DoD space agency changes course on satellite procurement in wake of Maxar’s protest

GAO dismissed the protest after SDA agreed to cancel the solicitation and reopen a brand new one beneath a unique contracting mechanism referred to as Different Transaction Authority. 

WASHINGTON — In response to a protest filed Oct. 8 by Maxar Applied sciences, the Protection Division’s House Improvement Company is canceling a solicitation issued Aug. 30 in search of bids for 126 satellites and can begin over with a brand new procurement, the company mentioned Oct. 28.

SDA is pulling again the request for proposals (RFP) for the Transport Layer Tranche 1 — a mesh community of small communications satellites in low Earth orbit projected to begin launching in 2024. 

The RFP drew a protest from Maxar which filed a grievance with the Authorities Accountability Workplace difficult the solicitation on grounds that the phrases unfairly favored sure corporations over others. “There was an look that we restricted competitors,” mentioned SDA Director Derek Tournear.

GAO dismissed the protest after SDA agreed to cancel the solicitation and reopen a brand new one beneath a unique contracting mechanism referred to as Different Transaction Authority.  A brand new solicitation was issued Oct. 28.

“Whereas this can be a shift from our earlier acquisition strategy, OTAs typically permit for a extra streamlined solicitation, analysis, and contract award processes that’s properly fitted to SDA,” mentioned SDA spokesperson Jennifer Elzea.

“This modification shouldn’t be anticipated to considerably affect the supply timeline, value, or technical necessities for the Tranche 1 Transport Layer,” she mentioned. “We’ll make sure that all rivals have time to submit their gives and the company can consider them absolutely and pretty.”

OTAs give authorities businesses extra flexibility to construction the proposal and analysis. The Competitors in Contracting Act doesn’t apply to OTA offers so they’re much less prone to be protested. 

“We need to guarantee that anybody that want to bid and compete has the chance to submit a proposal to take action,” Tournear mentioned.

Beforehand SDA had chosen distributors and awarded contracts utilizing the usual procurement course of beneath the Federal Acquisition Regulation. “So this can be a shift from our acquisition strategy the place we’ve centered on FAR-based acquisitions,” mentioned Tournear. 

Like every authorities company, SDA has authority to make use of completely different contracting mechanisms, he mentioned. “OTA permits for extra streamlined analysis and proposal construction, and that most accurately fits SDA’s measurement and lean operation.”

Concentrate on quicker procurement 

Since taking the highest job at SDA two years in the past, Tournear has insisted that the company’s focus is to accumulate and deploy techniques at a quicker tempo than is often seen in Pentagon applications. 

SDA is constructing the Pentagon’s first-ever community of small satellites in low Earth orbit to help navy demand for low-latency communications, surveillance and monitoring of enemy targets. The Transport Layer Tranche 0 constellation is projected to launch in 2022 and the a lot bigger Tranche 1 in 2024.

SDA’s determination to cancel the RFP and shift to an OTA association suggests the company is anxious that it won’t be capable of meet its formidable timelines if it makes use of the standard FAR-based contracting course of the place any clause or procedural merchandise will be grounds for a protest. Whereas contracts are beneath dispute, businesses must cease the work, inflicting schedule delays.

Maxar’s was not the primary authorized protest filed towards an SDA procurement determination. Following the choice a 12 months in the past of L3Harris and SpaceX to supply eight missile-tracking Tranche 0 satellites, Airbus and Raytheon filed protests with GAO which had been settled after SDA agreed to reevaluate proposals. 

The Transport Layer Tranche 1 is the company’s largest procurement so far. Tournear mentioned he doesn’t count on the shift to an OTA contract to “considerably affect the timeline.”

The Transport Layer Tranche 1 has 126 baseline satellites and an extra 18 experimental satellites which can be being procured individually.

OTA contracts had been first licensed by Congress within the 1994 Nationwide Protection Authorization Act to be used in analysis and growth initiatives. The 2015 NDAA expanded the authority to incorporate any prototype undertaking. The purpose was to create a brand new automobile for DoD to draw nontraditional corporations to bid on expertise initiatives.  

Tournear mentioned the Transport Layer qualifies as a prototype though the plan is to make use of commercially produced satellites. 

“We’re procuring satellites which can be primarily based mostly on commoditized merchandise,” he mentioned. “We nonetheless anticipate this OTA to be a hard and fast value procurement, that’s one thing that we expect has low technical threat.” The upper threat piece is “delivering is a constellation that works collectively as an entire community and techniques that present the capabilities to the warfighter. And that idea, in case you take a look at the entire constellation and the way it works collectively, that’s what is being prototyped with Tranche 1.” Tournear mentioned the OTA is “to not purchase a prototype satellite tv for pc however it’s to purchase a prototype constellation.”

Underneath the OTA guidelines, any industrial enterprise or tutorial establishment can bid for a contract. Conventional protection contractors, nonetheless, are required to accomplice with nontraditional corporations or must comply with fund often one-third of the price of the undertaking. 

“This might be our first time utilizing OT,” Tournear mentioned. “I might anticipate to do value share or have a small or nontraditional performer present a major contribution to the hassle.”

FAR-based contracting “provides you a number of benefits however the reality is that it’s bought a number of built-in clauses which can be based mostly on previous case legislation,” he mentioned, which “might hinder a number of the flexibility that you simply achieve with OT.”

The technical necessities for the Transport Layer Tranche 1 won’t change, he mentioned. “We’ll clearly have to regulate to a brand new proposal date to make sure that everyone has time to submit a great proposal, and may reevaluate based mostly on the small print that they see within the new solicitation.”

Tournear mentioned one of many challenges for SDA has been to persuade contractors that its satellite tv for pc procurements should not like earlier DoD acquisitions. The plan is to award contracts for brand new satellites each two years to a variety of suppliers, versus the “vendor lock” seen in earlier DoD satellite tv for pc applications the place the corporate that wins a contract retains it for many years. 

This mindset drives corporations to protest, fearing that they won’t have one other probability to compete in the event that they lose the primary spherical. 

“Sadly, the truth that lots of people are used to the previous mannequin of acquisition the place you’ll win a program for 10 years and in case you didn’t win it early on you had been form of shut out,” mentioned Tournear. “That mentality pervades within the industrial base and we’re attempting to shift that, however I can perceive that hesitation.” SDA has to “really reveal that we’re doing issues in a different way, that we’re doing this based mostly on each different 12 months solicitations.”

In each solicitation, “we’re going to be in search of whoever has the most effective providing at the moment, and so folks can really feel like they will all the time plan on successful a portion of that market share,” Tournear mentioned. “Till we really reveal that via a number of acquisitions, I believe you’re all the time going to see this mentality that individuals are going to need to make sure that they will struggle as exhausting as they will to get in, to get an early award.”

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