DoD's $42.4M engineering services contract to Peraton Inc. awarded without competition
Contract Overview
Contract Amount: $42,445,263 ($42.4M)
Contractor: Peraton Inc.
Awarding Agency: Department of Defense
Start Date: 2006-05-17
End Date: 2011-05-16
Contract Duration: 1,825 days
Daily Burn Rate: $23.3K/day
Competition Type: NOT COMPETED
Number of Offers Received: 1
Pricing Type: COST PLUS FIXED FEE
Sector: Defense
Place of Performance
Location: ANNAPOLIS JUNCTION, ANNE ARUNDEL County, MARYLAND, 20701
State: Maryland Government Spending
Plain-Language Summary
Department of Defense obligated $42.4 million to PERATON INC. for work described as: Key points: 1. Contract awarded on a cost-plus-fixed-fee basis, which can lead to cost overruns. 2. Lack of competition raises concerns about price discovery and potential overpayment. 3. Long contract duration of 5 years (1825 days) may indicate a stable, ongoing need. 4. The contract falls under engineering services (NAICS 541330), a broad category. 5. Awarded by the Defense Contract Management Agency, suggesting a focus on defense-related engineering. 6. The contract's value is significant, warranting scrutiny of its cost-effectiveness.
Value Assessment
Rating: questionable
Benchmarking the value of this $42.4 million contract is challenging without specific service details and comparable contract data. However, the cost-plus-fixed-fee structure, while allowing for flexibility, inherently carries a higher risk of cost escalation compared to fixed-price contracts. The absence of competition further complicates a direct value assessment, as there's no market pressure to ensure the most competitive pricing. Without more granular data on the specific engineering services rendered and their market rates, it's difficult to definitively state if this represents excellent value.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was awarded using a sole-source, non-competitive procedure. This means that only one contractor, Peraton Inc., was solicited and awarded the contract. The justification for this approach is not provided in the data, but sole-source awards typically occur when only one responsible source is available or when a compelling urgency exists. The lack of competition limits the government's ability to explore a wider range of pricing and technical solutions.
Taxpayer Impact: Sole-source awards mean taxpayers do not benefit from competitive bidding, potentially leading to higher costs than if multiple vendors had vied for the contract.
Public Impact
The primary beneficiaries are likely entities within the Department of Defense requiring specialized engineering services. The services delivered are broadly categorized as engineering services, crucial for defense operations and infrastructure. The contract is geographically focused on Maryland (ST: MD, SN: MARYLAND), indicating a concentration of defense activities in that region. The contract supports a workforce skilled in engineering and related technical fields.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Lack of competition may result in suboptimal pricing for taxpayers.
- Cost-plus-fixed-fee contracts can incentivize higher spending by the contractor.
- The broad nature of 'engineering services' could mask inefficiencies if not tightly managed.
- Long contract duration without clear performance metrics could lead to complacency.
Positive Signals
- The contract addresses a specific need within the Department of Defense, indicating a critical requirement.
- Peraton Inc. is a known entity in the government contracting space, suggesting some level of established capability.
- The fixed-fee component of the contract provides some cost certainty compared to pure cost-reimbursement.
Sector Analysis
The engineering services sector is a vital component of the federal procurement landscape, supporting a wide array of government functions from infrastructure development to advanced research and development. The North American Industry Classification System (NAICS) code 541330, Engineering Services, encompasses establishments primarily engaged in providing architectural, engineering, and related design services. Federal spending in this sector is substantial, often driven by complex defense, infrastructure, and technology projects. This contract, valued at over $42 million, represents a significant investment within this sector, likely supporting specialized defense engineering needs.
Small Business Impact
The data indicates that this contract was not set aside for small businesses (SS: false, SB: false). As a sole-source award to a large contractor (Peraton Inc.), there are limited direct subcontracting opportunities for small businesses unless explicitly mandated or voluntarily pursued by the prime contractor. This approach does not actively contribute to the small business ecosystem through set-aside goals.
Oversight & Accountability
Oversight for this contract would typically fall under the purview of the Defense Contract Management Agency (DCMA), which is responsible for ensuring contractor performance and compliance. The specific oversight mechanisms, such as audits, performance reviews, and reporting requirements, would be detailed in the contract's terms and conditions. Transparency is often limited in sole-source awards, and accountability relies heavily on the effectiveness of the contracting officer and the oversight agency's diligence in monitoring costs and performance.
