U.S. Air Force Awards IDIQ Contract to 14 Satellite Companies

The nearly $495 million contract allows the government to pull from a pool of commercial satellite companies in the geosynchronous orbit and in the medium-earth and low-earth orbits, SMC said. The companies under the contract can choose to compete for task orders that fit with their capabilities, the satellite executives said. Contract winners include Boeing, Eutelsat and Orbital Sciences.

The IDIQ contract allows commercial satellite companies’ timelines to work well with the timelines of government missions, some satellite executives said. The IDIQ contract gives a level of certainty for industry and government in terms of the time frame for “marrying up” commercial payloads with government satellites, said Chuck Cynamon, SSL vice president-U.S. government business development and strategy. It addresses the inconsistency between government and the commercial industry that exists when trying to match those procurement timelines, he said. “A lot of it deals with the onerous regulations and acquisition and procurement laws for the U.S. government,” he said. “There are a lot of steps in the process.” HOPS touches on the acquisition piece, he said. SSL was awarded the HOPS IDIQ contract in both the geosynchronous orbit and in the low-earth and medium-earth orbit lanes, he said.

Having a contract vehicle is a “smart move,” said Skot Butler, Intelsat General vice president-satellite networks and space services. “It gives us an understood framework to go forward.” The contract is not a “magic bullet,” he said. Some parts of the government “still need to increase the tempo of the way that they work to match the commercial tempo to be sure that everything lines up,” he said. When the government identifies a satellite that’s going up and has a time frame for it, the government needs to be sure it can move out at a commercial pace, he added.

ViviSat looks forward to doing business with the government using commercial technical processes and on a firm fixed-price basis, which is similar to how it does business commercially, said CEO Craig Weston. “While the government has done business on a firm fixed-price basis, it isn’t something that they traditionally do in the satellite business because their programs tend to be expensive, they spend a long time in development and the requirements for a satellite quite often change along the way.” Doing business on a firm fixed price puts the onus on the government to be very clear about what it wants up front “and then not change their mind along the way,” which would add cost or risk to the mission, he said.

SES expects the contract to allow it to expand on the work it has already done with the government, including hosting the Commercially Hosted Infrared Payload (CHIRP) program that ended in January, said Tip Osterthaler, president of SES Government Solutions. Placing an added-on government payload on an SES commercial communications satellite and a follow-on to CHIRP are possible opportunities, he said.

The IDIQ contracts will benefit both industry and government, Osterthaler said. “A lot of the throat clearing that has to take place before a contract is awarded is done in advance.” The companies are pre-qualified, the terms and conditions are largely negotiated in advance, “so it makes it easier to get things on contract,” he said. “You just bid on the project without all the peripheral elements.” Hosted payloads are still new for the government and there are challenges, he said. The essence of a hosted payload is that the government is a guest, he said. “The guest doesn’t get to dictate what time dinner is going to be served or what’s on the menu.” There will be some debate on how deeply involved the government will need to be, he said. “We'll have to find where the equilibrium is."

The contract could serve as a step toward cost-cutting and streamlined methods of acquisition and procurement, the executives said. It’s needed because the government needs to expand the number of platforms it has available for its missions, Weston said. “The government needs to take more advantage of the commercial capabilities that our nation already has, rather than trying to do it with a selected set of defense contractors or a build-your-own solution.” It’s going to help the government think more broadly with how it does contracts and how it works with commercial industry, he added.

Having this potential for putting a payload on a commercial satellite is “a strong sweetener” in many of the deals that SSL makes on the commercial side by helping to reduce the overall cost for the owner/operators working with SSL, Cynamon said. It also decreases the cost of access to space for the government when a partial payload can work instead of a dedicated military satellite, he said.

As a satellite service company, ViviSat hopes to further introduce the government to its services through its work with the HOPS IDIQ, said Weston. “We're hoping through it [IDIQ] that the government will gain more insight into satellite servicing and the benefits of our primary mission,” and be encouraged to take advantage of that for some of their satellite systems already on orbit as well as its next-generation systems, he said.