DoD's $35.8M R&D contract with Peraton Inc. for critical functions shows fair value despite limited competition
Contract Overview
Contract Amount: $35,819,367 ($35.8M)
Contractor: Peraton Inc.
Awarding Agency: Department of Defense
Start Date: 2015-03-14
End Date: 2020-11-20
Contract Duration: 2,078 days
Daily Burn Rate: $17.2K/day
Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES
Number of Offers Received: 3
Pricing Type: COST PLUS FIXED FEE
Sector: R&D
Official Description: IGF::CT::IGF CRITICAL FUNCTIONS
Place of Performance
Location: FORT GEORGE G MEADE, ANNE ARUNDEL County, MARYLAND, 20755
State: Maryland Government Spending
Plain-Language Summary
Department of Defense obligated $35.8 million to PERATON INC. for work described as: IGF::CT::IGF CRITICAL FUNCTIONS Key points: 1. The contract's value appears reasonable when benchmarked against similar R&D efforts, suggesting adequate price discovery. 2. Competition was limited, raising questions about whether the government secured the best possible pricing. 3. The contract's duration and cost-plus-fixed-fee structure present moderate performance and cost overrun risks. 4. This contract supports critical functions within the Defense Information Systems Agency, aligning with national security objectives. 5. The R&D sector for physical and engineering sciences is highly specialized, with significant barriers to entry for new contractors.
Value Assessment
Rating: fair
The $35.8 million contract value for Research and Development in Physical, Engineering, and Life Sciences appears within a reasonable range when compared to similar government R&D contracts. The cost-plus-fixed-fee (CPFF) pricing structure, while offering flexibility for evolving research needs, can sometimes lead to higher overall costs compared to fixed-price contracts if not managed diligently. Benchmarking the fixed fee component against industry standards for similar CPFF contracts would provide a clearer picture of value for money.
Cost Per Unit: N/A
Competition Analysis
Competition Level: limited
This contract was awarded under 'FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES,' indicating that while a competitive process was intended, certain sources were excluded. With only 3 bidders, the level of competition was limited. This suggests that the pool of qualified contractors for this specific R&D requirement may be small, potentially impacting the government's ability to achieve the most competitive pricing.
Taxpayer Impact: Limited competition can result in higher prices for taxpayers as the government may not benefit from the full range of pricing strategies that a broader competitive field would offer.
Public Impact
The primary beneficiaries are the Department of Defense and its components, which receive enhanced capabilities for critical functions. Services delivered include advanced research and development in physical and engineering sciences, contributing to technological superiority. The geographic impact is primarily within the United States, supporting national defense infrastructure. Workforce implications include highly skilled R&D professionals and engineers employed by the contractor.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Cost-plus-fixed-fee contracts can incentivize higher spending if not closely monitored.
- Limited competition may lead to suboptimal pricing for the government.
- The specialized nature of R&D can make performance monitoring complex.
Positive Signals
- Contract supports critical defense functions, aligning with national security priorities.
- Awarded to a known entity (Peraton Inc.) with a track record in defense contracting.
- The fixed fee component provides some cost certainty for the government.
Sector Analysis
The Research and Development in Physical, Engineering, and Life Sciences sector is a critical area for government investment, particularly within defense. This contract falls under NAICS code 541712. The market is characterized by high barriers to entry due to specialized knowledge, significant capital investment, and stringent security requirements. Comparable spending benchmarks in this R&D sub-sector often involve multi-year, high-value contracts awarded to a limited number of specialized firms.
Small Business Impact
The data indicates this contract was not set aside for small businesses (ss: false, sb: false). Given the specialized nature of the R&D requirement and the limited competition observed, it is unlikely that significant subcontracting opportunities for small businesses were mandated or realized under this specific award. The focus was likely on specialized technical expertise rather than broad market participation.
Oversight & Accountability
Oversight for this contract would typically be managed by the contracting officer's representative (COR) within the Defense Information Systems Agency. The cost-plus-fixed-fee structure necessitates rigorous financial oversight to ensure costs are allowable, allocable, and reasonable. Transparency is generally maintained through contract reporting mechanisms, though specific details of R&D progress may be sensitive. Inspector General jurisdiction would apply in cases of suspected fraud, waste, or abuse.
Related Government Programs
- Department of Defense Research and Development Contracts
- Defense Information Systems Agency IT and R&D Spending
- Cost-Plus-Fixed-Fee Contracts
- Research and Development in Physical Sciences
- Critical Defense Function Support Contracts
Risk Flags
- Limited Competition
- Cost-Plus-Fixed-Fee Structure
- Potential for Cost Overruns
- Exclusion of Sources Justification
Tags
defense, department-of-defense, research-and-development, physical-engineering-life-sciences, cost-plus-fixed-fee, limited-competition, peraton-inc, defense-information-systems-agency, delivery-order, maryland, critical-functions
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $35.8 million to PERATON INC.. IGF::CT::IGF CRITICAL FUNCTIONS
Who is the contractor on this award?
The obligated recipient is PERATON INC..
Which agency awarded this contract?
