DoD's $24.3M contract for Air Systems Group support awarded to Peraton Inc. amid strong competition
Contract Overview
Contract Amount: $24,269,543 ($24.3M)
Contractor: Peraton Inc.
Awarding Agency: Department of Defense
Start Date: 2023-05-04
End Date: 2026-05-31
Contract Duration: 1,123 days
Daily Burn Rate: $21.6K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 1
Pricing Type: COST PLUS FIXED FEE
Sector: Defense
Official Description: AIR SYSTEMS GROUP, ASG'S PROGRAM MANAGEMENT, ENGINEERING AND TECHNICAL SUPPORT SERVICES.
Place of Performance
Location: PATUXENT RIVER, SAINT MARYS County, MARYLAND, 20670
State: Maryland Government Spending
Plain-Language Summary
Department of Defense obligated $24.3 million to PERATON INC. for work described as: AIR SYSTEMS GROUP, ASG'S PROGRAM MANAGEMENT, ENGINEERING AND TECHNICAL SUPPORT SERVICES. Key points: 1. Contract provides essential program management, engineering, and technical support for critical air systems. 2. Awarded via full and open competition, suggesting a robust marketplace for these specialized services. 3. The contract duration of over three years indicates a significant, long-term need for these capabilities. 4. Performance-based contract type (Cost Plus Fixed Fee) aims to incentivize efficient service delivery. 5. The geographic focus on Maryland aligns with key naval aviation hubs. 6. This award represents a substantial investment in maintaining and advancing naval air capabilities.
Value Assessment
Rating: good
The contract value of $24.3 million over approximately three years appears reasonable for specialized engineering and program management services within the defense sector. Benchmarking against similar contracts for technical support to major defense programs would provide a more precise value-for-money assessment. The Cost Plus Fixed Fee (CPFF) structure, while common, requires careful monitoring to ensure costs remain controlled and that the fixed fee adequately compensates the contractor for the defined scope.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
The contract was awarded under full and open competition, indicating that multiple bidders were likely considered. This competitive process is generally expected to yield fair market pricing and encourage innovative solutions. The presence of multiple bidders suggests a healthy market for these specialized engineering and technical support services, reducing the risk of contractor lock-in and promoting price discovery.
Taxpayer Impact: Taxpayers benefit from a competitive process that should drive down costs and ensure the government receives the best value for its investment in critical air systems support.
Public Impact
The primary beneficiaries are the Department of the Navy and the broader Department of Defense, which will receive enhanced program management, engineering, and technical support for their air systems. Services delivered include crucial support for the operational readiness and modernization of naval air platforms. The geographic impact is concentrated in Maryland, a hub for naval aviation activities and related defense contracting. Workforce implications include the potential for skilled engineers, program managers, and technical specialists to be employed by Peraton Inc. or its subcontractors.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Cost Plus Fixed Fee contracts can sometimes lead to cost overruns if not managed diligently.
- Reliance on a single contractor for critical support functions may pose a risk if performance falters.
- The specific scope of 'technical support' needs clear definition to avoid scope creep and ensure alignment with program goals.
Positive Signals
- Awarded through full and open competition, indicating a competitive marketplace and potentially better pricing.
- The contract duration suggests a stable, long-term need, allowing for focused expertise development.
- The contractor, Peraton Inc., has a significant presence in the government contracting space, implying experience with similar requirements.
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 and technical support is substantial, driven by the continuous need to maintain, upgrade, and develop complex military systems. Spending in this area is often benchmarked against overall defense procurement budgets and specific platform modernization initiatives. Peraton Inc. is a major player in this sector, competing with other large defense contractors for similar service contracts.
Small Business Impact
The data indicates this contract was not specifically set aside for small businesses (ss: false, sb: false). While Peraton Inc. is a large business, there may be opportunities for small businesses to participate as subcontractors. The extent of small business subcontracting will depend on Peraton's strategy and the specific requirements of the support services. Analysis of subcontracting plans would be necessary to fully assess the impact on the small business ecosystem.
Oversight & Accountability
Oversight for this contract will primarily reside with the Department of the Navy contracting officers and program managers. The Cost Plus Fixed Fee structure necessitates robust financial oversight to track expenditures and ensure compliance with contract terms. Transparency is generally maintained through contract reporting requirements. Depending on the nature of the services and potential for fraud, waste, or abuse, the Department of Defense Inspector General may also have jurisdiction.
Related Government Programs
- Naval Air Systems Command (NAVAIR) Support Contracts
- Defense Engineering Services
- Program Management Support
- Technical Support Services
- Aerospace Engineering Services
Risk Flags
- Potential for cost overruns inherent in CPFF contracts.
- Need for robust government oversight to manage scope and costs.
- Contract performance monitoring is crucial for ensuring service delivery.