Related Government Programs
- Department of Defense Engineering Support Contracts
- Defense Contract Management Agency Services
- Cost-Plus-Fixed-Fee Engineering Contracts
- Sole-Source Defense Procurements
Risk Flags
- Sole-source award lacks competitive pricing pressure.
- Cost-plus-fixed-fee structure carries inherent cost overrun risk.
- Lack of detailed service description hinders value assessment.
- No small business set-aside noted.
Tags
defense, department-of-defense, engineering-services, cost-plus-fixed-fee, sole-source, definitive-contract, peraton-inc, maryland, contract-management, non-competitive
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $42.4 million to PERATON INC.. See the official description on USAspending.
Who is the contractor on this award?
The obligated recipient is PERATON INC..
Which agency awarded this contract?
Awarding agency: Department of Defense (Defense Contract Management Agency).
What is the total obligated amount?
The obligated amount is $42.4 million.
What is the period of performance?
Start: 2006-05-17. End: 2011-05-16.
What specific engineering services were procured under this contract?
The provided data categorizes the contract under NAICS code 541330 (Engineering Services) but does not specify the exact nature of the engineering work. This could range from design and development to testing, analysis, or technical support for defense systems or infrastructure. Without a detailed statement of work, it is impossible to ascertain the precise services rendered. Understanding the specifics is crucial for evaluating the necessity, scope, and potential risks associated with the contract.
What was the justification for awarding this contract on a sole-source basis?
The data explicitly states the contract was 'NOT COMPETED' and awarded as a 'DEFINITIVE CONTRACT' under a sole-source designation. Federal regulations permit sole-source awards under specific circumstances, such as when only one responsible source can satisfy the agency's needs, in cases of urgent and compelling requirements, or when it's impractical to obtain competition. However, the specific justification for this particular award to Peraton Inc. is not detailed in the provided information. A thorough review would require accessing the contract's justification and approval (J&A) document, if one exists.
How does the cost-plus-fixed-fee (CPFF) structure potentially impact the final cost to taxpayers?
The Cost-Plus-Fixed-Fee (CPFF) contract type means the contractor is reimbursed for all allowable costs incurred, plus a predetermined fixed fee representing profit. While the fee is fixed, the total cost is variable and depends on the actual costs incurred by the contractor. This structure can incentivize contractors to incur costs, as they are reimbursed for them, potentially leading to higher overall expenditures than a fixed-price contract. Effective oversight and stringent cost controls by the government are essential to mitigate the risk of cost overruns and ensure value for taxpayers under a CPFF arrangement.
What is the historical spending pattern for similar engineering services within the Department of Defense?
Analyzing historical spending patterns for similar engineering services within the Department of Defense is crucial for context. While this specific contract is for $42.4 million over five years, understanding the typical scale, duration, and pricing of comparable DoD engineering contracts would provide a benchmark. Without access to broader spending data, it's difficult to determine if this contract's value is in line with historical norms, unusually high, or exceptionally low. Such analysis would involve examining contract databases for similar NAICS codes, agencies, and service types.
What is Peraton Inc.'s track record with government contracts, particularly with the Department of Defense?
Peraton Inc. is a significant government contractor, often involved in complex technology and defense-related projects. Their track record with the Department of Defense would encompass numerous contracts across various agencies and service types. A comprehensive assessment of their performance would involve reviewing past contract awards, performance evaluations (e.g., Contractor Performance Assessment Reporting System - CPARS), any past performance issues, and their success in delivering on similar engineering services contracts. This information is vital for understanding their reliability and capability in fulfilling the current contract's requirements.
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: NOT COMPETED
Solicitation Procedures: ONLY ONE SOURCE
Offers Received: 1
Pricing Type: COST PLUS FIXED FEE (U)
Evaluated Preference: NONE
Contractor Details
Parent Company: Veritas Capital Fund Management, L.L.C. (UEI: 078628925)
Address: 141 NATIONAL BUSINEMD PKWY STE 200, ANNAPOLIS JUNCTION, MD, 20701
Business Categories: Category Business, Not Designated a Small Business
Contract Characteristics
Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED
Cost or Pricing Data: YES
Timeline
Start Date: 2006-05-17
Current End Date: 2011-05-16
Potential End Date: 2011-05-16 00:00:00
Last Modified: 2021-11-03
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