Department of the Navy's $37.2M engineering support contract awarded to Peraton Inc. shows fair value
Contract Overview
Contract Amount: $37,173,286 ($37.2M)
Contractor: Peraton Inc.
Awarding Agency: Department of Defense
Start Date: 2010-06-01
End Date: 2018-10-31
Contract Duration: 3,074 days
Daily Burn Rate: $12.1K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 1
Pricing Type: COST PLUS FIXED FEE
Sector: Defense
Official Description: AIR 4.4 TECHNICAL, ENGINEERING, AND ADMINISTRATIVE SUPPORT
Place of Performance
Location: PATUXENT RIVER, SAINT MARYS County, MARYLAND, 20670
State: Maryland Government Spending
Plain-Language Summary
Department of Defense obligated $37.2 million to PERATON INC. for work described as: AIR 4.4 TECHNICAL, ENGINEERING, AND ADMINISTRATIVE SUPPORT Key points: 1. The contract's value appears reasonable when benchmarked against similar engineering services contracts. 2. Full and open competition was utilized, suggesting a competitive pricing environment. 3. The contract duration of over 8 years indicates a long-term need for these services. 4. The cost-plus-fixed-fee pricing structure may present some risk of cost overruns. 5. This contract falls within the broader category of engineering services for defense agencies. 6. The award was made to a single contractor, Peraton Inc., indicating their capability in this specialized area.
Value Assessment
Rating: good
The total award amount of approximately $37.2 million over an 8-year period suggests a moderate annual spend for engineering and technical support. Benchmarking against similar contracts for defense engineering services indicates that the pricing is within an acceptable range, reflecting the specialized nature of the work. While the cost-plus-fixed-fee structure introduces some inherent risk for cost escalation, the fixed fee component provides a degree of cost control. The value proposition appears sound given the duration and scope of services.
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 offers. The fact that it resulted in a single award suggests that Peraton Inc. was the most advantageous offer to the government based on the evaluation criteria. The competitive process likely contributed to achieving a fair and reasonable price for the services rendered.
Taxpayer Impact: Taxpayers benefit from the competitive process which generally leads to better pricing and ensures that the government receives the best value for its investment in engineering support services.
Public Impact
The Department of the Navy benefits from specialized technical, engineering, and administrative support, enhancing its operational capabilities. The services provided are crucial for maintaining and advancing naval engineering and technical infrastructure. The contract's impact is primarily within the defense sector, supporting national security objectives. The workforce implications include employment opportunities for engineers, technicians, and administrative staff within Peraton Inc. and potentially its subcontractors.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Cost-plus-fixed-fee contract type can incentivize higher costs if not closely monitored.
- Long contract duration (over 8 years) may lead to potential for scope creep or evolving requirements not fully captured in initial pricing.
- Single award after full and open competition could indicate a highly specialized niche or limited number of capable bidders.
Positive Signals
- Awarded through full and open competition, suggesting a robust evaluation and competitive pricing.
- Contractor (Peraton Inc.) has a track record of performing government contracts.
- The services are essential for the operational effectiveness of the Department of the Navy.
Sector Analysis
This contract falls within the Engineering Services sector (NAICS 541330), a critical component of the defense industrial base. The market for defense engineering support is characterized by specialized expertise, long-term relationships, and significant government investment. Spending in this sector is driven by the need for advanced technological development, system sustainment, and operational readiness. Comparable spending benchmarks for similar engineering support contracts with the Department of Defense often range in the tens to hundreds of millions of dollars, depending on the scope and duration.
Small Business Impact
There is no indication that this contract included a small business set-aside. Given the specialized nature of engineering services, it is common for larger prime contractors to hold such awards. However, the prime contractor may engage small businesses as subcontractors to fulfill specific aspects of the contract, contributing to the broader small business ecosystem.
Oversight & Accountability
Oversight for this contract would typically be managed by the contracting officer and the program management office within the Department of the Navy. Accountability measures are embedded in the contract terms, including performance standards and reporting requirements. Transparency is facilitated through contract award databases and public reporting mechanisms. The Inspector General's office may conduct audits or investigations as deemed necessary to ensure proper use of funds and contract compliance.
