DoD's $41.4M Satellite Service Contract with Peraton Faces Scrutiny Over Value and Competition

Contract Overview

Contract Amount: $41,365,546 ($41.4M)

Contractor: Peraton Government Communications Inc.

Awarding Agency: Department of Defense

Start Date: 2006-10-26

End Date: 2010-01-25

Contract Duration: 1,187 days

Daily Burn Rate: $34.8K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Number of Offers Received: 4

Pricing Type: 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 $41.4 million to PERATON GOVERNMENT COMMUNICATIONS INC. for work described as: SATELLITE SERVICE Key points: 1. The contract awarded to Peraton Government Communications Inc. for satellite services represents a significant expenditure by the Department of Defense. 2. While the contract was awarded under 'Full and Open Competition After Exclusion of Sources,' the specifics of this exclusion warrant further investigation for potential competitive limitations. 3. The fixed-price contract structure aims to control costs, but the overall value and effectiveness of the satellite services need to be assessed against market benchmarks. 4. The Defense Information Systems Agency (DISA) is the primary agency involved, highlighting the critical role of secure communication infrastructure in defense operations.

Value Assessment

Rating: fair

The contract's total value of $41.4 million over its duration suggests a substantial investment. Benchmarking this against similar satellite telecommunication contracts is crucial to determine if the pricing is competitive and reflects fair market value.

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.' This specific designation implies that while competition was sought, certain sources were excluded, potentially limiting the breadth of competition and impacting price discovery.

Taxpayer Impact: The $41.4 million expenditure directly impacts taxpayer funds allocated to defense. Ensuring the best possible value was obtained through the competitive process is essential for responsible fiscal management.

Public Impact

Ensures critical satellite communication capabilities for Department of Defense operations. Supports national security by providing reliable telecommunications infrastructure. Potential for cost savings or overspending depending on the effectiveness of the competitive process and service delivery. Impacts the satellite telecommunications market through a significant government contract award.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Ambiguity in 'Exclusion of Sources' could mask reduced competition.
Lack of clear per-unit cost benchmark makes value assessment difficult.
Contract duration (1187 days) is substantial, increasing risk of price escalation or obsolescence.

Positive Signals

Fixed-price contract aims to provide cost certainty.
Awarded by a major defense agency, indicating strategic importance.
Long-term contract may offer stability for service provider.

Sector Analysis

The satellite telecommunications sector is vital for government operations, particularly defense, providing essential communication and data transfer capabilities. Spending benchmarks in this area are often high due to the specialized technology and infrastructure required. This contract represents a significant portion of spending within this niche.

Small Business Impact

There is no explicit indication of small business participation in this contract data. Further investigation would be needed to determine if small businesses were subcontracted or if opportunities were missed.

Oversight & Accountability

The contract's award and execution fall under the purview of the Department of Defense and DISA. Oversight would typically involve monitoring performance, adherence to contract terms, and financial accountability to ensure taxpayer funds are used effectively.

Related Government Programs

Satellite Telecommunications
Department of Defense Contracting
Defense Information Systems Agency Programs

Risk Flags

Potential for limited competition due to 'Exclusion of Sources'.
Lack of detailed performance metrics makes value assessment challenging.
Contract duration may lead to technology obsolescence.
No clear indication of small business subcontracting.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $41.4 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 $41.4 million.

What is the period of performance?

Start: 2006-10-26. End: 2010-01-25.

What specific criteria led to the exclusion of certain sources in this 'Full and Open Competition After Exclusion of Sources' award, and how did this impact the final price and service offering?

The exclusion of sources typically occurs when specific technical requirements, security clearances, or unique capabilities are mandated, and only a limited number of vendors can meet them. Understanding these criteria is vital to assess if the exclusion was justified or if it unduly restricted competition, potentially leading to a higher price than a truly open market would yield. This impacts the value proposition for the taxpayer by potentially foregoing more competitive bids.

How does the $41.4 million cost for 1187 days of satellite service compare to industry benchmarks for similar services, and what is the risk of cost overruns or underperformance?

Without specific service level agreements and technical details, a precise benchmark is difficult. However, $41.4 million over nearly 3.3 years averages over $12.5 million annually. This figure needs comparison against contracts for comparable bandwidth, coverage, and security features. The risk of cost overruns is mitigated by the fixed-price structure, but underperformance remains a concern if not rigorously monitored by DISA.

What is the strategic importance of this satellite service to the Department of Defense, and how effectively does it meet the agency's evolving communication needs?

Satellite services are fundamental for secure, global communication for military operations, intelligence gathering, and command and control, especially in areas lacking terrestrial infrastructure. The effectiveness hinges on the reliability, security, and bandwidth provided by Peraton. DISA's continued reliance suggests the service meets critical needs, but ongoing assessment is required to ensure it keeps pace with technological advancements and evolving mission requirements.

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: 4

Pricing Type: 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

Financial Breakdown

Contract Ceiling: $41,365,546

Exercised Options: $41,365,546

Current Obligation: $41,365,546

Contract Characteristics

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: DCA20001D5004

IDV Type: IDC

Timeline