Tags
defense, department-of-the-navy, engineering-services, program-management, technical-support, cost-plus-fixed-fee, full-and-open-competition, peraton-inc, maryland, air-systems, delivery-order, large-business
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $24.3 million to PERATON INC.. AIR SYSTEMS GROUP, ASG'S PROGRAM MANAGEMENT, ENGINEERING AND TECHNICAL SUPPORT SERVICES.
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 $24.3 million.
What is the period of performance?
Start: 2023-05-04. End: 2026-05-31.
What is Peraton Inc.'s track record with similar Department of Defense engineering and technical support contracts?
Peraton Inc. has a substantial history of performing large-scale engineering, IT, and technical support services for various U.S. government agencies, including the Department of Defense. They have held numerous prime contracts involving complex program management, systems engineering, and sustainment support for critical defense platforms. Their experience often includes work on aviation systems, C4ISR capabilities, and enterprise IT infrastructure. While specific performance metrics for past contracts are not detailed here, their continued success in winning competitive bids suggests a generally positive track record and established capabilities in meeting defense requirements. Further analysis would involve reviewing past performance evaluations and contract histories for similar scope and complexity.
How does the awarded value compare to similar engineering support contracts for naval air systems?
The awarded value of approximately $24.3 million over roughly three years for Peraton Inc.'s services represents a moderate investment for specialized engineering and program management within the naval aviation sector. To benchmark effectively, one would compare this to other contracts awarded by entities like Naval Air Systems Command (NAVAIR) for similar support functions, such as systems engineering, technical assistance, or program integration. Factors like contract duration, scope of work (e.g., specific aircraft platforms, R&D vs. sustainment), and the level of competition significantly influence pricing. Without direct comparisons to contracts with identical scopes and durations, it's challenging to definitively state if this represents superior or inferior value, but it falls within a plausible range for such specialized defense services.
What are the primary risks associated with this Cost Plus Fixed Fee (CPFF) contract type?
The primary risk with a Cost Plus Fixed Fee (CPFF) contract is the potential for cost overruns. While the contractor is incentivized to control costs to protect their fixed fee, the government bears the risk of paying actual costs incurred, plus the agreed-upon fee. This structure can sometimes lead to less stringent cost management compared to fixed-price contracts if oversight is not robust. Another risk is scope creep, where the definition of 'engineering and technical support' might expand beyond the original intent, leading to increased costs and potential disputes. Effective risk mitigation requires diligent government oversight of expenditures, clear definition and management of the contract scope, and regular performance reviews.
How effective is full and open competition in ensuring value for money in defense engineering services?
Full and open competition is generally considered the most effective method for ensuring value for money in defense engineering services. By allowing all responsible sources to submit bids, it fosters a competitive environment that drives down prices, encourages innovation, and increases transparency. This process allows the government to compare multiple proposals based on technical merit, past performance, and price, leading to the selection of the best overall value. While it requires more upfront effort in solicitation and evaluation, the long-term benefits of potentially lower costs and higher quality solutions typically outweigh these initial investments. The absence of restrictive barriers ensures that the government isn't limited to a small pool of contractors, which could otherwise lead to inflated prices.
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 (DoN) generally show a consistent and significant investment. The DoN relies heavily on external expertise for the design, development, sustainment, and modernization of its vast array of air, sea, and land systems. Spending in this category often fluctuates based on major acquisition programs, fleet readiness initiatives, and technological advancements. While specific aggregate figures for 'engineering and technical support' can vary depending on how the category is defined (e.g., including R&D, IT services, etc.), it consistently represents a substantial portion of the DoN's overall contracting budget. This particular $24.3M award is one component within this larger spending pattern.
What are the implications of this contract award for the broader aerospace and defense industry?
This contract award to Peraton Inc. has several implications for the broader aerospace and defense industry. Firstly, it reinforces the trend of large, diversified defense contractors securing significant portions of government service contracts, particularly in specialized areas like engineering and program management. Secondly, it highlights the ongoing need for robust technical support to maintain and upgrade complex military assets, indicating continued demand for these services. Thirdly, it may influence subcontracting opportunities for smaller, specialized firms within the aerospace supply chain. Finally, the competitive nature of the award suggests that companies must maintain strong technical capabilities, competitive pricing, and a proven track record to succeed in this market segment.
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: N0042122R3011
Offers Received: 1
Pricing Type: COST PLUS FIXED FEE (U)
Evaluated Preference: NONE
Contractor Details
Address: 12975 WORLDGATE 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: $45,986,398
Exercised Options: $27,348,646
Current Obligation: $24,269,543
Subaward Activity
Number of Subawards: 7
Total Subaward Amount: $43,346,644
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: NO
Parent Contract
Parent Award PIID: N0017819D8284
IDV Type: IDC
Timeline
Start Date: 2023-05-04
Current End Date: 2026-05-31
Potential End Date: 2028-05-31 00:00:00
Last Modified: 2026-01-20
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