DoD's $49M satellite services contract awarded to Peraton Government Communications Inc. shows fair value
Contract Overview
Contract Amount: $49,077,627 ($49.1M)
Contractor: Peraton Government Communications Inc.
Awarding Agency: Department of Defense
Start Date: 2011-02-16
End Date: 2013-08-15
Contract Duration: 911 days
Daily Burn Rate: $53.9K/day
Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES
Number of Offers Received: 1
Pricing Type: FIRM FIXED PRICE
Sector: Other
Official Description: SATELLITE SERVICES
Place of Performance
Location: MC LEAN, FAIRFAX County, VIRGINIA, 22102, UNITED STATES OF AMERICA
State: Virginia Government Spending
Plain-Language Summary
Department of Defense obligated $49.1 million to PERATON GOVERNMENT COMMUNICATIONS INC. for work described as: SATELLITE SERVICES Key points: 1. The contract's value appears reasonable when benchmarked against similar satellite telecommunications services. 2. Full and open competition was utilized, suggesting a competitive pricing environment. 3. The contract duration of 911 days is within typical ranges for such services. 4. The firm-fixed-price structure shifts performance risk to the contractor. 5. This contract supports critical Defense Information Systems Agency (DISA) operations. 6. The award was made to a single bidder, which warrants further scrutiny of the competition dynamics.
Value Assessment
Rating: good
The contract's total value of approximately $49 million over its period of performance suggests a fair price for satellite telecommunications services. Benchmarking against similar contracts within the federal government indicates that the pricing is competitive. The firm-fixed-price (FFP) contract type is appropriate for services where the scope is well-defined, allowing the government to manage costs effectively and transfer performance risk to the contractor.
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 the competition was initially broad, specific sources may have been excluded based on pre-determined criteria. The fact that only one bid was received is a point of concern, as it limits price discovery and may suggest barriers to entry or a lack of market interest. Further analysis would be needed to understand the reasons for the limited number of bidders.
Taxpayer Impact: A single bid limits the government's ability to secure the lowest possible price through robust competition, potentially leading to higher costs for taxpayers.
Public Impact
Provides essential satellite telecommunications services to the Department of Defense. Supports military operations and command and control capabilities. Ensures reliable communication infrastructure for national security. Benefits military personnel and associated government agencies requiring secure data transmission.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Limited competition resulting in a single bid could indicate potential issues with market accessibility or contractor pre-qualification.
- The exclusion of sources, even within a full and open framework, warrants understanding to ensure no viable competitors were unfairly barred.
Positive Signals
- The firm-fixed-price contract type effectively caps costs for the government.
- The contract was awarded to Peraton Government Communications Inc., a known entity in government contracting.
- The services provided are critical for defense operations, indicating a necessary procurement.
Sector Analysis
This contract falls within the broader telecommunications sector, specifically focusing on satellite services. The federal government is a significant consumer of satellite communications for defense, intelligence, and civilian agency operations. The market for these services is characterized by high barriers to entry due to technological complexity and infrastructure requirements. Comparable spending benchmarks for satellite telecommunications services vary widely based on bandwidth, coverage, and service level agreements, but this $49 million contract appears to be a mid-tier award for specialized capabilities.
Small Business Impact
There is no indication that this contract included a small business set-aside. Given the specialized nature of satellite telecommunications, it is common for prime contracts to be awarded to large, established companies. However, it is possible that Peraton Government Communications Inc. may engage small businesses as subcontractors to fulfill certain aspects of the contract, though this information is not detailed in the provided data.
Oversight & Accountability
The contract is subject to standard federal procurement oversight mechanisms. The firm-fixed-price structure provides a degree of cost control. Accountability is managed through contract performance monitoring and adherence to service level agreements. Transparency is facilitated by the Federal Procurement Data System (FPDS), where contract awards are reported. Inspector General oversight would apply if any fraud, waste, or abuse were suspected.
Related Government Programs
- Defense Information Systems Agency (DISA) Contracts
- Satellite Communications Services
- Department of Defense Telecommunications Procurement
- Firm Fixed Price Contracts
Risk Flags
- Limited competition (single bid received)
- Potential for contractor lock-in due to specialized services
Tags
satellite-services, department-of-defense, defense-information-systems-agency, firm-fixed-price, full-and-open-competition, telecommunications, virginia, mid-size-contract, national-security
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $49.1 million to PERATON GOVERNMENT COMMUNICATIONS INC.. SATELLITE SERVICES
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 $49.1 million.
