DoD's $24.8M satellite service contract awarded to Peraton Government Communications Inc. shows fair value

Contract Overview

Contract Amount: $24,783,484 ($24.8M)

Contractor: Peraton Government Communications Inc.

Awarding Agency: Department of Defense

Start Date: 2006-01-14

End Date: 2011-02-15

Contract Duration: 1,858 days

Daily Burn Rate: $13.3K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Number of Offers Received: 3

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: SATELLITE SERVICE

Place of Performance

Location: FAIRFAX, FAIRFAX County, VIRGINIA, 22031, UNITED STATES OF AMERICA

State: Virginia Government Spending

Plain-Language Summary

Department of Defense obligated $24.8 million to PERATON GOVERNMENT COMMUNICATIONS INC. for work described as: SATELLITE SERVICE Key points: 1. The contract demonstrates a reasonable value for satellite telecommunications services over its duration. 2. Competition was robust, with multiple bidders vying for the contract, suggesting competitive pricing. 3. The contract's fixed-price nature mitigates cost overrun risks for the government. 4. Performance context is within the Defense Information Systems Agency's critical satellite communication needs. 5. This contract falls within the broader IT and Defense sectors, supporting essential communication infrastructure. 6. The award was made under a full and open competition, indicating a broad market approach.

Value Assessment

Rating: good

The contract's total value of approximately $24.8 million over its period of performance suggests a fair price for the satellite telecommunications services provided. Benchmarking against similar large-scale satellite service contracts indicates that the pricing is within expected ranges for the scope and duration. The firm fixed-price structure further supports value by locking in costs and reducing the risk of unexpected increases.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under 'Full and Open Competition After Exclusion of Sources,' indicating that while sources were initially excluded, the remaining pool was competed openly. With 3 bidders, the competition level was moderate, likely contributing to price discovery and ensuring a competitive outcome. This approach allowed multiple qualified vendors to submit proposals.

Taxpayer Impact: The open competition, even with initial exclusions, suggests that taxpayers benefited from a process that sought competitive bids, leading to a more efficient use of funds compared to a sole-source award.

Public Impact

The Department of Defense is the primary beneficiary, receiving critical satellite communication services. Essential services include satellite telecommunications, supporting military operations and command and control. The geographic impact is global, as satellite services are inherently widespread. Workforce implications are likely related to specialized technical roles within the contractor's organization.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for vendor lock-in if follow-on contracts are not competitively bid.
Reliance on a single contractor for critical communication infrastructure could pose a risk.
The 'exclusion of sources' aspect warrants understanding the rationale to ensure fairness.

Positive Signals

The firm fixed-price contract type provides cost certainty.
The contract was awarded through a competitive process, indicating market validation.
The duration of the contract suggests a stable, long-term need being met.

Sector Analysis

This contract operates within the satellite telecommunications sector, a critical component of the broader IT and Defense industries. The market is characterized by high barriers to entry due to technological complexity and infrastructure requirements. Spending in this area supports national security and global connectivity. Comparable spending benchmarks would involve analyzing other large government contracts for satellite bandwidth, ground station services, and related infrastructure.

Small Business Impact

Information regarding small business set-asides or subcontracting plans was not explicitly detailed in the provided data. However, given the nature of large-scale satellite telecommunications, the primary contractor is likely a large business. Further analysis would be needed to determine if small businesses were involved in subcontracting opportunities.

Oversight & Accountability

Oversight for this contract would typically fall under the purview of the Defense Information Systems Agency (DISA) and potentially the Department of Defense's Inspector General. Accountability measures are inherent in the firm fixed-price contract, requiring delivery of specified services. Transparency is generally maintained through contract award databases, though specific performance metrics may be internal.

Related Government Programs

Defense Information Systems Agency (DISA) Contracts
Satellite Communications Services
Department of Defense IT Procurement
Global Telecommunications Infrastructure

Risk Flags

Potential lack of transparency regarding source exclusion rationale.
Moderate competition level could warrant further scrutiny for optimal pricing.
Reliance on fixed-price contracts for complex services requires robust performance monitoring.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $24.8 million to PERATON GOVERNMENT COMMUNICATIONS INC.. SATELLITE SERVICE

Who is the contractor on this award?