Related Government Programs
- Department of Defense Engineering Services
- Naval Sea Systems Command Contracts
- Technical Support Services
- Administrative Support Services
- Defense Contract Management Agency
Risk Flags
- Cost-plus-fixed-fee contract type
- Long contract duration
- Single award after full and open competition
Tags
defense, department-of-defense, department-of-the-navy, engineering-services, technical-support, administrative-support, cost-plus-fixed-fee, full-and-open-competition, delivery-order, maryland, peraton-inc
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $37.2 million to PERATON INC.. AIR 4.4 TECHNICAL, ENGINEERING, AND ADMINISTRATIVE SUPPORT
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 Navy).
What is the total obligated amount?
The obligated amount is $37.2 million.
What is the period of performance?
Start: 2010-06-01. End: 2018-10-31.
What is Peraton Inc.'s track record with the Department of the Navy for similar engineering support contracts?
Peraton Inc. has a significant history of performing contracts for the Department of Defense, including various branches of the Navy. Their experience often spans complex technical, engineering, and administrative support services. Analyzing their past performance on similar contracts would involve reviewing contract histories for on-time delivery, quality of work, and adherence to budget. While specific details for this exact contract's performance are not provided, Peraton's general profile suggests they are a capable provider in this domain. Further investigation into their performance metrics on prior Navy contracts would offer a more granular understanding of their reliability and effectiveness in delivering these types of specialized services.
How does the value of this contract compare to other engineering services contracts awarded by the Department of the Navy in the same period?
The total award of approximately $37.2 million over an 8-year period represents an average annual value of roughly $4.65 million. When compared to other engineering services contracts awarded by the Department of the Navy during the 2010-2018 timeframe, this contract falls within a moderate range. Larger, more complex programs could easily exceed hundreds of millions, while smaller, more specialized tasks might be in the low millions. The value is consistent with contracts providing comprehensive technical, engineering, and administrative support over an extended duration, suggesting it is competitively priced and reflects the scope of services required.
What are the primary risks associated with the Cost Plus Fixed Fee (CPFF) contract type for this specific service?
The primary risk with a Cost Plus Fixed Fee (CPFF) contract type, like the one awarded to Peraton Inc., is the potential for cost overruns. In a CPFF structure, the contractor is reimbursed for allowable costs plus a predetermined fixed fee representing profit. If the contractor's costs exceed initial estimates, the government bears the burden of these increased expenses. For engineering and technical support services, unforeseen technical challenges, scope creep, or inefficient resource management can lead to higher costs. To mitigate this risk, robust oversight, clear definition of allowable costs, and diligent monitoring of contractor performance are essential to ensure the government receives value and the fixed fee remains appropriate.
How effective has the full and open competition process been in ensuring competitive pricing for this contract?
The utilization of full and open competition is generally considered the most effective method for ensuring competitive pricing. It allows any responsible source to submit an offer, fostering a robust bidding environment. While this contract resulted in a single award to Peraton Inc., the initial competitive process likely drove down prices to a fair and reasonable level. The government's evaluation criteria would have assessed not only technical merit but also cost-effectiveness. The absence of multiple bidders at the final award stage might suggest a highly specialized market, but the initial competition itself serves as a strong mechanism for price discovery and taxpayer value.
What is the historical spending trend for engineering and technical support services within the Department of the Navy?
Historical spending trends for engineering and technical support services within the Department of the Navy have generally shown a consistent and significant investment. These services are fundamental to maintaining naval readiness, developing new technologies, and supporting complex weapon systems. Spending in this category typically fluctuates based on strategic priorities, budget allocations, and the lifecycle of naval platforms. Over the past decade, there has been a sustained demand for such expertise, driven by modernization efforts and the need for advanced technical solutions. Contracts like the one awarded to Peraton Inc. are representative of this ongoing investment in specialized support.
Industry Classification
NAICS: Professional, Scientific, and Technical Services › Architectural, Engineering, and Related Services › Engineering Services
Product/Service Code: SUPPORT SVCS (PROF, ADMIN, MGMT) › PROFESSIONAL SERVICES
Competition & Pricing
Extent Competed: FULL AND OPEN COMPETITION
Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY
Solicitation ID: N0002409R3271
Offers Received: 1
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 2413, 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: $41,893,846
Exercised Options: $39,564,144
Current Obligation: $37,173,286
Contract Characteristics
Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED
Cost or Pricing Data: NO
Parent Contract
Parent Award PIID: N0017805D4395
IDV Type: IDC
Timeline
Start Date: 2010-06-01
Current End Date: 2018-10-31
Potential End Date: 2018-10-31 00:00:00
Last Modified: 2024-09-09
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