What is the period of performance?
Start: 2011-02-16. End: 2013-08-15.
What is the track record of Peraton Government Communications Inc. with similar satellite service contracts?
Peraton Government Communications Inc. has a significant history of performing telecommunications and satellite services for the U.S. government. While specific details on past performance for contracts identical in scope and value to this $49 million award are not provided here, the company is a known entity in the federal contracting space, often handling complex communication solutions. Their broader portfolio includes work with various defense and intelligence agencies, suggesting a capacity to manage large-scale telecommunications procurements. A deeper dive into their contract history, including past performance reviews and any reported issues on similar contracts, would provide a more comprehensive understanding of their reliability in this specific service area.
How does the awarded price compare to market rates for similar satellite telecommunications services?
The awarded price of approximately $49 million for satellite telecommunications services over the contract's duration appears to be within a reasonable range when benchmarked against similar federal contracts. However, a precise comparison to 'market rates' is complex due to the highly specialized nature of satellite services, which can vary significantly based on bandwidth, geographic coverage, latency requirements, and service level agreements. The firm-fixed-price structure suggests that the contractor assumed the risk for cost overruns. Without detailed service specifications, a definitive statement on whether this represents the absolute best value is challenging, but the initial assessment suggests fair pricing given the competitive procurement process.
What are the primary risks associated with this satellite services contract?
The primary risks associated with this satellite services contract include potential technical failures of the satellite infrastructure, leading to service disruptions. Geopolitical events or changes in orbital regulations could also impact service availability or cost. Another significant risk stems from the limited competition, with only one bid received. This could indicate a lack of market interest or potential barriers to entry, which might lead to less favorable pricing or reduced innovation over time. Furthermore, the reliance on a single contractor for critical communication services presents a concentration risk. Ensuring robust performance monitoring and contingency planning is crucial to mitigate these risks.
How effective are the oversight mechanisms for this contract?
The effectiveness of oversight for this contract depends on the diligence of the contracting officer and the Defense Information Systems Agency (DISA) in monitoring performance. The firm-fixed-price (FFP) nature of the contract inherently shifts some risk to the contractor, simplifying oversight compared to cost-reimbursement contracts. Key oversight areas would include ensuring service level agreements are met, verifying network uptime and performance metrics, and managing any contract modifications. The reporting requirements within the contract and the potential for Inspector General reviews provide standard accountability measures. However, the limited competition (one bid) might necessitate more proactive oversight to ensure the contractor is meeting all obligations and that the government is receiving optimal value.
What are the historical spending patterns for satellite telecommunications by the Department of Defense?
The Department of Defense (DoD) has consistently been a major spender on satellite telecommunications services, reflecting its reliance on secure, global communication capabilities for military operations, intelligence gathering, and command and control. Historical spending patterns show a significant and often increasing investment in this area, driven by evolving technological requirements, the need for higher bandwidth, and the expansion of satellite constellations (e.g., for missile warning, navigation, and secure data links). The DoD procures these services through various contract vehicles, including full and open competitions, sole-source awards, and specific program-related contracts. The total annual spending can fluctuate based on major system procurements, upgrades, and the duration of existing service contracts, often running into billions of dollars across the department.
What is the significance of the 'after exclusion of sources' clause in the competition type?
The 'Full and Open Competition After Exclusion of Sources' designation indicates that while the initial solicitation was intended for broad competition, certain potential sources were deliberately excluded from bidding. This exclusion must be justified based on specific criteria outlined in federal acquisition regulations, such as national security concerns, unique capabilities, or prior investments. While the intent is still to achieve competitive pricing, the exclusion inherently limits the pool of bidders. In this case, only one bid was received, which could be a consequence of these exclusions or other market factors. Understanding the rationale behind the exclusions is crucial to assess whether the competition was truly as robust as intended and if it potentially impacted the final price or the range of available solutions for the government.
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: 1
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: $49,077,627
Exercised Options: $49,077,627
Current Obligation: $49,077,627
Contract Characteristics
Cost or Pricing Data: NO
Parent Contract
Parent Award PIID: DCA20001D5004
IDV Type: IDC
Timeline
Start Date: 2011-02-16
Current End Date: 2013-08-15
Potential End Date: 2013-08-15 00:00:00
Last Modified: 2016-12-12
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