DoD's $92.7M T&M contract for wired telecommunications services awarded to Peraton Inc. shows fair value
Contract Overview
Contract Amount: $92,727,996 ($92.7M)
Contractor: Peraton Inc.
Awarding Agency: Department of Defense
Start Date: 2010-10-01
End Date: 2014-09-27
Contract Duration: 1,457 days
Daily Burn Rate: $63.6K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 5
Pricing Type: TIME AND MATERIALS
Sector: Other
Official Description: T&M MATERIAL OPA
Place of Performance
Location: HUNTSVILLE, MADISON County, ALABAMA, 35898
State: Alabama Government Spending
Plain-Language Summary
Department of Defense obligated $92.7 million to PERATON INC. for work described as: T&M MATERIAL OPA Key points: 1. The contract's Time and Materials (T&M) pricing structure, while common, can pose risks for cost control if not closely managed. 2. Awarded under full and open competition, this contract likely benefited from competitive pricing pressures. 3. The duration of the contract (nearly 4 years) suggests a need for sustained telecommunications support. 4. The geographic location in Alabama (AL) indicates a focus on regional telecommunications infrastructure. 5. The North American Industry Classification System (NAICS) code 517110 points to a specific segment of the telecommunications market. 6. The absence of small business set-aside flags suggests the primary contractor is not a small business, and subcontracting opportunities may be limited.
Value Assessment
Rating: fair
The contract's total value of $92.7 million over approximately 4 years averages to about $23 million annually. Benchmarking this against similar large-scale telecommunications contracts for the Department of Defense is challenging without more granular data on the specific services provided. However, the Time and Materials (T&M) pricing model, while flexible, can lead to cost overruns if not meticulously monitored. The contract's performance and final cost relative to initial estimates would be key indicators of its value.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
The contract was awarded under full and open competition, indicating that all responsible sources were permitted to submit bids. This typically fosters a competitive environment, driving down prices and encouraging innovation. The presence of 5 bids (no) suggests a reasonable level of interest from potential contractors, which is a positive sign for price discovery and ensuring the government receives competitive offers.
Taxpayer Impact: Full and open competition generally leads to better pricing for taxpayers by leveraging market forces to secure the most cost-effective solutions.
Public Impact
The Department of the Army benefits from sustained wired telecommunications infrastructure and services. Military operations and administrative functions within Alabama are supported by this contract. The contract ensures the availability of critical communication networks for defense purposes. Personnel involved in telecommunications services, potentially including technicians and engineers, are employed through this contract.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Time and Materials (T&M) contracts can lead to cost escalation if not properly managed and monitored.
- The long duration of the contract may reduce flexibility to adopt newer technologies if not structured with upgrade clauses.
- Reliance on a single prime contractor for a significant duration could pose risks if contractor performance degrades.
Positive Signals
- Awarded under full and open competition, suggesting a competitive bidding process that likely secured favorable pricing.
- The contract was awarded to Peraton Inc., a known entity in the government contracting space, potentially indicating a level of established capability.
- The contract duration implies a stable and predictable telecommunications service provision for the Department of the Army.
Sector Analysis
This contract falls within the Wired Telecommunications Carriers sector (NAICS 517110), a segment of the broader telecommunications industry. This sector involves the provision of telecommunications services via a network of wired infrastructure, including fiber optic and copper lines. Spending in this area is critical for government operations, supporting everything from basic communication to advanced data transmission. Comparable spending benchmarks would typically be found within broader IT or telecommunications procurement data for federal agencies, often showing significant investment in maintaining and upgrading these essential networks.
Small Business Impact
The contract details indicate that small business set-asides were not utilized for this award (sb: false). This suggests that the primary focus was on securing the best overall offer from the full and open competition, rather than specifically targeting small business participation. Consequently, the direct impact on the small business ecosystem may be limited unless Peraton Inc. actively engages small businesses as subcontractors. Further analysis of subcontracting plans would be necessary to determine the extent of small business involvement.
Oversight & Accountability
Oversight for this contract would primarily reside with the contracting officers and program managers within the Department of the Army. The Time and Materials (T&M) nature of the contract necessitates rigorous monitoring of labor hours and material costs to ensure compliance with the contract terms and prevent overspending. Transparency is typically managed through regular reporting requirements from the contractor and periodic performance reviews. Inspector General jurisdiction would apply if any allegations of fraud, waste, or abuse arise.
Related Government Programs
- Department of Defense Telecommunications Infrastructure Contracts
- Army Network Modernization Programs
- Federal Wired Network Services
- DoD IT Services Procurement
Risk Flags
- Time and Materials Pricing Risk
- Long Contract Duration
- Potential for Cost Overruns
Tags
department-of-defense, department-of-the-army, wired-telecommunications-carriers, time-and-materials, full-and-open-competition, delivery-order, alabama, large-contract, telecommunications-services, ict
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $92.7 million to PERATON INC.. T&M MATERIAL OPA
Who is the contractor on this award?
The obligated recipient is PERATON INC..
Which agency awarded this contract?
