DoD's $34M satellite broadband contract to SES Space & Defense, Inc. awarded without competition

Contract Overview

Contract Amount: $34,098,660 ($34.1M)

Contractor: SES Space & Defense, Inc.

Awarding Agency: Department of Defense

Start Date: 2019-01-01

End Date: 2023-12-31

Contract Duration: 1,825 days

Daily Burn Rate: $18.7K/day

Competition Type: NOT COMPETED UNDER SAP

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: BPA TASK ORDER--GLOBAL BROADBAND SERVICE, GATEWAY SERVICES AND LEASED TERRESTRIAL BACKHAUL AND FSR SUPPORT

Place of Performance

Location: RESTON, FAIRFAX County, VIRGINIA, 20191

State: Virginia Government Spending

Plain-Language Summary

Department of Defense obligated $34.1 million to SES SPACE & DEFENSE, INC. for work described as: BPA TASK ORDER--GLOBAL BROADBAND SERVICE, GATEWAY SERVICES AND LEASED TERRESTRIAL BACKHAUL AND FSR SUPPORT Key points: 1. Contract awarded on a firm-fixed-price basis, indicating defined costs and risks. 2. The contract spans five years, suggesting a need for sustained service delivery. 3. Awarded to a single vendor, raising questions about competitive pricing and market alternatives. 4. The service category, Satellite Telecommunications, is critical for global connectivity. 5. No small business set-aside was utilized, potentially limiting opportunities for smaller firms. 6. The contract value is substantial, requiring careful oversight for value for money.

Value Assessment

Rating: fair

The contract's firm-fixed-price structure provides cost certainty. However, without a competitive bidding process, it is difficult to benchmark the pricing against market rates or alternative providers. The absence of competition means potential savings may have been forgone. Further analysis would require access to cost breakdowns and comparisons with similar global broadband service contracts awarded competitively.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was not competed under the Simplified Acquisition Procedures (SAP) and was awarded as a sole-source BPA Task Order. This indicates that the Defense Information Systems Agency (DISA) likely determined that only SES Space & Defense, Inc. could provide the required global broadband services, gateway services, and leased terrestrial backhaul. The lack of competition limits the agency's ability to explore a wider range of solutions and potentially secure more favorable pricing through a competitive process.

Taxpayer Impact: Taxpayers may have paid a premium due to the absence of competitive pressure. Without multiple bids, there is less assurance that the government received the best possible price for these essential satellite telecommunications services.

Public Impact

Provides essential global broadband and gateway services to the Department of Defense. Supports critical communication infrastructure for military operations worldwide. Ensures leased terrestrial backhaul and FSR support, vital for network reliability. Benefits military personnel and operations requiring secure and reliable connectivity. The geographic impact is global, supporting DoD's worldwide mission requirements.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition may lead to higher costs for taxpayers.
Sole-source award limits visibility into alternative service providers and pricing.
Potential for vendor lock-in given the long-term nature of the contract.

Positive Signals

Firm-fixed-price contract provides cost certainty for the duration.
Long-term contract (5 years) ensures continuity of critical services.
Awarded to a known entity (SES Space & Defense, Inc.) potentially implying established capabilities.

Sector Analysis

The satellite telecommunications sector is a vital component of global communication infrastructure, supporting both commercial and government needs. This contract falls within the broader IT and telecommunications services market, specifically focusing on satellite-based solutions. The market is characterized by high barriers to entry due to technological complexity and capital investment. Spending in this sector by government agencies is significant, driven by the need for secure, reliable, and globally accessible communication, especially in remote or austere environments where terrestrial infrastructure is lacking or vulnerable.

Small Business Impact

This contract was not awarded as a small business set-aside, nor does it appear to have specific subcontracting requirements for small businesses indicated in the provided data. The prime contractor, SES Space & Defense, Inc., is a large business. This means that opportunities for small businesses to directly participate in this specific contract are likely limited unless they are part of SES's supply chain or subcontracting network, which is not explicitly detailed here.

Oversight & Accountability

The contract is a BPA Task Order, which typically falls under the oversight of the issuing agency, in this case, the Defense Information Systems Agency (DISA) under the Department of Defense. Oversight would involve monitoring performance against the firm-fixed-price terms, ensuring service delivery meets specifications, and managing payments. Transparency is generally maintained through contract databases like FPDS, but detailed performance metrics and cost justifications for sole-source awards are often internal or require specific Freedom of Information Act requests.

