DoD's $23.3M satellite telecommunications contract awarded to SES Space & Defense, Inc. shows fair value

Contract Overview

Contract Amount: $23,290,249 ($23.3M)

Contractor: SES Space & Defense, Inc.

Awarding Agency: Department of Defense

Start Date: 2016-08-23

End Date: 2021-08-31

Contract Duration: 1,834 days

Daily Burn Rate: $12.7K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: IGF::OT::IGF KU BAND

Place of Performance

Location: RESTON, FAIRFAX County, VIRGINIA, 20191

State: Virginia Government Spending

Plain-Language Summary

Department of Defense obligated $23.3 million to SES SPACE & DEFENSE, INC. for work described as: IGF::OT::IGF KU BAND Key points: 1. The contract's value appears reasonable when benchmarked against similar satellite communication services. 2. Full and open competition was utilized, suggesting a competitive pricing environment. 3. The contract duration of 1834 days (approx. 5 years) is typical for this type of service. 4. Performance was rated 'satisfactory' (ST), indicating acceptable service delivery. 5. The contract falls within the Defense Information Systems Agency's broader IT and telecommunications portfolio. 6. No small business set-aside was applied, but subcontracting opportunities may exist.

Value Assessment

Rating: fair

The total award amount of $23.3 million for satellite telecommunications services over approximately five years appears to be within a reasonable range for government contracts of this nature. Benchmarking against similar contracts for satellite bandwidth and connectivity suggests that the pricing was competitive. While specific cost breakdowns are not available, the firm-fixed-price structure generally provides cost certainty for the government. The 'satisfactory' performance rating further supports the assessment of fair value.

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 offers. The presence of two bidders suggests a moderate level of competition. While more bidders could potentially drive prices lower, two offers are sufficient to establish a competitive baseline and ensure that the government receives a reasonable price.

Taxpayer Impact: Full and open competition generally benefits taxpayers by fostering a competitive environment that can lead to more cost-effective solutions and better pricing.

Public Impact

The Department of Defense is the primary beneficiary, receiving essential satellite telecommunications services. Services delivered include satellite bandwidth and connectivity, crucial for military operations and communications. The geographic impact is global, as satellite services transcend terrestrial limitations. Workforce implications are likely within the contractor's organization and potentially supporting industries.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for vendor lock-in if future needs are highly specialized and only SES can provide.
Reliance on satellite technology can be subject to orbital congestion or interference.
Long-term contract duration may not always capture the most innovative or cost-effective emerging technologies.

Positive Signals

Award to an established provider with experience in government satellite communications.
Firm-fixed-price contract provides budget certainty.
Satisfactory performance rating indicates reliable service delivery.
Full and open competition suggests a competitive award process.

Sector Analysis

This contract falls within the broader telecommunications sector, specifically focusing on satellite services. The market for government satellite communications is robust, driven by defense, intelligence, and civilian agency needs for global connectivity. Spending in this area is significant, with numerous providers competing for contracts. This award to SES Space & Defense, Inc. represents a typical procurement for essential satellite bandwidth and related services.

Small Business Impact

The contract was not set aside for small businesses, and there is no explicit indication of small business subcontracting goals. This suggests that the primary award went to a large business. While this may limit direct opportunities for small businesses on this specific contract, it does not preclude them from participating in the broader satellite communications market or potentially subcontracting with SES if opportunities arise.

Oversight & Accountability

The Defense Information Systems Agency (DISA) likely has internal oversight mechanisms for this contract, including contract officers and technical representatives who monitor performance and ensure compliance. The firm-fixed-price nature of the contract provides a degree of financial oversight. Transparency is generally maintained through contract award databases, though detailed performance metrics may be internal. The Inspector General's office could investigate any reported issues of fraud, waste, or abuse.

Related Government Programs

Defense Information Systems Agency (DISA) Satellite Services
DoD Global Satellite Communications Services
Military Satellite Communications Systems
Satellite Bandwidth Procurement

Risk Flags

Performance Risk
Technological Obsolescence Risk
Geopolitical Risk
Contractor Viability Risk

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $23.3 million to SES SPACE & DEFENSE, INC.. IGF::OT::IGF KU BAND

Who is the contractor on this award?

The obligated recipient is SES SPACE & DEFENSE, 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 $23.3 million.

What is the period of performance?

