WASHINGTON — Satellite terminal and broadband service provider ViaSat Inc. upset incumbentTelecommunications Corp. July 21 to win a U.S. Army contract potentially worth $477 million for a satellite-based tracking system, but the losing bidder immediately announced plans to protest the award.
The Army chose Carlsbad, Calif.-based ViaSat to provide the satellite terminals, network infrastructure and bandwidth for the Blue Force Tracking (BFT)-2 program, according to a company press release. ViaSat received $37.7 million under the indefinite-delivery, indefinite-quantity contract’s first task order.
The Army and Marine Corps have been using the original BFT system, which provides troops and commanders with the locations of friendly forces on the battlefield, since 2003. Each of the deployed terminals uses a GPS receiver to determine its position and an L-band transceiver to send data back to the system via satellite. Prior to Blue Force Tracking, the military mostly relied on line-of-sight radios to relay position |information.
Northrop Grumman Mission Systems of Reston, Va., is the prime contractor for the BFT program and its follow-on, providing the battle management software and system integration functions. Comtech Telecommunications subsidiary Comtech Mobile Datacom of Germantown, Md., has provided BFT terminals and network capacity.
ViaSat’s winning bid for the BFT-2 contract was valued at $249.9 million, according to Comtech, which said in a July 21 press release that the proposal price was 50 percent lower than its offering.
“Given our proven performance during a war-time environment, the performance capability of our [BFT] transceiver and our belief that Comtech offers a lower overall program risk to the U.S. Army as well as other factors, we anticipate protesting the award given to the third party,” Fred Kornberg, chief executive of Comtech Telecommunications, said in the press release.
ViaSat topping Comtech for the BFT-2 contract was a major surprise for a number of reasons, according to Chris Quilty, senior vice president with financial services firm Raymond James & Associates of St. Petersburg, Fla.
Contract incumbents are traditionally difficult to unseat, and Comtech was providing an essential capability to U.S. troops during a time of war, Quilty said in a July 21 interview. The 100,000 Comtech terminals deployed under the original BFT program will not be compatible with the ViaSat network and will thus become obsolete, he said.
“Prevailing wisdom said even at a higher cost, it would be worth buying from Comtech,” Quilty said.
Comtech’s BFT system is entirely proprietary, whereas ViaSat says its network is based on open Internet protocol standards. The decision to go with ViaSat may be indicative of the Army’s desire to move away from a proprietary system, but in effect the Army is just moving from one sole provider to another, Quilty said.
Comtech Telecommunications’ stock fell by nearly 32 percent in trading July 21 to close at $21.30. ViaSat’s stock rose by 5 percent to close at $35.08.