DoD's $178M Air Force Secure Network Modernization contract awarded to Peraton Enterprise Solutions LLC

Contract Overview

Contract Amount: $177,876,594 ($177.9M)

Contractor: Peraton Enterprise Solutions LLC

Awarding Agency: Department of Defense

Start Date: 2019-05-23

End Date: 2025-09-29

Contract Duration: 2,321 days

Daily Burn Rate: $76.6K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: MODERNIZATION OF AIR FORCE SECURE NETWORK

Place of Performance

Location: CHANTILLY, FAIRFAX County, VIRGINIA, 20151

State: Virginia Government Spending

Plain-Language Summary

Department of Defense obligated $177.9 million to PERATON ENTERPRISE SOLUTIONS LLC for work described as: MODERNIZATION OF AIR FORCE SECURE NETWORK Key points: 1. Contract value of $177.9M over its period of performance. 2. Awarded under full and open competition, indicating a broad market search. 3. The contract is a delivery order under a larger indefinite-delivery/indefinite-quantity (IDIQ) vehicle. 4. Performance period spans from May 2019 to September 2025, covering over six years. 5. The primary service category is Wired Telecommunications Carriers (NAICS 517110). 6. Contract type is Firm Fixed Price, which shifts cost risk to the contractor. 7. No small business set-aside was utilized for this award.

Value Assessment

Rating: good

The contract's value of approximately $177.9 million over more than six years suggests a significant investment in network infrastructure. Benchmarking against similar large-scale telecommunications modernization efforts within the DoD is challenging without specific scope details. However, the firm-fixed-price structure implies that the government has negotiated a set price, aiming for cost predictability. The number of bidders (2) is on the lower side for a full and open competition, which could warrant further investigation into pricing competitiveness.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, meaning all responsible sources were permitted to submit offers. The data indicates two bids were received. While two bidders participated, the level of competition might be considered moderate for a contract of this magnitude. A higher number of bidders typically suggests more robust price discovery and potentially lower prices for the government. The limited number of bids could indicate a specialized market or high barriers to entry.

Taxpayer Impact: The full and open competition aims to ensure the best value for taxpayers by allowing a wide range of companies to compete. However, with only two bids received, taxpayers may not have benefited from the full potential of market competition, potentially leading to a higher-than-optimal price.

Public Impact

The primary beneficiary is the Department of the Air Force, receiving modernized secure network capabilities. Services delivered include the maintenance and modernization of wired telecommunications infrastructure. The geographic impact is likely focused on Air Force installations within Virginia, where the contract is registered. Workforce implications may include specialized telecommunications technicians and engineers for installation, maintenance, and upgrades.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Limited competition (2 bidders) for a large-value contract could indicate potential for higher pricing.
The specific scope of 'modernization' is broad and requires detailed understanding to assess true value.
Reliance on a single delivery order vehicle for such a critical function warrants scrutiny of the IDIQ's overall performance.

Positive Signals

Firm Fixed Price contract type transfers cost overrun risk to the contractor.
Awarded under full and open competition, adhering to standard procurement practices.
Long-term contract duration allows for sustained network development and stability.

Sector Analysis

The Wired Telecommunications Carriers sector (NAICS 517110) encompasses establishments primarily engaged in operating and maintaining telecommunications networks. This includes providing internet access, voice, and data services over wired infrastructure. The federal government is a significant consumer of these services, particularly for secure and high-bandwidth networks essential for operations. This contract represents a substantial investment within this sector, likely focused on upgrading legacy systems to meet evolving cybersecurity and performance demands.

Small Business Impact

This contract does not appear to have a small business set-aside component, as indicated by the 'sb' field being false. Consequently, there are no direct subcontracting implications mandated for small businesses through this specific award. The prime contractor, Peraton Enterprise Solutions LLC, is a large business, and any subcontracting opportunities would be at their discretion.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of the Air Force's contracting and program management offices. Accountability measures are embedded within the firm-fixed-price contract terms, requiring the contractor to deliver specified services within the agreed-upon budget. Transparency is facilitated through contract award databases like FPDS. Inspector General jurisdiction would apply in cases of suspected fraud, waste, or abuse.

Related Government Programs

Air Force Network Modernization Programs
DoD Secure Communications Infrastructure
Wired Telecommunications Services Contracts
Information Technology Infrastructure Modernization

Risk Flags

Moderate competition level (2 bidders) for a large contract.
Long contract duration (6+ years) increases risk of technological obsolescence or requirement changes.
Potential for cost overruns if contractor's risk assessment was inaccurate under FFP.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $177.9 million to PERATON ENTERPRISE SOLUTIONS LLC. MODERNIZATION OF AIR FORCE SECURE NETWORK

Who is the contractor on this award?

