DoD's $81M IT services contract for cyber center awarded to Peraton Inc. under full and open competition
Contract Overview
Contract Amount: $81,210,021 ($81.2M)
Contractor: Peraton Inc.
Awarding Agency: Department of Defense
Start Date: 2019-07-24
End Date: 2024-01-18
Contract Duration: 1,639 days
Daily Burn Rate: $49.5K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 4
Pricing Type: COST PLUS FIXED FEE
Sector: IT
Official Description: NON-PERSONAL INFORMATION TECHNOLOGY SERVICES FOR THE 2D CYBER CENTER-EUROPE.
Plain-Language Summary
Department of Defense obligated $81.2 million to PERATON INC. for work described as: NON-PERSONAL INFORMATION TECHNOLOGY SERVICES FOR THE 2D CYBER CENTER-EUROPE. Key points: 1. Contract awarded through full and open competition, suggesting a competitive bidding process. 2. The contract type is Cost Plus Fixed Fee, which can lead to cost overruns if not managed carefully. 3. The duration of the contract is over 4 years, indicating a significant, long-term need for these services. 4. The contract is for non-personal IT services, focusing on the operational aspects of the cyber center. 5. The award amount of $81.2 million represents a substantial investment in cyber defense capabilities. 6. The North American Industry Classification System (NAICS) code 517110 points to telecommunications infrastructure services.
Value Assessment
Rating: fair
Benchmarking the value of this $81.2 million contract is challenging without specific performance metrics or comparable contract data. The Cost Plus Fixed Fee (CPFF) contract type introduces inherent risk for cost control, as contractor profit is fixed regardless of actual costs incurred. While the fixed fee provides some incentive for efficiency, the primary cost driver is the reimbursement of actual costs, which can escalate. Without detailed breakdowns of labor categories, rates, and overhead, a precise per-unit cost comparison is not feasible. However, the significant total value suggests a substantial scope of work.
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 bids. The presence of 4 bids suggests a moderate level of competition for this requirement. While four bidders is better than a sole-source or limited competition, it may not represent the maximum possible competition for a contract of this size and scope. The level of competition can influence price discovery, with more bidders generally leading to more competitive pricing.
Taxpayer Impact: A full and open competition with multiple bidders is generally favorable for taxpayers, as it increases the likelihood of receiving competitive pricing and better value for the government's investment.
Public Impact
The primary beneficiaries are the Department of Defense and its personnel, who will receive enhanced cybersecurity support. The contract delivers essential non-personal IT services crucial for the operation and security of the 2D Cyber Center-Europe. Geographic impact is focused on European operations, supporting U.S. military cyber defense posture in the region. Workforce implications include the potential for skilled IT professionals to be engaged in supporting critical defense infrastructure.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Cost Plus Fixed Fee (CPFF) contract type can incentivize cost overruns if not rigorously managed.
- Lack of detailed performance metrics makes objective value assessment difficult.
- The duration of the contract (over 4 years) means potential for sustained cost accumulation.
- Limited public information on the specific IT services provided hinders transparency.
Positive Signals
- Awarded through full and open competition, indicating a competitive bidding process.
- Multiple bidders (4) participated, suggesting some level of market interest and price discovery.
- Contract supports critical cybersecurity functions for the Department of Defense.
- The contract is for non-personal services, potentially reducing direct personnel management complexities for the government.
Sector Analysis
This contract falls within the Information Technology (IT) services sector, specifically related to telecommunications and cybersecurity support. The IT services market is vast and highly competitive, with significant government spending allocated to maintaining and securing digital infrastructure. Contracts like this are crucial for defense agencies to ensure operational readiness and protect sensitive information. Comparable spending benchmarks would typically involve analyzing other large-scale IT service contracts awarded by the DoD or other federal agencies for similar cyber defense or telecommunications support, considering factors like contract type, duration, and scope.
Small Business Impact
The data indicates that small business participation was not a specific set-aside for this contract (ss: false, sb: false). While Peraton Inc. is a large business, the contract does not appear to have explicit provisions for small business set-asides. However, large prime contractors are often required to meet subcontracting goals with small businesses. The extent to which Peraton will utilize small businesses for subcontracting is not detailed in the provided data, but it represents a potential avenue for small business involvement in supporting this significant federal contract.
Oversight & Accountability
Oversight for this contract would primarily fall under the Department of the Army and the Department of Defense's contracting and program management offices. Accountability measures are typically embedded within the contract's terms and conditions, including performance standards, reporting requirements, and payment schedules tied to deliverables. Transparency is facilitated through contract award databases like FPDS, which provide basic information on the award. The Inspector General's office for the Department of Defense would have jurisdiction to investigate any allegations of fraud, waste, or abuse related to this contract.
Related Government Programs
- DoD Cyber Command Services
- Defense Information Technology Contracting
- Network Infrastructure Support Contracts
- European Command IT Services
- Cybersecurity Support Services
Risk Flags
- Cost Plus Fixed Fee contract type carries inherent cost overrun risk.
- Limited public data on specific performance metrics hinders value assessment.
