Peraton Inc. awarded $207.7M for ISR innovation and integration services by the Air Force
Contract Overview
Contract Amount: $207,694,496 ($207.7M)
Contractor: Peraton Inc.
Awarding Agency: Department of Defense
Start Date: 2017-06-02
End Date: 2022-06-02
Contract Duration: 1,826 days
Daily Burn Rate: $113.7K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 2
Pricing Type: COST PLUS FIXED FEE
Sector: IT
Official Description: IGF::OT::IGF FULL-SPECTRUM INTELLIGENCE, SURVEILLANCE, AND RECONNAISSANCE (ISR) INNOVATION AND INTEGRATION (F3I)
Place of Performance
Location: HERNDON, FAIRFAX County, VIRGINIA, 20170
State: Virginia Government Spending
Plain-Language Summary
Department of Defense obligated $207.7 million to PERATON INC. for work described as: IGF::OT::IGF FULL-SPECTRUM INTELLIGENCE, SURVEILLANCE, AND RECONNAISSANCE (ISR) INNOVATION AND INTEGRATION (F3I) Key points: 1. Contract value represents a significant investment in intelligence, surveillance, and reconnaissance capabilities. 2. The full and open competition suggests a robust market for these specialized IT services. 3. The contract duration of five years indicates a long-term need for these capabilities. 4. The Cost Plus Fixed Fee (CPFF) pricing structure may lead to cost overruns if not carefully managed. 5. This contract aligns with broader defense spending trends focused on advanced technological integration. 6. The award to a single contractor for a large sum warrants scrutiny of performance and value.
Value Assessment
Rating: fair
The contract's value of $207.7 million over five years for computer systems design services is substantial. Benchmarking against similar large-scale ISR integration contracts is difficult without more specific service details. The CPFF structure introduces inherent risk for cost control, potentially impacting overall value for money if not managed diligently by the agency. The number of bids received (2) is low for a full and open competition, which could suggest either a highly specialized niche or potential barriers to entry for other capable firms.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
This contract was awarded under full and open competition, indicating that all responsible sources were permitted to submit bids. However, only two bids were received, which is a relatively low number for such a significant contract. This limited competition could suggest that the required expertise is highly specialized, or that the barriers to entry for potential bidders were substantial. The low number of bidders may have limited price discovery and potentially resulted in a higher price than if more competition had been present.
Taxpayer Impact: While the competition was open, the low number of bidders means taxpayers may not have benefited from the most competitive pricing possible. The agency should ensure robust oversight to maximize value despite the limited bidding pool.
Public Impact
The Department of the Air Force is the primary beneficiary, enhancing its intelligence, surveillance, and reconnaissance (ISR) capabilities. Services delivered likely include system design, integration, and support for advanced ISR technologies. The geographic impact is likely global, supporting worldwide ISR operations. Workforce implications may include specialized IT and engineering roles within Peraton and its potential subcontractors.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Cost Plus Fixed Fee (CPFF) contract type can incentivize contractor cost overruns if not closely monitored.
- Only two bids received in a full and open competition raises questions about market accessibility or contractor capabilities.
- The significant contract value requires diligent oversight to ensure effective use of taxpayer funds.
Positive Signals
- Awarded through full and open competition, indicating an attempt to solicit broad market participation.
- The contract addresses critical national security needs in ISR, a high-priority area for the DoD.
- The five-year duration suggests a stable, long-term commitment to developing and integrating advanced ISR technologies.
Sector Analysis
This contract falls within the Information Technology (IT) sector, specifically focusing on computer systems design and integration services for defense applications. The market for ISR technology is highly specialized and competitive, driven by continuous advancements in sensors, data processing, and artificial intelligence. Spending in this area is substantial within the Department of Defense, reflecting the critical role of ISR in modern warfare and national security. Comparable spending benchmarks would likely be found within other large-scale IT integration contracts awarded to major defense contractors.
Small Business Impact
The contract data indicates that small business participation (sb) is false, and it was not a small business set-aside. This suggests that the primary contract was awarded to a large business. There is no explicit information on subcontracting plans for small businesses within the provided data. Without this information, it's difficult to assess the direct impact on the small business ecosystem, though large prime contractors often utilize small businesses for specialized services.
Oversight & Accountability
Oversight for this contract would primarily fall under the Department of the Air Force's contracting and program management offices. The Cost Plus Fixed Fee (CPFF) structure necessitates rigorous financial oversight to ensure costs are reasonable and allocable. Inspector General (IG) jurisdiction would apply to investigations of fraud, waste, or abuse related to the contract. Transparency is generally maintained through contract award announcements and reporting, but detailed performance metrics and cost breakdowns are often sensitive.
Related Government Programs
- Intelligence, Surveillance, and Reconnaissance (ISR) Programs
- Advanced Technology Integration Contracts
- Department of Defense IT Modernization Efforts
- Computer Systems Design Services Contracts
Risk Flags
- Potential for cost overruns due to CPFF structure
- Limited competition (2 bidders) may impact price and innovation
- Complexity of integrating advanced ISR technologies
- Need for robust government oversight of performance and costs
Tags
it, defense, department-of-defense, air-force, intelligence-surveillance-reconnaissance, computer-systems-design, full-and-open-competition, cost-plus-fixed-fee, large-contract, virginia, peraton-inc
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $207.7 million to PERATON INC.. IGF::OT::IGF FULL-SPECTRUM INTELLIGENCE, SURVEILLANCE, AND RECONNAISSANCE (ISR) INNOVATION AND INTEGRATION (F3I)
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 $207.7 million.
