Peraton Inc. awarded $128.6M for SPAWAR system engineering services, highlighting significant defense IT support
Contract Overview
Contract Amount: $128,565,366 ($128.6M)
Contractor: Peraton Inc.
Awarding Agency: Department of Defense
Start Date: 2008-10-21
End Date: 2013-11-15
Contract Duration: 1,851 days
Daily Burn Rate: $69.5K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 2
Pricing Type: COST PLUS FIXED FEE
Sector: IT
Official Description: SYSTEM ENGINEERING TEAM SERVICES FOR SPAWAR 4.0
Place of Performance
Location: HERNDON, FAIRFAX County, VIRGINIA, 20170
State: Virginia Government Spending
Plain-Language Summary
Department of Defense obligated $128.6 million to PERATON INC. for work described as: SYSTEM ENGINEERING TEAM SERVICES FOR SPAWAR 4.0 Key points: 1. Contract value represents substantial investment in specialized engineering expertise for naval IT infrastructure. 2. Full and open competition suggests a robust market for these services, potentially driving competitive pricing. 3. The contract duration of over 1800 days indicates a long-term need for sustained engineering support. 4. Cost-plus-fixed-fee pricing structure requires careful monitoring to manage potential cost overruns. 5. This award falls within the broader category of defense IT services, a critical and growing sector. 6. The specific NAICS code (541330) points to a focus on engineering services for complex systems.
Value Assessment
Rating: good
The $128.6 million award for system engineering services appears reasonable given the contract's duration and the specialized nature of defense IT support. Benchmarking against similar large-scale engineering contracts within the Department of Defense would provide a more precise value-for-money assessment. The cost-plus-fixed-fee structure necessitates diligent oversight to ensure costs remain aligned with the fixed fee and project 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 had the opportunity to compete. This approach generally fosters a competitive environment, which can lead to better pricing and innovation. The presence of two bidders suggests a moderately competitive landscape for this specific type of specialized engineering service.
Taxpayer Impact: Taxpayers benefit from a competitive bidding process that aims to secure the best value for the government's investment in critical defense systems.
Public Impact
Naval warfare systems and IT infrastructure are directly supported, enhancing operational capabilities. Personnel in the defense IT sector, particularly engineers, benefit from sustained employment opportunities. The services provided are crucial for the modernization and maintenance of critical defense communication and information systems. Geographic impact is primarily concentrated around naval bases and defense installations where SPAWAR operates.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Cost-plus-fixed-fee contracts can incentivize contractors to increase costs to maximize profit if not adequately managed.
- Long contract durations may lead to scope creep or require adjustments for evolving technological needs.
- Reliance on a single contractor for extended periods could pose risks if performance issues arise.
Positive Signals
- Awarded through full and open competition, suggesting a healthy market and potential for competitive pricing.
- The contract addresses critical system engineering needs for the Navy's IT infrastructure.
- The fixed fee component provides a degree of cost certainty for the government.
Sector Analysis
This contract falls within the Defense Information Technology (IT) sector, a significant segment of federal spending. The market for system engineering services supporting naval operations is specialized, often dominated by large defense contractors. Comparable spending benchmarks would involve analyzing other large-scale IT support contracts awarded by the Department of Defense, particularly those focused on naval systems and infrastructure modernization.
Small Business Impact
The data indicates this contract was not specifically set aside for small businesses, and there is no explicit mention of subcontracting requirements for small businesses. This suggests that the primary award went to a larger entity, and the direct impact on the small business ecosystem may be limited unless Peraton Inc. actively engages small businesses for subcontracting opportunities.
Oversight & Accountability
Oversight for this contract would typically be managed by the Defense Contract Management Agency (DCMA) and the Space and Naval Warfare Systems Command (SPAWAR). Accountability measures are inherent in the cost-plus-fixed-fee structure, requiring detailed reporting and justification of costs. Transparency is facilitated through contract award databases, though specific performance metrics and oversight reports may not always be publicly accessible.
Related Government Programs
- Naval IT Modernization Programs
- Defense Information Systems Agency (DISA) Contracts
- SPAWAR Systems Center Atlantic/Pacific Support Contracts
- Department of Defense Engineering Services
- Command, Control, Communications, Computers, and Intelligence (C4I) Systems
Risk Flags
- Cost Overrun Risk (CPFF)
- Long-Term Contract Dependency
- Evolving Technology Requirements
Tags
it, defense, department-of-defense, navy, engineering-services, full-and-open-competition, cost-plus-fixed-fee, large-contract, system-engineering, virginia, peraton-inc
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $128.6 million to PERATON INC.. SYSTEM ENGINEERING TEAM SERVICES FOR SPAWAR 4.0
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 $128.6 million.