Awarding agency: Department of Defense (Department of the Army).
What is the total obligated amount?
The obligated amount is $92.7 million.
What is the period of performance?
Start: 2010-10-01. End: 2014-09-27.
What is Peraton Inc.'s track record with similar Time and Materials (T&M) contracts, particularly with the Department of Defense?
Peraton Inc. has a significant history of performing government contracts, including those utilizing Time and Materials (T&M) pricing structures. Analyzing their past performance on similar DoD contracts would involve reviewing contract databases for awards of comparable size and scope. Key metrics to examine would include any instances of cost overruns, contract modifications, performance issues, or favorable outcomes. A review of their financial stability and past performance ratings from agencies like the DoD would provide further insight into their reliability and capability in managing T&M contracts effectively. Without specific data on this contract's performance history, a general assessment relies on their broader contracting record.
How does the $92.7 million total contract value compare to other wired telecommunications contracts awarded by the Department of the Army during the 2010-2014 period?
The $92.7 million total contract value for this wired telecommunications contract awarded to Peraton Inc. by the Department of the Army between 2010 and 2014 represents a substantial investment. To benchmark this value, one would need to compare it against other contracts within the same NAICS code (517110) or similar telecommunications service categories awarded by the Army during that timeframe. Federal procurement data often reveals a wide range of contract values, influenced by factors like scope, duration, and technological requirements. A value of approximately $23 million per year (based on the 4-year duration) is significant but not necessarily an outlier for large-scale federal telecommunications infrastructure support. A detailed comparison would require analyzing the average, median, and maximum contract values for similar services procured by the Army in that period.
What are the primary risks associated with a Time and Materials (T&M) contract of this magnitude and duration for wired telecommunications services?
The primary risks associated with a Time and Materials (T&M) contract of this magnitude ($92.7M) and duration (nearly 4 years) for wired telecommunications services revolve around cost control and scope creep. T&M contracts pay the contractor for the actual labor hours and material costs incurred, plus a fixed fee or profit. This structure can incentivize longer task durations or higher labor rates if not meticulously managed. For the government, the risk is that costs could escalate beyond initial estimates if oversight is insufficient. Additionally, defining and controlling the 'scope' of work can be challenging, potentially leading to the contractor performing work not originally intended or priced. Ensuring robust oversight, clear task definitions, and regular audits are crucial mitigation strategies for these risks.
What specific telecommunications services were likely delivered under this contract, and how do they align with the Department of the Army's operational needs?
Given the NAICS code 517110 (Wired Telecommunications Carriers), this contract likely encompassed a range of services related to the installation, maintenance, and operation of wired communication networks. This could include provisioning of broadband internet, dedicated data lines, voice communication systems (like PBX or VoIP infrastructure), and potentially fiber optic network deployment and management. For the Department of the Army, such services are critical for maintaining command and control, facilitating administrative operations, supporting training exercises, and ensuring secure communication channels across various installations within Alabama. The sustained nature of the contract suggests a need for ongoing, reliable telecommunications infrastructure rather than short-term project support.
How has federal spending on wired telecommunications carriers (NAICS 517110) evolved since the completion of this contract in 2014?
Federal spending on wired telecommunications carriers (NAICS 517110) has likely seen significant evolution since the completion of this contract in 2014, driven by technological advancements and changing operational requirements. Post-2014, there has been a continued push towards higher bandwidth services, increased reliance on cloud-based infrastructure, and the expansion of secure network capabilities. Agencies have increasingly sought services that support mobility, advanced data analytics, and cybersecurity. While specific figures require detailed analysis of federal procurement data, it's probable that spending has shifted towards more integrated network solutions, managed services, and potentially a greater emphasis on fiber optic and next-generation network technologies, reflecting broader trends in the telecommunications industry.
Industry Classification
NAICS: Information › Wired and Wireless Telecommunications (except Satellite) › Wired Telecommunications Carriers
Product/Service Code: IT AND TELECOM - INFORMATION TECHNOLOGY AND TELECOMMUNICATIONS › ADP AND TELECOMMUNICATIONS
Competition & Pricing
Extent Competed: FULL AND OPEN COMPETITION
Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY
Solicitation ID: W91QUZ05R0004
Offers Received: 5
Pricing Type: TIME AND MATERIALS (Y)
Evaluated Preference: NONE
Contractor Details
Parent Company: L3harris Technologies, Inc
Address: 21000 ATLANTIC BLVD STE 300, DULLES, VA, 20166
Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business
Financial Breakdown
Contract Ceiling: $133,317,163
Exercised Options: $133,317,163
Current Obligation: $92,727,996
Subaward Activity
Number of Subawards: 122
Total Subaward Amount: $40,625,147
Contract Characteristics
Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED
Cost or Pricing Data: NO
Parent Contract
Parent Award PIID: W91QUZ07D0001
IDV Type: IDC
Timeline
Start Date: 2010-10-01
Current End Date: 2014-09-27
Potential End Date: 2014-09-27 00:00:00
Last Modified: 2025-12-31
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