What is the period of performance?
Start: 2017-06-02. End: 2022-06-02.
What is the specific nature of the 'ISR Innovation and Integration' services being provided under this contract?
The provided data abbreviates the contract as 'FULL-SPECTRUM INTELLIGENCE, SURVEILLANCE, AND RECONNAISSANCE (ISR) INNOVATION AND INTEGRATION (F3I)'. While the exact scope is not detailed, 'innovation and integration' suggests services related to developing, testing, and implementing new technologies and systems within the Air Force's existing ISR architecture. This could encompass areas like advanced sensor fusion, data analytics, AI-driven intelligence processing, secure communication networks, and the integration of various ISR platforms (e.g., drones, satellites, manned aircraft) into a cohesive operational framework. The 'full-spectrum' aspect implies a comprehensive approach covering all facets of ISR operations.
How does the Cost Plus Fixed Fee (CPFF) pricing structure compare to other contract types for similar ISR services?
Cost Plus Fixed Fee (CPFF) contracts are common in research and development or when the scope of work is not precisely defined at the outset, allowing for flexibility as requirements evolve. Unlike fixed-price contracts, CPFF reimburses the contractor for allowable costs plus a predetermined fixed fee representing profit. This structure can be beneficial when innovation is key, but it carries a higher risk of cost overruns compared to fixed-price contracts, as the government bears the brunt of cost uncertainties. For ISR integration, where technological advancements are rapid and requirements can shift, CPFF might be deemed appropriate, but it necessitates stringent government oversight to manage costs effectively and ensure value.
What are the potential risks associated with having only two bidders for this significant contract?
Having only two bidders in a full and open competition for a $207.7 million contract presents several risks. Firstly, it may indicate a lack of robust competition, potentially leading to suboptimal pricing for the government. The limited pool might mean that the government did not receive the most innovative or cost-effective solutions available in the market. Secondly, it could suggest barriers to entry, such as high qualification requirements, complex proposal processes, or a highly specialized market dominated by a few players. This concentration of capability could also pose future risks if one of the bidders experiences financial difficulties or strategic shifts, reducing future competitive options.
What is Peraton Inc.'s track record with similar large-scale defense IT and ISR contracts?
Peraton Inc. has a significant track record in the government contracting space, particularly in areas related to defense, intelligence, and IT services. They have been involved in numerous large contracts, including those focused on space, cyber, intelligence, and mission support. Their acquisition history, notably of companies like Perspecta and LGS Innovations, has expanded their capabilities in areas relevant to complex IT integration and defense modernization. While specific details on past ISR innovation and integration contracts of this exact nature require deeper research into their portfolio, Peraton is generally recognized as a major player capable of handling substantial and complex defense programs.
How does the $207.7 million contract value compare to historical Air Force spending on ISR technology integration?
The $207.7 million contract value over five years represents a significant annual average of approximately $41.5 million dedicated to ISR innovation and integration. This figure needs to be contextualized within the broader Air Force budget for intelligence, surveillance, and reconnaissance systems, which often runs into billions of dollars annually. Large-scale integration and innovation contracts are typical for maintaining and advancing complex technological capabilities. While this specific award is substantial, it is likely one component of a larger, multi-faceted ISR modernization strategy. Comparing it to historical spending requires analyzing trends in IT services and defense system integration over the past decade.
What are the potential performance risks for Peraton Inc. given the CPFF structure and the complexity of ISR integration?
Performance risks for Peraton Inc. under this CPFF contract are multifaceted. The CPFF structure, while allowing flexibility, requires meticulous cost management and justification of expenses. Failure to adequately control costs could lead to budget overruns, impacting profitability and potentially triggering closer scrutiny from the agency. Furthermore, the complexity inherent in 'ISR innovation and integration' means that technical challenges, unforeseen integration issues, or difficulties in achieving desired performance metrics are significant risks. Successfully navigating these requires strong project management, deep technical expertise, and effective collaboration with the Air Force to adapt to evolving requirements and technological landscapes.
Industry Classification
NAICS: Professional, Scientific, and Technical Services › Computer Systems Design and Related Services › Computer Systems Design Services
Product/Service Code: RESEARCH AND DEVELOPMENT › DEFENSE (OTHER) R&D
Competition & Pricing
Extent Competed: FULL AND OPEN COMPETITION
Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY
Offers Received: 2
Pricing Type: COST PLUS FIXED FEE (U)
Evaluated Preference: NONE
Contractor Details
Parent Company: Veritas Capital Fund Management, L.L.C.
Address: 12975 WORLDGATE DR 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
Financial Breakdown
Contract Ceiling: $207,984,496
Exercised Options: $207,984,496
Current Obligation: $207,694,496
Subaward Activity
Number of Subawards: 3320
Total Subaward Amount: $4,025,838,693
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: NO
Parent Contract
Parent Award PIID: GS00Q09BGD0056
IDV Type: GWAC
Timeline
Start Date: 2017-06-02
Current End Date: 2022-06-02
Potential End Date: 2022-06-02 00:00:00
Last Modified: 2022-08-05
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