Awarding agency: Department of Defense (Defense Information Systems Agency).
What is the total obligated amount?
The obligated amount is $35.8 million.
What is the period of performance?
Start: 2015-03-14. End: 2020-11-20.
What is Peraton Inc.'s track record with similar R&D contracts for the Department of Defense?
Peraton Inc. has a significant history of performing complex R&D and IT services for the Department of Defense and other federal agencies. While specific details on all their R&D contracts are extensive, their portfolio often includes work on advanced technologies, systems integration, and mission support. Analyzing their past performance on cost-plus-fixed-fee contracts, particularly those involving specialized scientific research, would be crucial. This includes examining metrics like on-time delivery, budget adherence, and technical success rates. Their ability to secure this $35.8 million contract suggests a demonstrated capability and a positive performance history in areas relevant to critical defense functions.
How does the $35.8 million contract value compare to other R&D contracts in physical and engineering sciences?
The $35.8 million contract value for R&D in physical and engineering sciences is a substantial, but not extraordinary, figure within the defense sector. Contracts in this domain can range from a few million to hundreds of millions of dollars, depending on the scope, duration, and technological complexity. Given that this contract supported 'critical functions' and was awarded by DISA, it likely involved specialized research. Benchmarking against similar contracts awarded by DISA or other DoD components for R&D in related fields (e.g., advanced materials, cyber R&D, sensor technology) would reveal if this price point is competitive. The limited competition (3 bidders) might suggest a higher price than if there were more participants, but the specialized nature of the work could justify the investment.
What are the primary risks associated with this Cost Plus Fixed Fee (CPFF) contract structure?
The primary risk with a Cost Plus Fixed Fee (CPFF) contract is the potential for cost overruns. While the fixed fee provides a defined profit margin for the contractor, the government bears the risk of all allowable and allocable costs exceeding the initial estimate. This structure is often used when the scope of work is uncertain or likely to evolve, as is common in R&D. Effective oversight is critical to manage this risk. The government must diligently monitor expenditures, ensure costs are reasonable and directly related to the contract's objectives, and manage scope changes carefully. If not managed properly, CPFF contracts can become more expensive than fixed-price alternatives.
How effective is the 'FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES' in ensuring value for money?
The effectiveness of 'FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES' in ensuring value for money is variable and depends heavily on the justification for excluding sources. If sources are excluded based on legitimate, documented requirements (e.g., specific security clearances, unique patented technology, or highly specialized expertise not widely available), then the competition, though limited, might still yield good value. However, if sources are excluded without strong justification, it can artificially limit competition, potentially leading to higher prices and reduced innovation. In this case, with only three bidders, the government must ensure the exclusion criteria were robust and that the resulting competition was sufficient to drive a fair price.
What are the implications of awarding this contract to Peraton Inc. for the broader defense R&D ecosystem?
Awarding this $35.8 million R&D contract to Peraton Inc. signifies continued investment in specialized defense capabilities and reinforces Peraton's position as a key contractor in this niche. It suggests that Peraton possesses the necessary technical expertise and infrastructure to handle complex research and development projects critical to national security. For the broader ecosystem, it highlights the ongoing demand for advanced technological solutions within the DoD. It may also influence future R&D investments and procurement strategies, potentially encouraging other firms to develop similar capabilities or partnerships to compete for future contracts of this nature. The specific R&D outcomes could lead to technological advancements benefiting various defense applications.
What historical spending patterns exist for similar R&D contracts under DISA?
Historical spending patterns for similar R&D contracts under the Defense Information Systems Agency (DISA) often show a trend of significant investment in areas supporting command, control, communications, computers, and intelligence (C4I) capabilities. DISA frequently procures services related to network modernization, cybersecurity research, data analytics, and advanced systems development. Contracts in the R&D space, particularly those involving physical and engineering sciences (NAICS 541712), can be substantial, often awarded through competitive processes but sometimes involving specialized firms due to the unique requirements. Analyzing DISA's historical contract awards for R&D over the past 5-10 years would reveal average contract values, typical durations, and the prevalence of different contract types like CPFF, providing context for this specific $35.8 million award.
Industry Classification
NAICS: Professional, Scientific, and Technical Services › Scientific Research and Development Services › Research and Development in the Physical, Engineering, and Life Sciences (except Biotechnology)
Product/Service Code: IT AND TELECOM - INFORMATION TECHNOLOGY AND TELECOMMUNICATIONS › ADP AND TELECOMMUNICATIONS
Competition & Pricing
Extent Competed: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES
Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY
Offers Received: 3
Pricing Type: COST PLUS FIXED FEE (U)
Evaluated Preference: NONE
Contractor Details
Address: 12975 WORLDGATE DR, HERNDON, VA, 20170
Business Categories: Category Business, Corporate Entity Not Tax Exempt, Small Business, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $35,819,367
Exercised Options: $35,819,367
Current Obligation: $35,819,367
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: NO
Parent Contract
Parent Award PIID: HC102808D2012
IDV Type: IDC
Timeline
Start Date: 2015-03-14
Current End Date: 2020-11-20
Potential End Date: 2020-11-20 00:00:00
Last Modified: 2025-01-29
More Contracts from Peraton Inc.
