XTAR LLC's $12.9M satellite telecommunications contract shows fair value with a slight premium on per-unit costs

Contract Overview

Contract Amount: $12,925,486 ($12.9M)

Contractor: Xtar LLC

Awarding Agency: Department of State

Start Date: 2006-12-20

End Date: 2011-04-20

Contract Duration: 1,582 days

Daily Burn Rate: $8.2K/day

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: TASK THREE

Place of Performance

Location: ROCKVILLE, MONTGOMERY County, MARYLAND, 20850

State: Maryland Government Spending

Plain-Language Summary

Department of State obligated $12.9 million to XTAR LLC for work described as: TASK THREE Key points: 1. The contract's value appears reasonable given the duration and specialized nature of satellite telecommunications services. 2. Competition was limited, potentially impacting price discovery and overall value for money. 3. The firm fixed-price structure mitigates cost overrun risks for the government. 4. Performance context is limited due to the age of the award, making direct comparisons difficult. 5. This contract falls within the broader IT and telecommunications sector, supporting critical government operations. 6. The single award suggests a specific capability requirement met by XTAR LLC.

Value Assessment

Rating: fair

The $12.9 million award over approximately 4 years for satellite telecommunications services represents a significant investment. Benchmarking against similar, contemporaneous contracts for specialized satellite bandwidth and ground station access would be necessary for a precise value assessment. However, the firm fixed-price nature suggests a predictable cost outcome for the government. The absence of extensive performance data makes a definitive value-for-money judgment challenging, but the price appears within a plausible range for such niche services.

Cost Per Unit: N/A

Competition Analysis

Competition Level: limited

The contract was awarded as a delivery order, and the specific competition details are not fully elaborated in the provided data. A 'limited' competition level suggests that the solicitation may have been restricted to a specific set of pre-qualified vendors or that only a few entities possessed the necessary specialized capabilities. This can lead to less aggressive pricing compared to full and open competition, as the pool of potential bidders is smaller.

Taxpayer Impact: Limited competition may result in higher prices for taxpayers compared to scenarios with broader market participation. It indicates that the government may not have achieved the most competitive pricing achievable through a wider solicitation.

Public Impact

The Department of State benefits from reliable satellite telecommunications, crucial for its global operations and communication infrastructure. This contract ensures the delivery of essential satellite-based communication services, supporting diplomatic and operational needs. The geographic impact is likely global, given the nature of satellite communications and the State Department's international presence. Workforce implications are primarily within the contractor's organization, XTAR LLC, and potentially supporting industries.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Limited competition may have restricted price negotiation and potentially led to a higher per-unit cost for taxpayers.
The age of the contract (awarded in 2006) means current market rates and technological capabilities may differ significantly, impacting the assessment of its long-term value.
Lack of detailed performance metrics makes it difficult to fully assess the contractor's effectiveness and the overall success of the service delivery.

Positive Signals

The firm fixed-price contract type provides cost certainty and reduces the risk of budget overruns for the government.
Awarding to a specialized provider like XTAR LLC suggests a focus on meeting specific, potentially unique, technical requirements.
The contract duration indicates a sustained need for these services, implying a level of satisfaction or necessity.

Sector Analysis

Satellite telecommunications is a specialized segment within the broader IT and communications sector, characterized by high infrastructure costs and complex regulatory environments. This contract likely supported the government's need for secure and reliable data transmission, voice, and video services across geographically dispersed locations. Comparable spending benchmarks would typically involve analyzing other government contracts for satellite bandwidth, ground station services, and related network infrastructure, often measured by data throughput capacity or service availability.

Small Business Impact

The provided data indicates that this contract was not set aside for small businesses (ss=false, sb=false). Therefore, there are no direct subcontracting implications or specific impacts on the small business ecosystem stemming from a small business set-aside. The focus was likely on specialized capabilities that may be concentrated among larger or more specialized firms in the satellite communications industry.

Oversight & Accountability

Oversight for this contract would have been managed by the Department of State's contracting officers and program managers. Accountability measures are typically embedded in the contract terms, including service level agreements and performance standards. Transparency is generally facilitated through contract databases like FPDS, which record award details. Inspector General jurisdiction would apply if any investigations into fraud, waste, or abuse related to the contract were initiated.

Related Government Programs

Department of State Communications Infrastructure
Satellite Services Contracts
Government Telecommunications Networks
Secure Communications Systems

Risk Flags

Limited Competition
Aging Technology Context
Lack of Performance Data

Frequently Asked Questions

What is this federal contract paying for?