The obligated recipient is PERATON ENTERPRISE SOLUTIONS LLC.

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 $177.9 million.

What is the period of performance?

Start: 2019-05-23. End: 2025-09-29.

What is the track record of Peraton Enterprise Solutions LLC with the Department of Defense, particularly in network modernization contracts?

Peraton Enterprise Solutions LLC has a significant history of contracting with the Department of Defense across various service areas, including IT, telecommunications, and mission support. For network modernization specifically, Peraton has been involved in numerous projects aimed at upgrading and securing military communication systems. Their experience often includes managing complex infrastructure deployments and ensuring compliance with stringent security protocols. Analyzing their past performance on similar large-scale contracts, including any past performance evaluations or disputes, would provide further insight into their capability to execute this specific Air Force Secure Network Modernization contract effectively. Data on their historical award values and contract types within DoD can indicate their specialization and success rate in this domain.

How does the awarded price compare to market rates for similar wired telecommunications modernization services?

Benchmarking the $177.9 million contract value against market rates for similar wired telecommunications modernization services is complex without granular details on the specific technologies, scope of work, and geographic coverage. However, the NAICS code 517110 (Wired Telecommunications Carriers) suggests services related to broadband, fiber optics, and related infrastructure. Industry reports and analyses from firms specializing in telecommunications infrastructure deployment can offer comparative data points. Factors such as the length of the contract (over six years), the firm-fixed-price nature, and the specific requirements for Air Force secure networks would influence the pricing. The fact that it was awarded under full and open competition with two bidders provides a limited basis for comparison; a more robust competitive landscape might have yielded different pricing outcomes.

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

While the provided data does not explicitly list the Key Performance Indicators (KPIs) or Service Level Agreements (SLAs) for this contract, they are typically detailed within the contract's Statement of Work (SOW) or Performance Work Statement (PWS). For a secure network modernization contract, common KPIs would likely include network uptime/availability, latency, bandwidth performance, data transfer speeds, and response times for issue resolution. SLAs would define the acceptable thresholds for these metrics and outline remedies or penalties if they are not met. Given the critical nature of secure Air Force networks, stringent performance standards are expected to ensure operational readiness and data integrity.

What is the historical spending trend for similar network modernization contracts within the Department of the Air Force?

Historical spending on network modernization within the Department of the Air Force has been substantial and is characterized by ongoing investments to keep pace with technological advancements and evolving threats. Over the past decade, the Air Force has consistently allocated significant portions of its IT budget towards infrastructure upgrades, cybersecurity enhancements, and the transition to more agile and resilient networks. This $177.9 million contract aligns with this trend of sustained investment. Analyzing aggregated spending data for similar NAICS codes (like 517110) and contract types (IDIQ, delivery orders) awarded by the Air Force would reveal patterns of increasing or decreasing investment, average contract values, and the prevalence of different contract vehicles used for modernization efforts.

What are the potential risks associated with a firm-fixed-price contract for a long-duration network modernization project?

Firm-fixed-price (FFP) contracts, while beneficial for cost control, can introduce risks for long-duration projects like network modernization. For the contractor, the primary risk is underestimating the costs associated with technological evolution, unforeseen integration challenges, or scope creep over the multi-year performance period. If costs escalate beyond initial projections, the contractor may experience reduced profit margins or even losses. For the government, the risk lies in potentially paying a premium upfront to account for the contractor's risk assessment, and in ensuring that the fixed price adequately covers all necessary evolving requirements. Changes in technology or mission needs during the contract's life might necessitate costly contract modifications if not carefully managed.

Industry Classification

NAICS: Information › Wired and Wireless Telecommunications (except Satellite) › Wired Telecommunications Carriers

Product/Service Code: IT AND TELECOM - INFORMATION TECHNOLOGY AND TELECOMMUNICATIONS › ADP AND TELECOMMUNICATIONS

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Offers Received: 2

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 15050 CONFERENCE CENTER DR, CHANTILLY, VA, 20151

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

Financial Breakdown

Contract Ceiling: $212,172,149

Exercised Options: $196,100,020

Current Obligation: $177,876,594

Actual Outlays: $878

Subaward Activity

Number of Subawards: 250

Total Subaward Amount: $106,121,347

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: FA873215D0040

IDV Type: IDC

Timeline