DoD Awards $279M for Agile Software Services to Peraton Inc., Amidst Concerns Over Value and Competition
Contract Overview
Contract Amount: $279,096,622 ($279.1M)
Contractor: Peraton Inc.
Awarding Agency: Department of Defense
Start Date: 2022-04-15
End Date: 2025-09-04
Contract Duration: 1,238 days
Daily Burn Rate: $225.4K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 1
Pricing Type: FIRM FIXED PRICE
Sector: IT
Official Description: AGILE SOFTWARE SERVICES
Place of Performance
Location: HERNDON, FAIRFAX County, VIRGINIA, 20170
State: Virginia Government Spending
Plain-Language Summary
Department of Defense obligated $279.1 million to PERATON INC. for work described as: AGILE SOFTWARE SERVICES Key points: 1. Significant contract value of $279 million for computer systems design services. 2. Peraton Inc. is the sole awardee, raising questions about competitive pricing. 3. The contract is for Agile Software Services, a critical area for modernization. 4. Potential risks include limited competition impacting cost-effectiveness for taxpayers.
Value Assessment
Rating: fair
The contract value of $279 million is substantial. Benchmarking against similar Agile software development contracts is difficult without more detailed scope information. The fixed-price nature suggests an attempt at cost control, but the lack of competitive bids could inflate the price.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
Although advertised as full and open, only one award was made. This suggests limited actual competition or that Peraton was the only viable bidder. The impact on price discovery is likely negative, as a lack of competing bids reduces downward pressure on costs.
Taxpayer Impact: The significant contract value means taxpayers are exposed to potential overpayment if the price was not adequately driven down by competition.
Public Impact
Taxpayers may be paying a premium due to limited competition. The Department of the Army receives critical software services, potentially impacting readiness. The long contract duration (over 3 years) means sustained financial commitment. Focus on Agile development could lead to more adaptable and modern systems.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Limited competition despite 'full and open' solicitation.
- High contract value without clear competitive pressure.
- Potential for cost overruns if scope is not tightly managed.
Positive Signals
- Focus on Agile methodology for software development.
- Firm Fixed Price contract type aims for cost certainty.
- Awarded to a known entity with experience in the sector.
Sector Analysis
This contract falls under Computer Systems Design Services, a key sector for government IT modernization. The benchmark for such contracts varies widely based on complexity and scope, but $279 million is a substantial investment, suggesting a large-scale or long-term project.
Small Business Impact
The contract was not awarded to small businesses, and there is no indication of subcontracting goals for small businesses. This represents a missed opportunity to support the small business sector within this significant IT spending.
Oversight & Accountability
The 'full and open' solicitation followed by a single award warrants further review by oversight bodies to ensure the procurement process was robust and that the government received fair value. Accountability for the pricing and performance will be crucial.
Related Government Programs
- Computer Systems Design Services
- Department of Defense Contracting
- Department of the Army Programs
Risk Flags
- Limited competition despite 'full and open' solicitation.
- High contract value without clear competitive pressure.
- Potential for cost overruns if scope is not tightly managed.
- Lack of small business participation.
Tags
computer-systems-design-services, department-of-defense, va, delivery-order, 100m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $279.1 million to PERATON INC.. AGILE SOFTWARE 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 Army).
What is the total obligated amount?
The obligated amount is $279.1 million.
What is the period of performance?
Start: 2022-04-15. End: 2025-09-04.
What specific factors led to only one bid being submitted for this 'full and open' solicitation, and how does this impact the government's ability to ensure fair pricing?
The limited competition, despite a 'full and open' solicitation, raises concerns about the procurement process. Potential reasons include overly restrictive requirements, a lack of market awareness, or a highly specialized niche. This lack of competitive pressure likely resulted in a higher price than could have been achieved through robust bidding, impacting the government's value for money.
How will the government ensure effective oversight and performance management for Agile software development services under this large, single-award contract to mitigate risks?
Effective oversight will require dedicated government personnel with expertise in Agile methodologies and contract management. This includes rigorous monitoring of deliverables, regular performance reviews, and clear communication channels with Peraton. Establishing key performance indicators (KPIs) tied to project milestones and software quality will be crucial for accountability and ensuring the services meet the Department of the Army's needs.
Given the $279 million value, what are the primary risks associated with Peraton's sole award for Agile Software Services, and what mitigation strategies are in place?
The primary risk is the potential for inflated costs due to limited competition. Other risks include vendor lock-in, potential for scope creep, and performance issues if the vendor under-delivers. Mitigation strategies should include strong contract management, clearly defined milestones, performance-based incentives, and potentially seeking competitive bids for future task orders or follow-on contracts if feasible.
Industry Classification
NAICS: Professional, Scientific, and Technical Services › Computer Systems Design and Related Services › Computer Systems Design Services
Product/Service Code: IT AND TELECOM - INFORMATION TECHNOLOGY AND TELECOMMUNICATIONS › IT AND TELECOM - APLLICATIONS
Competition & Pricing
Extent Competed: FULL AND OPEN COMPETITION
Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY
Offers Received: 1
Pricing Type: FIRM FIXED PRICE (J)
Evaluated Preference: NONE
Contractor Details
Address: 12975 WORLDGATE DR 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: $371,936,580
Exercised Options: $284,407,758
Current Obligation: $279,096,622
Subaward Activity
Number of Subawards: 1
Total Subaward Amount: $377,117,318
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: NO
Parent Contract
Parent Award PIID: 47QTCK18D0011
IDV Type: GWAC
Timeline
Start Date: 2022-04-15
Current End Date: 2025-09-04
Potential End Date: 2026-04-13 00:00:00
Last Modified: 2025-12-22
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