DoD's $495M Network & Space Ops Contract with Peraton Faces Scrutiny Over Value and Competition
Contract Overview
Contract Amount: $495,333,881 ($495.3M)
Contractor: Peraton Inc.
Awarding Agency: Department of Defense
Start Date: 2008-01-11
End Date: 2016-11-21
Contract Duration: 3,237 days
Daily Burn Rate: $153.0K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 4
Pricing Type: FIXED PRICE INCENTIVE
Sector: IT
Official Description: MISSION SUPPORT FOR NETWORK AND SPACE OPERATIONS AND MAINTENANCE
Place of Performance
Location: COLORADO SPRINGS, EL PASO County, COLORADO, 80912
State: Colorado Government Spending
Plain-Language Summary
Department of Defense obligated $495.3 million to PERATON INC. for work described as: MISSION SUPPORT FOR NETWORK AND SPACE OPERATIONS AND MAINTENANCE Key points: 1. Significant contract value of $495M for mission support. 2. Competition method is 'Full and Open', suggesting broad market engagement. 3. Potential risks associated with long contract duration (3237 days). 4. Sector is IT/Defense, critical for national security operations.
Value Assessment
Rating: fair
The contract's value of $495M over its duration suggests a substantial investment. Benchmarking against similar network and space operations contracts is needed to assess if the pricing is competitive and reflects true value for the services rendered.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
The contract was awarded under full and open competition, which typically fosters competitive pricing. However, the long duration and specific nature of the services may limit the number of truly competitive bids received over time.
Taxpayer Impact: Taxpayer funds are being utilized for critical defense infrastructure. Ensuring competitive pricing and efficient service delivery is paramount to maximizing the value of this investment.
Public Impact
Ensures continuity of vital network and space operations for the Air Force. Supports national security by maintaining critical communication and operational capabilities. Potential for long-term reliance on a single contractor for essential services.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Long contract duration may reduce flexibility and increase costs over time.
- Lack of specific performance metrics makes value assessment difficult.
- Potential for vendor lock-in due to specialized nature of services.
Positive Signals
- Awarded through full and open competition.
- Supports critical national defense infrastructure.
- Fixed Price Incentive contract type can incentivize cost control.
Sector Analysis
This contract falls within the IT and Defense sector, specifically focusing on satellite telecommunications and network operations. Spending in this area is crucial for national security, with benchmarks often driven by technological advancements and the complexity of maintaining global communication networks.
Small Business Impact
The data does not indicate specific subcontracting opportunities for small businesses. Further analysis would be required to determine the extent of small business participation in this large contract.
Oversight & Accountability
Oversight is managed by the Department of the Air Force. The long duration of the contract necessitates robust oversight mechanisms to ensure performance, manage costs, and adapt to evolving technological requirements.
Related Government Programs
- Satellite Telecommunications
- Department of Defense Contracting
- Department of the Air Force Programs
Risk Flags
- Long contract duration may lead to cost inefficiencies and technological obsolescence.
- Lack of detailed performance metrics makes value assessment challenging.
- Potential for vendor lock-in due to specialized nature of services.
- Need for ongoing oversight to ensure continued cost-effectiveness and performance.
Tags
satellite-telecommunications, department-of-defense, co, definitive-contract, 100m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $495.3 million to PERATON INC.. MISSION SUPPORT FOR NETWORK AND SPACE OPERATIONS AND MAINTENANCE
Who is the contractor on this award?
The obligated recipient is PERATON INC..
Which agency awarded this contract?
Awarding agency: Department of Defense (Department of the Air Force).
What is the total obligated amount?
The obligated amount is $495.3 million.
What is the period of performance?
Start: 2008-01-11. End: 2016-11-21.
How does the total contract value of $495M compare to industry benchmarks for similar network and space operations and maintenance services over an equivalent period?
Benchmarking the $495M contract against similar DoD or commercial contracts for network and space operations and maintenance is crucial. Factors like contract scope, service level agreements, and technological complexity influence pricing. Without specific comparable data, it's difficult to definitively assess if this represents excellent value, but the long duration warrants careful scrutiny to ensure costs remain competitive throughout its term.
What are the primary risks associated with the long contract duration (3237 days) and how are they being mitigated?
The primary risks of a long contract duration include technological obsolescence, potential for cost overruns due to unforeseen changes, and reduced flexibility in adapting to new requirements. Mitigation strategies could involve robust contract modification clauses, regular performance reviews, and built-in mechanisms for technology refresh or service re-evaluation. The Fixed Price Incentive structure may also encourage cost efficiency.
To what extent does the 'Full and Open Competition' award method ensure optimal price discovery and value for taxpayer money over the contract's lifecycle?
Full and open competition is designed to maximize the number of potential bidders, theoretically leading to better price discovery and value. However, for highly specialized services like satellite telecommunications, the pool of qualified bidders might be limited. The long duration also means that initial competitive pricing might not reflect future market conditions or technological advancements, necessitating ongoing oversight to ensure continued value.
Industry Classification
NAICS: Information › Satellite Telecommunications › Satellite Telecommunications
Product/Service Code: SUPPORT SVCS (PROF, ADMIN, MGMT) › PROFESSIONAL SERVICES
Competition & Pricing
Extent Competed: FULL AND OPEN COMPETITION
Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE
Solicitation ID: FA255006R8003
Offers Received: 4
Pricing Type: FIXED PRICE INCENTIVE (L)
Evaluated Preference: NONE
Contractor Details
Parent Company: Veritas Capital Fund Management, L.L.C.
Address: 5009 CENTENNIAL BLVD, COLORADO SPRINGS, CO, 80919
Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business
Financial Breakdown
Contract Ceiling: $574,236,102
Exercised Options: $525,523,788
Current Obligation: $495,333,881
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: NO
Timeline
Start Date: 2008-01-11
Current End Date: 2016-11-21
Potential End Date: 2016-11-21 00:00:00
Last Modified: 2023-01-20
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