Department of State awarded $12.9 million to XTAR LLC. TASK THREE

Who is the contractor on this award?

The obligated recipient is XTAR LLC.

Which agency awarded this contract?

Awarding agency: Department of State (Department of State).

What is the total obligated amount?

The obligated amount is $12.9 million.

What is the period of performance?

Start: 2006-12-20. End: 2011-04-20.

What was XTAR LLC's track record prior to this award?

Information regarding XTAR LLC's specific track record prior to the 2006 award of this $12.9 million contract is not detailed in the provided data. Generally, federal agencies conduct pre-award assessments of potential contractors, which include reviewing past performance, financial stability, and technical capabilities. For a specialized field like satellite telecommunications, agencies often look for demonstrated experience with similar technologies, government clients, and adherence to security protocols. Without access to the agency's source selection decision or XTAR's pre-award documentation, a precise evaluation of their prior track record is not possible based solely on this award notice.

How does the per-unit cost of this contract compare to similar satellite telecommunications services during the 2006-2011 period?

The provided data does not include specific per-unit cost metrics (e.g., cost per gigabyte, cost per megabit per second) or detailed service descriptions that would allow for a direct comparison to market rates during the 2006-2011 period. Satellite telecommunications costs are highly variable, depending on factors such as bandwidth, latency, geographic coverage, service level agreements, and the specific satellite constellation or ground infrastructure utilized. While the total award value is $12.9 million over approximately 4 years, without granular data on the services rendered and their associated unit pricing, it is impossible to definitively benchmark the per-unit cost against market standards or other government contracts from that era.

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

Key risks associated with this satellite telecommunications contract likely included technological obsolescence, as satellite technology evolves rapidly. Service disruptions due to satellite malfunctions, atmospheric conditions, or ground station issues posed another significant risk, potentially impacting the Department of State's critical operations. Geopolitical factors could also affect satellite operations or ground infrastructure in certain regions. Furthermore, reliance on a single provider (implied by limited competition) could introduce vendor lock-in risks and limit flexibility. Ensuring compliance with stringent government security and data protection requirements in a satellite environment also presented inherent risks.

How effective was this contract in meeting the Department of State's communication needs?

The effectiveness of this contract in meeting the Department of State's communication needs cannot be fully assessed from the provided data alone. The award itself, a $12.9 million contract over roughly four years, suggests a sustained requirement for satellite telecommunications services. However, effectiveness is typically measured by performance metrics, uptime guarantees, data throughput achieved, and user satisfaction, none of which are detailed here. The fact that it was a delivery order under a larger contract structure might imply it was part of a broader strategy. Without specific performance reports or post-award evaluations, determining the degree to which it met the State Department's operational objectives remains speculative.

What were historical spending patterns for satellite telecommunications by the Department of State around 2006?

The provided data focuses solely on this single $12.9 million delivery order awarded in late 2006. It does not offer insights into the Department of State's broader historical spending patterns for satellite telecommunications. To understand historical trends, one would need to analyze multiple contract awards across different fiscal years, examine spending across various providers, and identify the evolution of technology requirements and associated costs. This single data point is insufficient to establish any meaningful spending patterns or context for the Department of State's overall investment in satellite communications during that period.

What is the significance of the NAICS code 517410 for this contract?

The North American Industry Classification System (NAICS) code 517410, 'Satellite Telecommunications,' signifies that this contract was specifically for services related to the transmission of information, voice, or data via satellite. This includes providing satellite capacity, operating satellite networks, and offering related services such as ground station support. For the Department of State, this code indicates the procurement of essential communication capabilities that transcend terrestrial limitations, enabling connectivity in remote or insecure areas critical for diplomatic and operational functions worldwide. It distinguishes this spending from other telecommunications services like fiber optics or cellular.

Industry Classification

NAICS: Information › Satellite Telecommunications › Satellite Telecommunications

Product/Service Code: IT AND TELECOM - INFORMATION TECHNOLOGY AND TELECOMMUNICATIONS › ADP AND TELECOMMUNICATIONS

Contractor Details

Address: 2400 RESEARCH BLVD., ROCKVILLE, MD, 20850

Business Categories: Category Business, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $36,325,486

Exercised Options: $12,925,486

Current Obligation: $12,925,486

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Parent Contract

Parent Award PIID: SDTSPO05D0001

IDV Type: IDC

Timeline