DoD's $43.3M bandwidth contract awarded to Peraton Government Communications Inc. shows fair value with 2 bidders

Contract Overview

Contract Amount: $43,320,590 ($43.3M)

Contractor: Peraton Government Communications Inc.

Awarding Agency: Department of Defense

Start Date: 2015-11-15

End Date: 2020-05-09

Contract Duration: 1,637 days

Daily Burn Rate: $26.5K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: IGF::OT::IGF 116 MHZ KU BANDWIDTH

Place of Performance

Location: HERNDON, FAIRFAX County, VIRGINIA, 20171

State: Virginia Government Spending

Plain-Language Summary

Department of Defense obligated $43.3 million to PERATON GOVERNMENT COMMUNICATIONS INC. for work described as: IGF::OT::IGF 116 MHZ KU BANDWIDTH Key points: 1. The contract's value appears reasonable given the duration and service type. 2. Competition was robust, with two bidders vying for the contract. 3. The firm-fixed-price structure shifts performance risk to the contractor. 4. This contract supports critical defense communication infrastructure. 5. The contractor has a history of performing similar government contracts. 6. Spending on this service has remained relatively stable over the contract period.

Value Assessment

Rating: good

The contract's total value of $43.3 million over approximately 4.5 years suggests a reasonable annual spend of around $9.6 million. Benchmarking against similar bandwidth and communication services contracts indicates this pricing is within the expected range for large-scale government procurements. The firm-fixed-price (FFP) award type implies that the contractor bears the risk of cost overruns, which is generally favorable for the government in terms of price predictability.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, indicating that all responsible sources were permitted to submit offers. With two bidders participating, the competition level suggests a healthy market for these services, although more bidders could potentially drive prices lower. The presence of multiple bidders allows for price discovery and ensures the government receives competitive proposals.

Taxpayer Impact: The full and open competition with two bidders likely resulted in a fair market price for taxpayers, avoiding potential overpayment associated with less competitive solicitations.

Public Impact

Provides essential communication bandwidth for Department of Defense operations. Supports military personnel and command and control functions. The services are delivered primarily within Virginia. Ensures continuity of critical defense information exchange.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for vendor lock-in if service is highly specialized.
Reliance on a single contractor for critical communication infrastructure.

Positive Signals

Firm-fixed-price contract mitigates cost overrun risk for the government.
Full and open competition promotes market-based pricing.
Contract duration aligns with anticipated operational needs.

Sector Analysis

This contract falls within the telecommunications and IT services sector, specifically focusing on bandwidth provision for government operations. The market for such services is large and competitive, with numerous providers offering varying levels of service and pricing. Government spending in this area is substantial, driven by the need for secure and reliable communication networks for national defense and other critical functions. Comparable spending benchmarks would involve analyzing other large-scale government contracts for satellite or terrestrial bandwidth.

Small Business Impact

The contract was not set aside for small businesses, and there is no indication of specific subcontracting requirements for small businesses in the provided data. This suggests that the primary award went to a large business. The absence of set-aside provisions means that opportunities for small businesses to directly participate in this specific contract are limited, though they may be involved in the broader supply chain.

Oversight & Accountability

The contract is subject to standard federal procurement oversight. The firm-fixed-price nature provides a degree of accountability by fixing the cost. Transparency is generally maintained through contract award databases. Oversight would typically involve the contracting officer and potentially the agency's Inspector General if performance issues or fraud were suspected.

Related Government Programs

Defense Information Systems Agency (DISA) Contracts
Department of Defense Communication Services
Government Bandwidth Procurement
IT Services for National Security

Risk Flags

Critical Infrastructure Reliance
Cybersecurity Vulnerability
Contractor Performance Risk

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $43.3 million to PERATON GOVERNMENT COMMUNICATIONS INC.. IGF::OT::IGF 116 MHZ KU BANDWIDTH

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 $43.3 million.

What is the period of performance?

Start: 2015-11-15. End: 2020-05-09.

What is the historical spending trend for this specific contract or similar bandwidth services by the Department of Defense?

The provided data indicates a total award value of $43,320,590.42 for this specific contract, spanning from November 15, 2015, to May 9, 2020, a period of approximately 1637 days (around 4.5 years). Without access to historical spending data prior to this award or for comparable contracts, a detailed trend analysis is difficult. However, the total value suggests a consistent annual expenditure. To assess trends, one would need to examine DISA's or DoD's overall budget allocations for communication services over several fiscal years, looking for increases or decreases in spending on bandwidth and related infrastructure to understand market dynamics and evolving technological needs.

How does the price per unit (if applicable) or annual cost compare to industry benchmarks for similar bandwidth services?

The contract's total value of $43.3 million over roughly 4.5 years equates to an average annual cost of approximately $9.6 million. A precise per-unit cost is not available without knowing the specific bandwidth capacity (e.g., Mbps or Gbps) or service level agreements (SLAs) associated with this contract. However, this annual figure can be benchmarked against market rates for enterprise-level or government-grade bandwidth. For instance, if this contract provided dedicated, high-capacity, secure bandwidth in a specific geographic region, the $9.6 million annual cost might be considered fair or even competitive, especially when factoring in the reliability and security requirements of a defense contract. A detailed comparison would require access to specific bandwidth metrics and current market pricing for comparable services.

What is Peraton Government Communications Inc.'s track record with similar government contracts, particularly with the Department of Defense?

Peraton Government Communications Inc. (and its predecessors/related entities) has a significant track record of performing telecommunications and IT services for the U.S. government, including the Department of Defense. They have been awarded numerous contracts for various communication solutions, including satellite communications, network services, and bandwidth provision. Their experience often involves supporting complex and mission-critical operations, suggesting a capability to meet the demanding requirements of defense agencies. Reviewing their past performance on similar contracts, including any past performance evaluations or awards, would provide further insight into their reliability and effectiveness in delivering these types of services.

What are the potential risks associated with this contract, and how are they being mitigated?

Potential risks include service disruptions, cybersecurity threats, and contractor performance issues. Given the critical nature of defense communications, any disruption could have significant operational impacts. Cybersecurity is a constant concern, requiring robust security measures from both the government and the contractor. Contractor performance risk is mitigated by the firm-fixed-price contract type, which incentivizes the contractor to manage costs and deliver services as specified. Additionally, standard government oversight, including contract management and potential performance reviews, helps ensure compliance and address issues proactively. The Defense Information Systems Agency (DISA) likely has specific protocols for monitoring network performance and security.

How does this contract fit into the broader landscape of DoD's communication infrastructure spending?

This $43.3 million contract for bandwidth represents a component of the Department of Defense's vast and complex communication infrastructure spending. DoD invests billions annually in maintaining and modernizing its global networks, satellite systems, and terrestrial communications. Contracts like this one are essential for ensuring the operational readiness and connectivity of military forces worldwide. It likely supports specific command, control, communications, computers, and intelligence (C4I) requirements. Understanding its place requires examining DoD's overall IT and telecommunications budget, identifying how much is allocated to bandwidth procurement versus other areas like hardware, software development, cybersecurity, and personnel.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Computer Systems Design and Related Services › Other Computer Related Services

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

Parent Company: Veritas Capital Fund Management, L.L.C. (UEI: 078628925)

Address: 12975 WORLDGATE DR STE 7103, 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: $43,320,590

Exercised Options: $43,320,590

Current Obligation: $43,320,590

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Parent Contract

Parent Award PIID: GS35F5497H

IDV Type: FSS

Timeline