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Four MoCo companies secure $2.5 billion satellite contract Featured

satellite1Four Montgomery County companies are among 19 firms nationwide selected by the General Services Administration to provide satellite services to federal agencies.

There are at least 1,500 mostly high-tech jobs in the satellite industry in the County. That’s based on figures provided by Germantown’s Hughes Network Systems, by far the largest satellite company in the County and among the largest in the nation, as well as information from UltiSat in Gaithersburg.

The other companies selected by GSA were AIS Engineering of Silver Spring and RiteNet Corp. of Rockville. There were also 11 firms chosen from elsewhere in the D.C. area, and four firms outside the area.

Federal agencies use satellites for many functions, including communicating between and within agencies, military surveillance, earth and space observation and other scientific uses, satellite research and development, navigation, broadcasting, emergency assistance both domestic and foreign, and operational activities like employee training and fleet and asset tracking.

UltiSat, for instance, has had increased demand which stems from the recent string of hurricanes and other natural disasters in the U.S. and abroad, assisting the staging and deployment of first response teams, said vice president David Bryant.

It also won a $4.7 million task order, under the previous, soon-to-end GSA contract, to assist military surveillance by unmanned aircraft in the Pacific, noted program director Steve Roth.

Weather satellites are another federal function, though not covered in the new GSA contract, said Tony Bardo, Hughes assistant vice president for government solutions. Hughes serviced job-training of satellite networks for federal employees around the country and the globe in recent years, he added.

Bardo explained how the GSA contract works for 19 providers and many federal agencies. First, he said, GSA put out a Request for Proposals, and many companies with different specific skills within the overall satellite field submitted their bids.

GSA chose the 19 companies from those proposals. By winning at that stage, Bardo said, Hughes gets “no immediate business but [going forward] we have a seat at the table.”

Then, particular agencies will put out “statements of work” or “task orders” for specific satellite services and requirements under the overall GSA contract, he continued. The 19 companies receive the task orders, and each firm decides whether to bid on each order, he said.

“That’s the second competition within the [overall] contract,” Bardo added. It’s at that point that price competition enters the picture, he said. Each agency will decide for each SOW whether it will be “lowest-price,” that is, go to the provider offering the lowest price and meeting all the requirements. Or, the agency can seek “best value,” a combination of price and the quality of the provider’s approach. Finally, the agency can put out an SOW where “price doesn’t matter” or is less important than fully meeting all desired features in the SOW.

The new GSA contract is termed the Complex Commercial SATCOM Solutions (CS3) IDIQ contract, and succeeds the CS2 contract. IDIQ means “indefinite delivery, indefinite quantity,” because the precise quantities and services depend on the specific SOWs executed under the overall GSA contract.

Laura Moreno-Davis, UltiSat marketing director, said UltiSat was classified as a “small business” under the CS2 contract, and will be classified as a “large business” under CS3. By being classified as a “large business” under CS3, she added, the firm will no longer be subject to dollar-size restrictions in the SOWs for which it bids.

CS3 will run for five years, with a GSA option to renew for five more years. Bardo said the renewal period is an important advance over the CS2 contract. Adding the times for agencies to draft SOWs, for the bidding process, and implementation, the whole life cycle of an SOW can easily run five years, he explained.

The cap amount to be spent in the 10 years is $2.5 billion.

According to the Satellite Industry Association, the global “spend” on satellites in 2016 was $261 billion, with $110 billion, or 42 percent, in the United States. There were 1,459 satellites in operation at the end of 2016, of which 144 were launched in that year. Fifty-nine countries had at least one satellite; the U.S. had 594, both public and private.

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