The Space Development Agency’s call for bids was contested because of the ‘risk’ it imposed on contractors

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Because of the financial strain, the program inflicted on contractors, Maxar Technologies chose to oppose a Defense Department (DoD) procurement of 126 satellites, according to the business. Maxar believed the conditions of Space Development Agency’s satellite purchase “unduly burdened sector, favoring larger firms ready and willing to take higher financial burden and risk,” according to the firm spokesperson in a statement that was released October 28 after SDA revealed it was scrapping solicitation for the Transport Layer Tranche 1, which is a mesh network of the small communications satellites in the low Earth orbit set to launch in 2024.

The Government Accountability Office (GAO) dismissed the protest on October 28 when SDA removed the request for proposals. On the same day, the agency reissued the RFP under a new contracting method known as Other Transaction Authority (OTA), which allows government buyers to manage programs utilizing activities rather than the normal federal procurement processes. Government procurements which favor corporations prepared to take on bigger financial risks, according to a Maxar representative, are “obviously contradictory with certain criteria of federal procurement law.”

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SDA got the protest dismissed by altering the procurement from the Federal Acquisition Regulation (FAR) to the OTA contract, although it’s not apparent that an OTA contract significantly affects the “financial hardship” concern stated by Maxar, according to the spokesman. “Our concerns about contractors being unfairly burdened may or may not be addressed.”

The representative stated, “Maxar is analyzing the updated RFP via OTA to assess what meaningful changes have been made.” “Maxar remains committed to providing innovative solutions in a truly competitive market to support the SDA as well as all of our government customers’ missions.” Derek Tournear, SDA Director has stated several times that the agency aims to hold complete and open competitions and that he wants to build a stable market that would encourage businesses to invest knowing that they will be able to bid for new contracts every two years. He stated that the organization is looking to purchase satellites at competitive prices through fixed-price contracts.

In a 2019 request for information, SDA stated, “SDA seeks to use private sector investments in space capabilities (e.g., software and hardware reuse, leasing of the services), as well as sector best practices (e.g., mass manufacturing processes for spacecraft buses, user terminals, and sensors).” SDA said that it will pick different bidders to provide 126 satellites in batches of 21 for Transport Layer Tranche 1 procurement. If three vendors are chosen, each must produce the first set of 21 satellites in time for the September 2024 launch.

Vendors would have to supply the items in order to be paid under a FAR contract. In addition, if the government decides to terminate the contract, it will only repay the contractor the amount agreed upon in the deal, regardless of how much the contractor invested beforehand to ramp up production.

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