Related Government Programs

Global Broadband Services
Satellite Communications Contracts
Defense Information Systems Agency Contracts
Department of Defense IT Services
Leased Terrestrial Backhaul Services

Risk Flags

Sole-source award lacks competitive pricing validation.
Potential for higher costs due to absence of competition.
Limited transparency into specific service costs and profit margins.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $34.1 million to SES SPACE & DEFENSE, INC.. BPA TASK ORDER--GLOBAL BROADBAND SERVICE, GATEWAY SERVICES AND LEASED TERRESTRIAL BACKHAUL AND FSR SUPPORT

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 $34.1 million.

What is the period of performance?

Start: 2019-01-01. End: 2023-12-31.

What is the track record of SES Space & Defense, Inc. in providing similar global broadband and gateway services to the Department of Defense?

SES Space & Defense, Inc. has a significant history of providing satellite-based communication services to government and defense entities. As a major player in the commercial satellite industry, the company operates a large fleet of satellites and offers a range of services including broadband, secure communications, and managed network solutions. Their experience often includes supporting military operations, disaster relief efforts, and providing connectivity in challenging environments. Specific to the DoD, SES has been a long-term partner, fulfilling various requirements for secure and reliable satellite communications. This includes providing services through different contract vehicles and task orders, often involving high-bandwidth data transmission and resilient connectivity solutions critical for national security missions. Their established presence and technical capabilities likely contributed to their selection for this sole-source award.

How does the pricing of this $34 million contract compare to similar global broadband service contracts awarded competitively by the DoD or other federal agencies?

Direct comparison of pricing is challenging without access to detailed cost breakdowns and specific service level agreements (SLAs) for this contract, especially given its sole-source nature. However, generally, sole-source awards tend to be higher than competitively procured contracts because they lack the downward price pressure inherent in a bidding process. To benchmark, one would typically look at contracts for similar satellite bandwidth, data rates, geographic coverage, and service support awarded competitively. For instance, if other agencies have secured similar global broadband services for significantly less per gigabit or per month through competitive bids, it would suggest that this contract may not represent the best value. The firm-fixed-price nature provides cost certainty but does not inherently guarantee cost-effectiveness when competition is absent.

What are the primary risks associated with a sole-source award for critical global broadband services, and how might they be mitigated?

The primary risks of a sole-source award for critical services like global broadband include potential overpayment due to lack of competition, limited innovation from the vendor (as there's no competitive pressure to improve services), and vendor lock-in, making it difficult to switch providers if performance issues arise or better alternatives emerge. Mitigation strategies can include robust contract management and oversight by the agency to ensure performance standards are met and that the vendor is delivering value. The agency could also conduct market research periodically to understand evolving technologies and pricing, and plan for future competitive procurements to introduce competition back into the market. Clear performance metrics and termination clauses within the contract can also help manage risks.

What is the expected effectiveness of these global broadband services in supporting Department of Defense operations, considering the 5-year duration?

The effectiveness of these services is expected to be high, given the critical nature of global broadband and gateway services for modern military operations. The 5-year duration suggests a strategic need for sustained, reliable connectivity across various theaters of operation, supporting intelligence, surveillance, reconnaissance (ISR), command and control (C2), logistics, and personnel communications. SES Space & Defense, Inc.'s established infrastructure and expertise in satellite telecommunications are designed to provide the necessary bandwidth, uptime, and security required by the DoD. The firm-fixed-price structure aims to ensure predictable costs for these essential capabilities over the contract period, contributing to operational readiness and mission success.

How has historical spending on satellite telecommunications by the Department of Defense evolved, and where does this contract fit within that trend?

Historical spending by the DoD on satellite telecommunications has been substantial and consistently growing, driven by increasing data demands, the need for global reach, and the deployment of advanced military platforms. Agencies like DISA are major consumers of these services, utilizing them to maintain secure and resilient communication networks. This $34 million contract, spanning five years, represents a significant but not unprecedented investment within the DoD's overall satellite communications budget. It aligns with the trend of relying on specialized providers like SES for robust, high-capacity satellite bandwidth and related services, particularly for applications requiring global coverage and high availability that terrestrial networks cannot consistently provide.

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 UNDER SAP

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Global Enterprise Solutions Inc.

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: $34,098,660

Exercised Options: $34,098,660

Current Obligation: $34,098,660

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: HC101318A0002

IDV Type: BPA

Timeline