- 200107!000034!5700!GZ80 !smc/Pks !F0470101C0001 !A!N!*!Y! !20001103!20061031!052819732!052819732!001216845!n!itt Industries, Inc , Systems !4410 E Fountain Blvd !colorado Sprin !co!80916!16000!041!08!colorado Springs !EL Paso !colorado !+000016429445!n!n!000000000000!ac26!rdte/Missile and Space Systems-Mgmt Support !A2 !missile and Space Systems !3000!NOT Discernable or Classified !541710!*!*!3! ! ! !*!*!*!B!*!*!B! !A !Y!R!2!003!B! !A!N!Z! ! !N!C!N! ! ! !c!c!a!a!000!a!c!n! ! ! !Y! ! !0001! — $1.7B (Department of Defense)
- THE Exploration and Space Communications Projects Division (ESC) IS a National Resource Located AT Goddard Space Flight Center (gsfc) Which Enables Scientific Discovery and Space Exploration by Providing Innovative and Mission-Effective Space Communications and Navigation Solutions to a Large Community of Diverse Customers. ESC Manages Operational Geostationary Communications Relay Satellites and Ground Systems for the Space Communications and Navigation (scan) Program AT Nasa Headquarters. Today, Scan Network Systems Consist of the Space Network (SN), the Near Earth Network (NEN), and the Deep Space Network (DSN). the Day-To-Day Management of These Three Networks IS Currently NOT Fully Consistent. IT IS the Intention of the Government to Unify the SN and NEN Where Practicable Under This Contract Using Integrated, Common Management Practices and Network Solutions — $1.5B (National Aeronautics and Space Administration)
- Nasa Goddard Space Flight Center's (gsfc) Goal for the Space Communications Networks Services Contract (scns) IS to Enable Mission Success for Every Customer Using Scns Services. KEY Objectives of the Scns Contract ARE to Decrease Cost and Maintain or Improve Operational Efficiency and Reliability, While Maintaining an Acceptable Level of Risk and Providing for Safe Operation of the Missions. the Contractor Shall Implement a Safety, Health, and Mission Assurance Program That Provides a Safe and Healthy Work Environment, Minimizes Program Risk, and Maximizes Nasa Mission Success. the Contractor Shall BE Responsible and Accountable for Achieving the Required Results. Core Requirement Functions, Such AS Configuration Management, Quality Assurance, ETC. ARE Required to Support Idiq Task Orders. the Space Network (SN) IS Comprised of a Fleet of On-Orbit Tracking and Data Relay Satellites (tdrs) and Associated Ground Systems That Provide Telecommunications Services. the Nature of the SN Architecture, I.E., Extremely Large Capital Investment, Contractor Operated Facilities, Continuous 24X7 Requirements, ETC., Lends Itself to a Core Requirements Approach. the Ground Network (GN) Consists of an Orbital Tracking Network and the Satellite Laser Ranging Network. the Nature of the Ground Network Architecture, I.E., Diverse MIX of Commercial and Government Assets, Evolving Geographic and Technical Customer Requirements, and Legacy Systems, ETC. Lends Itself to an Idiq Approach. Other Activities, I.E., Very Long Baseline Interferometry Network Operations and Maintenance (O&M), Electronic System Test Laboratory, Requirements Development, Hardware and Software Development, ETC. ARE Best Suited to an Idiq Approach in the Resource-Constrained Environment That Nasa Operates in — $1.2B (National Aeronautics and Space Administration)
- Operational Planning Implementation and Assessment Services (opias) Base Award — $800.8M (General Services Administration)
- Sitec 3 EOM Provides Ussocom With O&M Services to Maintain Netops, Maintain Systems & Network Infrastructure, Provide END User & Common Device Support, Provide Configuration, Change, License, & Asset Mgmt. Conduct Training and Perform Imacs Services — $651.0M (General Services Administration)
Other Department of Defense Contracts
- Federal Contract — $51.3B (Humana Government Business Inc)
- Lrip LOT 12 Advance Acquisition Contract — $35.1B (Lockheed Martin Corporation)
- SSN 802 and 803 Long Lead Time Material — $34.7B (Electric Boat Corporation)
- 200204!008532!1700!AF600 !naval AIR Systems Command !N0001902C3002 !A!N! !N! !20011026!20120430!008016958!008016958!834951691!n!lockheed Martin Corporation !lockheed Blvd !fort Worth !tx!76108!27000!439!48!fort Worth !tarrant !texas !+000026000000!n!n!018981928201!ac15!rdte/Aircraft-Eng/Manuf Develop !a1a!airframes and Spares !2ama!jast/Jsf !336411!E! !3! ! ! ! ! !99990909!B! ! !A! !a!n!r!2!002!n!1a!a!n!z! ! !N!C!N! ! ! !a!a!a!a!000!a!c!n! ! ! !Y! !N00019!0001! — $34.2B (Lockheed Martin Corporation)
- KC-X Modernization Program — $32.0B (THE Boeing Company)