Start: 2016-08-23. End: 2021-08-31.

What is the track record of SES Space & Defense, Inc. with the Department of Defense?

SES Space & Defense, Inc. has a significant history of providing satellite communications services to the U.S. government, including the Department of Defense. They are a major player in the satellite industry, offering a wide range of solutions from geostationary (GEO) and medium Earth orbit (MEO) satellites. Their experience includes supporting various military and government missions requiring reliable, high-bandwidth connectivity across the globe. Past performance ratings and contract awards from agencies like DISA, the U.S. Air Force, and others demonstrate their established presence and capability in meeting demanding government requirements. This specific contract's 'satisfactory' performance rating aligns with their general track record of delivering essential services.

How does the pricing of this contract compare to similar satellite telecommunications procurements?

Benchmarking the $23.3 million award over approximately five years suggests fair value. While precise per-gigahertz-per-month or per-terabyte pricing is not publicly detailed, the total cost is consistent with government contracts for dedicated satellite capacity and managed services. Factors influencing price include the specific satellite orbital slot, bandwidth allocation, service level agreements (SLAs), and geographic coverage required. Given that this was awarded under full and open competition with two bidders, the price likely reflects competitive market rates for the specified service parameters. Without access to detailed cost proposals or a wider range of comparable contracts with identical specifications, a definitive statement on whether it's 'excellent' or 'good' value is difficult, but 'fair' is a reasonable assessment.

What are the primary risks associated with this satellite telecommunications contract?

Key risks include potential service disruptions due to satellite malfunction, atmospheric conditions (like heavy rain fade), or orbital debris. There's also a risk of technological obsolescence if newer, more efficient satellite constellations emerge rapidly. Geopolitical factors could impact satellite operations or ground station access in certain regions. Furthermore, reliance on a single provider, even with competition at award, can pose a risk if the contractor faces financial instability or strategic shifts. Ensuring continuous connectivity and meeting evolving bandwidth demands for critical military operations are paramount concerns that require robust contingency planning and performance monitoring.

How effective has this contract been in meeting the DoD's satellite communication needs?

The contract was rated 'satisfactory' (ST), which indicates that SES Space & Defense, Inc. met the essential requirements of the contract. This suggests a level of effectiveness in delivering the contracted satellite telecommunications services. 'Satisfactory' performance implies that the services were generally adequate and met the defined technical and operational standards. However, it does not necessarily indicate exceptional performance or exceeding expectations. The effectiveness is tied to the reliability and availability of the satellite links provided, which are crucial for supporting DoD's global command and control, intelligence, surveillance, and reconnaissance (ISR) missions.

What are the historical spending patterns for satellite telecommunications by the Defense Information Systems Agency?

DISA has consistently been a major procurer of satellite telecommunications services, reflecting the DoD's reliance on space-based assets for global operations. Historical spending patterns show significant annual investments in various satellite communication programs, including protected communications, wideband services, and tactical satellite links. DISA manages a portfolio of contracts that support different orbits (GEO, MEO, LEO) and frequencies, catering to diverse mission requirements. Spending fluctuates based on evolving military needs, technological advancements (e.g., transition to higher throughput satellites), and strategic priorities. The total spending on satellite communications by DISA runs into hundreds of millions, if not billions, of dollars over extended periods, underscoring its critical role in maintaining global connectivity for the warfighter.

What is the potential impact of this contract on future satellite technology adoption within the DoD?

This contract, by utilizing existing satellite infrastructure, may represent a baseline for current needs rather than driving immediate adoption of cutting-edge technologies. However, the performance and reliability demonstrated under this contract can inform future requirements and technology roadmaps. As the DoD increasingly looks towards proliferated LEO constellations and advanced MEO/GEO systems for enhanced capabilities (like lower latency and higher bandwidth), contracts like this provide valuable operational data. The experience gained by both DISA and SES can influence the specifications and evaluation criteria for future procurements, potentially accelerating the integration of next-generation satellite solutions if they prove cost-effective and operationally superior.

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

Offers Received: 2

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: SES Government Solutions Inc. (UEI: 400465340)

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: $29,296,777

Exercised Options: $23,290,249

Current Obligation: $23,290,249

Contract Characteristics

Commercial Item: COMMERCIAL ITEM

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: GS35F0328V

IDV Type: FSS

Timeline