbit), the bandwidth allocated, the geographic coverage areas, and the service level agreements (SLAs) for uptime and performance, are not detailed in the summary data. These specifics would be crucial for a comprehensive understanding of the contract's scope and value.

What was the justification for awarding this contract on a sole-source basis to Viasat Inc.?

The provided data explicitly states the contract was 'NOT COMPETED,' indicating a sole-source award. The specific justification for this sole-source determination is not included in the summary data. Typically, sole-source awards require a formal justification, such as the existence of only one responsible source capable of providing the required service (e.g., unique technology or capability), urgent and compelling needs where competition is not feasible, or specific national security requirements. Without access to the contract file or the official justification document, it is impossible to determine the precise rationale behind awarding this $84 million contract without competition.

How does the $84 million contract value compare to similar satellite telecommunications contracts awarded by the DoD?

Comparing the $84 million contract value to similar DoD satellite telecommunications contracts requires access to a broader dataset of federal procurement. However, $84 million over approximately 2.25 years (821 days) represents a significant but not extraordinary expenditure for specialized telecommunications services within the defense sector. Contracts for satellite bandwidth, managed services, and dedicated satellite capacity can vary widely based on factors like the number of satellites involved, the geographic reach, the required bandwidth, and the service level agreements. Given the sole-source nature, it's difficult to definitively state if this represents a competitive market price, but it falls within the expected range for substantial government satellite communication procurements.

What is Viasat Inc.'s track record with the Department of Defense for similar services?

Viasat Inc. is a well-established company in the satellite communications industry and has a history of contracting with the Department of Defense. While the summary data for this specific contract (ID: IGF::OT::IGF SLC3S-A AMSS IIA) does not detail Viasat's broader performance history, the company is known for providing high-capacity satellite broadband services, secure networking solutions, and other communication technologies to military and government clients. Their involvement in defense contracts suggests they possess the necessary security clearances, technical capabilities, and experience to meet DoD requirements. However, a full assessment would require reviewing performance reviews and past contract data for Viasat across multiple DoD procurements.

What are the potential risks associated with a sole-source award of this magnitude?

The primary risk associated with a sole-source award of this magnitude ($84 million) is the potential for paying a non-competitive price, meaning the government may not have achieved the best possible value for its expenditure. Without competition, there is less incentive for the contractor to offer the lowest possible price. Other risks include a lack of innovation that might be spurred by competitive pressures, and a reduced opportunity for the government to explore alternative solutions or technologies offered by other vendors. Furthermore, reliance on a single source can create vulnerabilities if that source experiences performance issues or financial instability.

Were there any performance metrics or oversight mechanisms specified in this contract?

The provided summary data indicates the contract type was 'FIRM FIXED PRICE' and the award was made by the 'Defense Information Systems Agency (DISA)'. While specific performance metrics and detailed oversight mechanisms are not listed in the summary, firm-fixed-price contracts generally obligate the contractor to deliver goods or services at an agreed-upon price. DISA, as the awarding agency, would typically have contracting officers and technical monitors responsible for overseeing contract performance, ensuring deliverables meet requirements, and managing payments. Standard government contract clauses related to performance standards, reporting requirements, and acceptance criteria would likely apply, even if not explicitly detailed in this abbreviated data.

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: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Solicitation ID: HC101316R0012

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

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: $84,032,883

Exercised Options: $84,032,883

Current Obligation: $84,032,883

Subaward Activity

Number of Subawards: 29

Total Subaward Amount: $3,686,214

Contract Characteristics

Commercial Item: COMMERCIAL ITEM

Cost or Pricing Data: NO

Timeline