- Potential for scope creep in complex IT and cybersecurity services.
- Contract duration exceeds four years, increasing long-term financial commitment.
Tags
it-services, department-of-defense, cybersecurity, cost-plus-fixed-fee, full-and-open-competition, wired-telecommunications-carriers, defense-agency, europe, it-infrastructure, contract-award, peraton-inc
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $81.2 million to PERATON INC.. NON-PERSONAL INFORMATION TECHNOLOGY SERVICES FOR THE 2D CYBER CENTER-EUROPE.
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 $81.2 million.
What is the period of performance?
Start: 2019-07-24. End: 2024-01-18.
What is the track record of Peraton Inc. in managing Cost Plus Fixed Fee (CPFF) contracts, particularly for IT services within the Department of Defense?
Peraton Inc. has a significant history of holding various federal contracts, including those with the Department of Defense. Analyzing their performance on CPFF contracts requires a deeper dive into contract performance reports, past performance reviews, and any documented issues or successes. CPFF contracts are complex, requiring robust government oversight to manage costs effectively. Peraton's experience suggests they possess the capability to manage such contracts, but specific details regarding their success rate in controlling costs and delivering value under CPFF arrangements for IT services would necessitate access to more granular performance data and historical contract administration records. Without this, it's difficult to definitively assess their specific track record on this contract type beyond their general presence in the federal contracting space.
How does the $81.2 million award compare to similar IT services contracts for cyber centers within the DoD or other federal agencies?
Comparing this $81.2 million contract requires identifying similar procurements for IT services supporting cyber centers. Factors such as the scope of services (e.g., network operations, cybersecurity, software development), contract duration, and contract type (e.g., CPFF, FFP) are critical for a meaningful comparison. Generally, large-scale IT support for critical infrastructure like cyber centers can range from tens to hundreds of millions of dollars over several years. The 'full and open competition' with four bidders suggests a competitive market, which typically influences pricing. Without specific comparable contract data, it's difficult to definitively state if $81.2 million is high or low, but it represents a substantial investment indicative of a significant operational requirement for the 2D Cyber Center-Europe.
What are the primary risks associated with the Cost Plus Fixed Fee (CPFF) contract type for this specific cybersecurity IT services requirement?
The primary risk with a CPFF contract is the potential for cost overruns. While the contractor's profit is fixed, the government reimburses actual costs incurred. If the contractor is inefficient or if unforeseen technical challenges arise, the total cost to the government can exceed initial estimates. For cybersecurity IT services, risks include the complexity of evolving threats, the need for specialized personnel, and potential for scope creep if requirements are not tightly defined. Effective government oversight, including detailed cost monitoring, performance reviews, and robust change management processes, is crucial to mitigate these risks and ensure the contractor remains incentivized to control costs while delivering necessary services.
What is the historical spending pattern for non-personal IT services for the 2D Cyber Center-Europe or similar entities within the DoD?
Historical spending data for the 2D Cyber Center-Europe specifically is not readily available in the provided snippet. However, federal spending on IT services, particularly for defense and cybersecurity, has been consistently high and is generally increasing due to the growing reliance on digital infrastructure and evolving threat landscapes. Agencies like the Department of Defense allocate significant portions of their budgets to IT modernization, maintenance, and security. To understand historical patterns for this specific center or similar entities, one would need to access historical contract databases (like FPDS) and search for previous contracts awarded for IT services to the 2D Cyber Center-Europe or comparable cyber operations units within the DoD, analyzing award amounts, contract types, and durations over time.
How does the level of competition (4 bidders) impact the potential value for money and taxpayer cost for this contract?
Having four bidders in a full and open competition generally suggests a healthy level of market interest and provides a basis for price discovery. More bidders typically lead to more competitive pricing as companies vie for the contract. This increased competition can result in better value for money for the government and, consequently, for taxpayers. While four bidders is a positive sign, the optimal level of competition can vary depending on the market's size and complexity. If the market could realistically support more than four capable bidders, the value for money might be even greater. However, four bidders is a reasonable outcome that likely prevented a sole-source situation and introduced competitive pressures on pricing.
Industry Classification
NAICS: Information › Wired and Wireless Telecommunications (except Satellite) › Wired Telecommunications Carriers
Product/Service Code: IT AND TELECOM - INFORMATION TECHNOLOGY AND TELECOMMUNICATIONS › ADP AND TELECOMMUNICATIONS
Competition & Pricing
Extent Competed: FULL AND OPEN COMPETITION
Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY
Offers Received: 4
Pricing Type: COST PLUS FIXED FEE (U)
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: $87,436,943
Exercised Options: $81,760,602
Current Obligation: $81,210,021
Actual Outlays: $2,058,717
Subaward Activity
Number of Subawards: 183
Total Subaward Amount: $188,205,956
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: NO
Parent Contract
Parent Award PIID: FA873215D0046
IDV Type: IDC
Timeline
Start Date: 2019-07-24
Current End Date: 2024-01-18
Potential End Date: 2024-04-18 00:00:00
Last Modified: 2025-12-31
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