Intelsat: GAO Rejects Competitors’ Protest of Navy Contract

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PARIS — Satellite fleet operator Intelsat on May 12 said the U.S. Government Accountability Office (GAO) has rejected protests by three companies alleging anti-competitive behavior on the part of an Intelsat subsidiary, paving the way for the activation of a U.S. Navy satellite-services contract valued at $543 million over five years.

Announcing its financial results for the first three months of 2010, Luxembourg-headquartered, Washington-based Intelsat said the Commercial Broadband Satellite Program (CBSP) contract with the Navy should be activated within a matter of days. The contract’s value is $10 million for the first year.

Artel Inc. of Reston, Va., CapRock Communications of Fairfax, Va., and Segovia Inc. of Herndon, Va. — all of which had bid on the CBSP contract against Intelsat’s government-services subsidiary, Intelsat General — had argued that Intelsat’s gloves-off treatment of them during the contract competition amounted to anti-competitive behavior.

Artel and CapRock, along with two other companies, have filed separate, similar protests against Intelsat’s competitive practices to the U.S. Federal Communications Commission, whose review is ongoing. But that protest has no direct bearing on the CBSP award.

Intelsat also said that its Galaxy 15 C-band television-distribution satellite, which stopped responding to ground commands on April 5 and has since begun an uncontrolled drift along the geostationary orbital arc, had a net book value of $142.4 million as of March 31.

The company said “an impairment loss could be recognized in a future period” if it is unsuccessful in returning Galaxy 15 to commercial service. Intelsat’s most immediate concern with Galaxy 15 is shutting down the satellite’s still-active C-band payload. Intelsat officials have said it is highly unlikely that Galaxy 15 will return to regular service.

 

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