DoD's $37.3M KU-band space segment contract awarded to BUSHTEX INC shows strong competition

Contract Overview

Contract Amount: $37,314,548 ($37.3M)

Contractor: Bushtex Inc

Awarding Agency: Department of Defense

Start Date: 2018-08-01

End Date: 2024-01-31

Contract Duration: 2,009 days

Daily Burn Rate: $18.6K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 4

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: SPACE SEGMENT KU-BAND

Place of Performance

Location: INDIAN SPRINGS, CLARK County, NEVADA, 89018

State: Nevada Government Spending

Plain-Language Summary

Department of Defense obligated $37.3 million to BUSHTEX INC for work described as: SPACE SEGMENT KU-BAND Key points: 1. The contract's value of $37.3 million over its period of performance suggests a significant investment in critical space-based communication capabilities. 2. Full and open competition indicates a healthy market with multiple potential suppliers, likely driving competitive pricing. 3. The contract's duration and scope may present performance risks if not managed effectively, particularly concerning technological obsolescence or evolving mission needs. 4. Awarded by the Defense Information Systems Agency (DISA), this contract aligns with broader defense strategies for secure and resilient communication. 5. The use of a Firm Fixed Price contract type aims to transfer cost risk to the contractor, promoting budget predictability.

Value Assessment

Rating: good

The contract value of $37.3 million for KU-band space segment services appears reasonable given the specialized nature of satellite communications and the extended performance period. Benchmarking against similar large-scale satellite service contracts would provide a more precise value-for-money assessment. The firm fixed-price structure suggests an effort to control costs, but detailed cost breakdowns are not available for direct comparison. Without specific performance metrics or comparable contract data, a definitive assessment of cost efficiency is challenging, but the competitive award process is a positive indicator.

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 4 bids suggests a competitive environment where multiple companies vied for the contract. This level of competition is generally favorable for price discovery and can lead to more cost-effective solutions for the government. The agency's decision to pursue full and open competition implies confidence in the market's ability to provide suitable options.

Taxpayer Impact: Taxpayers benefit from full and open competition as it typically drives down prices through market forces, ensuring that government funds are used more efficiently. A competitive process increases the likelihood of securing services at a fair market value.

Public Impact

The primary beneficiaries are the Department of Defense (DoD) and its various branches, which will receive enhanced KU-band space segment capabilities. The services delivered are crucial for secure, reliable, and high-bandwidth communication, supporting military operations, intelligence gathering, and command and control. The contract's performance is likely concentrated in areas requiring robust satellite connectivity, potentially impacting global operations or specific strategic locations. While not directly creating new jobs, the contract supports existing roles within BUSHTEX INC and potentially its subcontractors in the aerospace and telecommunications sectors.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for technological obsolescence in satellite communication systems over the contract's extended duration.
Dependence on a single contractor for critical space segment services could pose risks if performance issues arise.
Ensuring continued compliance with evolving cybersecurity standards for space-based assets.

Positive Signals

Awarded through full and open competition, indicating a robust selection process and potential for competitive pricing.
Firm Fixed Price contract type helps manage budget predictability and shifts cost overrun risks to the contractor.
The contractor, BUSHTEX INC, has secured a significant contract, suggesting a level of established capability and trust within the defense sector.

Sector Analysis

The KU-band spectrum is vital for a wide range of satellite communication applications, including broadband internet, broadcasting, and secure military communications. The market for satellite services is characterized by high capital investment, technological complexity, and significant regulatory oversight. This contract fits within the broader defense telecommunications sector, where reliable and secure connectivity is paramount. Comparable spending benchmarks in this sector often involve multi-year, multi-million dollar contracts for satellite capacity, ground segment support, and related services.

Small Business Impact

There is no indication that this contract included a small business set-aside. Given the specialized nature and scale of KU-band space segment services, it is common for prime contracts to be awarded to large, established aerospace and defense companies. However, BUSHTEX INC may engage small businesses as subcontractors for specific components or services, contributing to the broader small business ecosystem. Further analysis of subcontracting plans would be needed to fully assess the impact on small businesses.