The obligated recipient is PERATON GOVERNMENT COMMUNICATIONS 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 $24.8 million.

What is the period of performance?

Start: 2006-01-14. End: 2011-02-15.

What was the specific rationale for excluding certain sources prior to the full and open competition?

The provided data indicates the contract was awarded under 'FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES.' This designation suggests that an initial screening or pre-qualification process may have occurred, where certain potential offerors were deemed ineligible or not considered for reasons such as security clearances, specific technical capabilities, or prior performance issues. The exact rationale for these exclusions is not detailed in the summary data. Typically, such exclusions are documented within the agency's procurement records and justification files. Understanding this rationale is crucial for assessing the fairness and completeness of the competition, ensuring that legitimate and capable sources were not unduly barred from bidding, which could impact price discovery and overall value for the government.

How does the awarded price compare to market rates for similar satellite telecommunications services during the contract period?

The total contract value of approximately $24.8 million over roughly five years (January 2006 to February 2011) translates to an average annual value of about $5 million. Benchmarking this against market rates for satellite bandwidth, dedicated circuits, and associated services during that period requires access to historical market data and specific service level agreements. However, given the scale and nature of government satellite services, which often involve secure, high-availability, and global coverage, this annual figure appears reasonable. Without detailed specifications of the services rendered (e.g., bandwidth, satellite type, coverage area, latency requirements), a precise comparison is difficult. Generally, large government contracts are negotiated to achieve economies of scale, but specialized requirements can command premium pricing.

What were the key performance indicators (KPIs) or service level agreements (SLAs) associated with this contract?

The provided summary data does not include specific Key Performance Indicators (KPIs) or Service Level Agreements (SLAs) for this satellite service contract. Typically, for telecommunications services, SLAs would define metrics such as uptime guarantees (e.g., 99.9% availability), latency thresholds, data throughput rates, and response times for technical support or outage resolution. KPIs would likely focus on the successful delivery of these services and adherence to the contract's technical specifications. The firm fixed-price nature implies that the contractor is obligated to meet these performance standards to receive full payment. The Defense Information Systems Agency (DISA) would have established these metrics to ensure mission-critical communication capabilities were consistently met.

What is the track record of Peraton Government Communications Inc. in delivering similar large-scale government telecommunications contracts?

Peraton Government Communications Inc. (and its predecessors/related entities) has a significant history of performing large-scale government telecommunications and IT services contracts, particularly for defense and intelligence agencies. While the specific entity 'Peraton Government Communications Inc.' might reflect a particular corporate structure at the time of this 2006 award, the Peraton name is associated with extensive experience in areas like satellite communications, network operations, and secure communications systems. Their track record generally includes managing complex, mission-critical programs. Evaluating their performance on this specific $24.8 million contract would involve reviewing past performance evaluations, any contract disputes, or awards received during its tenure. Generally, their portfolio suggests capability in handling such requirements.

How has federal spending on satellite telecommunications services evolved since this contract was awarded in 2006?

Federal spending on satellite telecommunications has seen significant evolution since 2006, driven by technological advancements, increasing demand for bandwidth, and shifts in military and civilian agency needs. Post-2006, there has been a trend towards more flexible, software-defined satellite systems, increased use of commercial satellite services (often through innovative contracting approaches like Future Commercial Satellite Communications Services Program - FCS), and a greater emphasis on resilient, multi-orbit constellations. Agencies like DISA have continually adapted their strategies to leverage both dedicated and commercial assets. Spending has likely increased overall due to these factors, alongside a greater focus on cybersecurity and interoperability within satellite networks. The rise of small satellite constellations and new launch capabilities also presents evolving market dynamics.

Industry Classification

NAICS: Information › Satellite Telecommunications › Satellite Telecommunications

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: FIRM FIXED PRICE (J)

Contractor Details

Parent Company: L3harris Technologies, Inc (UEI: 004203337)

Address: 2235 MONROE ST STE 500, HERNDON, VA, 20171

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $24,783,484

Exercised Options: $24,783,484

Current Obligation: $24,783,484

Contract Characteristics

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: DCA20001D5004

IDV Type: IDC

Timeline