What is the period of performance?
Start: 2008-10-21. End: 2013-11-15.
What is Peraton Inc.'s track record with similar large-scale defense IT contracts?
Peraton Inc. has a significant history of performing large-scale IT and engineering services for the U.S. government, particularly within the defense sector. They have held numerous prime contracts with agencies like the Department of Defense, NASA, and intelligence community components. Their portfolio often includes complex system integration, cybersecurity, and mission-critical IT support. Analyzing their past performance on cost-plus-fixed-fee contracts, their ability to meet delivery schedules, and their history of contract modifications or disputes would provide further insight into their reliability for this SPAWAR contract. Specific contract databases and agency performance reports would be the primary sources for this detailed analysis.
How does the awarded amount compare to the estimated value or budget for this type of service?
Without access to the original contract solicitation or internal government budget documents, a direct comparison of the awarded amount ($128.6 million) to the estimated value is challenging. However, the duration of the contract (over 1800 days) suggests a substantial, long-term requirement. The awarded amount, spread over approximately five years, indicates an average annual value of roughly $25 million. This figure needs to be benchmarked against industry standards for system engineering services supporting naval IT infrastructure. Factors such as the complexity of the systems, the required security clearances, and the specific technical expertise demanded will influence the reasonableness of this value. Further analysis would involve comparing this to other similar contracts awarded by SPAWAR or other naval commands for comparable services.
What are the primary risks associated with a Cost Plus Fixed Fee (CPFF) contract of this magnitude?
The primary risk with a Cost Plus Fixed Fee (CPFF) contract of this magnitude is the potential for cost overruns. While the fixed fee provides a ceiling for the contractor's profit, the 'cost plus' element means the government reimburses the contractor's allowable costs. If costs escalate beyond initial projections due to inefficiencies, scope creep, or unforeseen technical challenges, the total government expenditure can significantly exceed the anticipated budget. Effective oversight, stringent cost accounting standards, and clear definition of allowable costs are crucial to mitigate this risk. Additionally, ensuring the fixed fee adequately incentivizes performance and efficiency, rather than just cost recovery, is important for value.
How effective are the competition dynamics in ensuring value for taxpayers on this contract?
The contract was awarded under 'full and open competition' with two bidders. This level of competition, while not extensive, is generally positive for taxpayers as it allows multiple companies to propose solutions and pricing. The presence of two bidders suggests that the market is not overly concentrated, and there is some pressure to offer competitive terms. However, the effectiveness is contingent on the rigor of the evaluation process and the government's ability to negotiate favorable terms. If the requirements were highly specialized, limiting the number of capable bidders, the competitive pressure might be less intense than in a broader market. Ultimately, the value realized depends on how well the government leveraged this competition to secure the best technical solution at a fair price.
What is the historical spending trend for system engineering services within SPAWAR or the Navy?
Historical spending on system engineering services within SPAWAR and the broader Navy has generally trended upwards, reflecting the increasing complexity and reliance on advanced IT and C4I systems. The Navy continuously invests in modernizing its platforms and networks, requiring significant engineering support. Analyzing past SPAWAR budgets and contract awards for similar services would reveal trends in contract values, durations, and types (e.g., CPFF, FFP). This specific $128.6 million award should be viewed within this context of sustained investment in naval IT capabilities. Fluctuations may occur based on strategic priorities, technological advancements, and overall defense spending levels, but the underlying need for robust system engineering remains a constant.
What are the potential implications of this contract on workforce development and specialized skills in the defense IT sector?
This contract has significant implications for workforce development within the defense IT sector. Awarding $128.6 million for system engineering services signals a sustained demand for highly skilled professionals, including systems engineers, cybersecurity experts, network architects, and software developers with defense clearances. This demand can stimulate training programs, university partnerships, and career development opportunities within the industry. Companies like Peraton Inc. often invest in their workforce to meet these specialized needs. The long duration of the contract provides job stability for the personnel involved and encourages the development of niche expertise critical to naval IT operations. It also highlights the ongoing need for talent in areas like cloud computing, data analytics, and artificial intelligence within defense applications.
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: N0002408R3136
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 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: $158,317,125
Exercised Options: $158,317,125
Current Obligation: $128,565,366
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: NO
Parent Contract
Parent Award PIID: N0017805D4395
IDV Type: IDC
Timeline
Start Date: 2008-10-21
Current End Date: 2013-11-15
Potential End Date: 2013-11-15 00:00:00
Last Modified: 2024-09-12
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