Oversight & Accountability

Oversight for this contract would typically be managed by the contracting officer and the Defense Contract Management Agency (DCMA) at the Defense Information Systems Agency (DISA). Accountability measures are embedded in the contract terms, including performance standards and payment schedules tied to delivery. Transparency is generally maintained through contract award databases and reporting requirements, though specific operational details may be classified. The Inspector General's office for the Department of Defense would have jurisdiction over any investigations into fraud, waste, or abuse related to this contract.

Related Government Programs

DoD Satellite Communications
Defense Information Systems Network (DISN)
Military Satellite Communications Systems
Space-Based Defense Systems
Secure Communications Contracts

Risk Flags

Potential for technological obsolescence
Dependence on contractor performance
Cybersecurity vulnerabilities in space assets

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $37.3 million to BUSHTEX INC. SPACE SEGMENT KU-BAND

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 $37.3 million.

What is the period of performance?

Start: 2018-08-01. End: 2024-01-31.

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

BUSHTEX INC's track record in delivering KU-band space segment services is a critical factor in assessing the risk and potential success of this contract. While the provided data indicates they were awarded this significant contract, a deeper dive into their past performance is necessary. This would involve reviewing their history with similar contracts, including their on-time delivery rates, adherence to technical specifications, and any past performance evaluations or disputes. Information from sources like the Contractor Performance Assessment Reporting System (CPARS) would be invaluable. A strong track record suggests a higher likelihood of successful execution, while a history of issues could indicate potential risks related to performance, cost, or schedule.

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

Comparing the awarded price of $37.3 million to market rates for similar KU-band satellite capacity and services is essential for determining value for money. This comparison would involve analyzing current industry pricing for satellite transponder leases, ground station access, and associated managed services, considering factors like bandwidth, geographic coverage, service level agreements, and contract duration. Benchmarking against other government contracts for comparable satellite services, adjusted for specific requirements, would also be informative. Without access to detailed pricing breakdowns or a comprehensive market analysis, it's difficult to definitively state if this contract represents excellent value. However, the full and open competition suggests that the price achieved is likely competitive within the current market landscape.

What are the primary performance risks associated with this KU-band space segment contract, and how are they being mitigated?

The primary performance risks associated with this KU-band space segment contract include potential technological obsolescence, service disruptions, and the contractor's ability to meet evolving bandwidth and security requirements over the contract's extended duration. Technological advancements in satellite communication could render the contracted services less efficient or secure over time. Service disruptions could arise from satellite malfunctions, ground station issues, or cyber threats. Mitigation strategies typically involve robust service level agreements (SLAs) with penalties for non-performance, clear technical specifications, regular performance reviews, and contingency planning for service continuity. The firm fixed-price nature also incentivizes the contractor to manage risks effectively to maintain profitability.

What is the historical spending pattern for KU-band space segment services by the Department of Defense or DISA?

Analyzing historical spending patterns for KU-band space segment services by the Department of Defense (DoD) or DISA provides context for the $37.3 million award. This would involve examining previous contract awards for similar services, including their values, durations, and the number of competitors. Understanding trends in spending, such as increases or decreases in demand, shifts in technology adoption (e.g., from L-band to Ka-band or higher throughput satellites), and the impact of geopolitical events on communication needs, is crucial. Consistent or increasing spending in this area suggests a sustained requirement for these services, while significant fluctuations might indicate changes in strategy or technology. This historical data helps in assessing whether the current contract represents a typical investment or an outlier.

How does the competition level (4 bidders) for this contract compare to other similar large-scale satellite service procurements?

The competition level of 4 bidders for this $37.3 million KU-band space segment contract is a positive indicator, suggesting a reasonably healthy market for these specialized services. To assess this further, it would be beneficial to compare this number to the typical number of bids received for similar large-scale satellite service procurements within the DoD or across government agencies. If the average is significantly higher, it might suggest specific barriers to entry or a consolidation within the market for this particular type of service. Conversely, if 4 bidders is typical or high, it reinforces the idea that the full and open competition was effective in attracting multiple capable offerors, likely contributing to a more competitive price.

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: 4

Pricing Type: FIRM FIXED PRICE (J)

Contractor Details

Address: 723 W GUADALUPE RD, GILBERT, AZ, 85233

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: $37,314,548

Exercised Options: $37,314,548

Current Obligation: $37,314,548

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Parent Contract

Parent Award PIID: GS35F0546R

IDV Type: FSS

Timeline