DoD Awards $232M Satellite Telecommunications Contract to Peraton Inc. Under Full and Open Competition
Contract Overview
Contract Amount: $232,186,000 ($232.2M)
Contractor: Peraton Inc.
Awarding Agency: Department of Defense
Start Date: 2000-04-28
End Date: 2013-09-30
Contract Duration: 4,903 days
Daily Burn Rate: $47.4K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 3
Pricing Type: COST PLUS INCENTIVE FEE
Sector: Defense
Place of Performance
Location: HERNDON, FAIRFAX County, VIRGINIA, 20170
State: Virginia Government Spending
Plain-Language Summary
Department of Defense obligated $232.2 million to PERATON INC. for work described as: Key points: 1. Significant contract value of $232.2 million awarded. 2. Full and open competition indicates a potentially competitive bidding process. 3. Contract type is Cost Plus Incentive Fee, which can lead to cost overruns if not managed closely. 4. The sector is Defense, specifically satellite telecommunications, a critical area for national security.
Value Assessment
Rating: fair
The Cost Plus Incentive Fee (CPIF) contract type allows for shared savings and cost overruns, making direct pricing assessment challenging without detailed performance data. The award value of $232.2 million is substantial, but its value proposition depends heavily on the delivered capabilities and operational effectiveness.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
The contract was awarded under full and open competition, suggesting multiple bidders participated. This method generally promotes price discovery and can lead to more competitive pricing, although the CPIF structure introduces complexity in final cost determination.
Taxpayer Impact: Taxpayer impact is moderate, with potential for cost efficiencies through incentive fees, but also risk of increased costs if performance targets are not met or if cost overruns occur.
Public Impact
Ensures continued satellite telecommunications capabilities for the Department of Defense. Supports critical national security operations and communication infrastructure. Potential for technological advancements in satellite communication services.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Cost Plus Incentive Fee structure carries inherent risk of cost escalation.
- Long contract duration (over 12 years) increases exposure to changing technologies and market conditions.
- Lack of specific performance metrics makes it difficult to assess value for money.
Positive Signals
- Awarded under full and open competition, suggesting a robust bidding process.
- Contract addresses a critical defense need for satellite telecommunications.
- Incentive fee structure aims to align contractor and government interests.
Sector Analysis
The defense sector, particularly satellite telecommunications, is characterized by high technological complexity and significant investment. Spending benchmarks are difficult to establish due to the specialized nature of services, but contracts of this magnitude typically involve extensive research, development, and operational support.
Small Business Impact
The data does not indicate any specific provisions or set-asides for small businesses in this contract. Given the scale and nature of satellite telecommunications, it is likely that larger, specialized firms dominated the bidding process.
Oversight & Accountability
Oversight would typically be managed by the Defense Contract Management Agency (DCMA) to ensure contract compliance, performance, and financial accountability. The CPIF structure necessitates close monitoring of costs and performance incentives to ensure taxpayer value.
Related Government Programs
- Satellite Telecommunications
- Department of Defense Contracting
- Defense Contract Management Agency Programs
Risk Flags
- Cost overrun potential due to CPIF.
- Long contract duration leading to technology obsolescence risk.
- Lack of specific performance metrics for value assessment.
- Potential for contractor to prioritize profit over optimal cost control.
- Dependence on a single contractor for critical communication infrastructure.
Tags
satellite-telecommunications, department-of-defense, va, definitive-contract, 100m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $232.2 million to PERATON INC.. See the official description on USAspending.
Who is the contractor on this award?
The obligated recipient is PERATON INC..
Which agency awarded this contract?
Awarding agency: Department of Defense (Defense Contract Management Agency).
What is the total obligated amount?
The obligated amount is $232.2 million.
What is the period of performance?
Start: 2000-04-28. End: 2013-09-30.
What specific satellite telecommunications services were procured, and how do they align with current and future DoD operational requirements?
The contract for Satellite Telecommunications (NAICS 517410) likely encompasses a range of services including satellite bandwidth, ground station operations, network management, and potentially specialized communication solutions. These services are crucial for global command and control, intelligence gathering, and force projection. Alignment with future requirements would depend on the contract's flexibility to adapt to evolving threats and technological advancements in areas like secure communications and high-throughput satellite systems.
How effectively did the incentive fee structure manage costs and drive performance given the CPIF contract type?
The effectiveness of the CPIF structure hinges on the clarity and achievability of the target cost and incentive goals. Without detailed performance reports and final cost data, it's difficult to assess. Ideally, it should have encouraged Peraton Inc. to control costs below the target while meeting or exceeding performance benchmarks, leading to shared savings. However, CPIF can also incentivize higher spending if targets are poorly defined or if the government accepts cost overruns without sufficient justification.
What was the competitive landscape like for this $232 million contract, and did full and open competition truly yield the best value?
Full and open competition suggests a healthy bidding environment, potentially involving multiple established players in the satellite communications market. The 'best value' is determined by comparing technical proposals, past performance, and price. While competition generally drives down price, the CPIF nature means the final cost is variable. Assessing 'best value' requires a post-award analysis of whether the chosen contractor delivered superior capabilities and performance at a justifiable cost compared to other bidders.
Industry Classification
NAICS: Information › Satellite Telecommunications › Satellite Telecommunications
Product/Service Code: OPERATION OF GOVT OWNED FACILITY › OPERATE GOVT OWNED BUILDINGS
Competition & Pricing
Extent Competed: FULL AND OPEN COMPETITION
Offers Received: 3
Pricing Type: COST PLUS INCENTIVE FEE (V)
Contractor Details
Parent Company: Veritas Capital Fund Management, L.L.C. (UEI: 078628925)
Address: 12975 WORLDGATE STE 7322, HERNDON, VA, 20170
Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business, Special Designations, U.S.-Owned Business
Contract Characteristics
Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED
Cost or Pricing Data: NO
Timeline
Start Date: 2000-04-28
Current End Date: 2013-09-30
Potential End Date: 2013-09-30 00:00:00
Last Modified: 2018-10-05
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