DoD's $23.1M data services contract awarded to Peraton Inc. raises questions on competition and value
Contract Overview
Contract Amount: $23,098,614 ($23.1M)
Contractor: Peraton Inc.
Awarding Agency: Department of Defense
Start Date: 2022-07-14
End Date: 2024-05-09
Contract Duration: 665 days
Daily Burn Rate: $34.7K/day
Competition Type: NOT COMPETED
Pricing Type: COST PLUS FIXED FEE
Sector: IT
Official Description: PRODUCT DATA SUPPORT SERVICES
Place of Performance
Location: WARNER ROBINS, HOUSTON County, GEORGIA, 31088
State: Georgia Government Spending
Plain-Language Summary
Department of Defense obligated $23.1 million to PERATON INC. for work described as: PRODUCT DATA SUPPORT SERVICES Key points: 1. The contract's value of $23.1 million over its period of performance suggests a significant investment in essential data processing and hosting services. 2. Awarded on a 'cost plus fixed fee' basis, the pricing structure requires careful scrutiny to ensure the government is not overpaying for services rendered. 3. The absence of a competitive bidding process for this substantial contract warrants an investigation into potential missed opportunities for cost savings. 4. The contract's duration of 665 days indicates a medium-term commitment, requiring ongoing performance monitoring. 5. The classification of the North American Industry Classification System (NAICS) code 518210 points to a market segment with established providers, making the lack of competition more notable. 6. The contract's 'GA' (Georgia) state designation highlights a specific geographic focus for these critical data services.
Value Assessment
Rating: questionable
Benchmarking the value of this $23.1 million contract is challenging without detailed cost breakdowns and comparisons to similar 'cost plus fixed fee' awards for data processing and hosting. The 'cost plus fixed fee' structure, while allowing for flexibility, can sometimes lead to higher overall costs if not managed rigorously. Without competitive bids, it's difficult to ascertain if the fixed fee accurately reflects market rates or if the government secured the best possible price. Further analysis of the contractor's historical performance and profit margins on similar contracts would be necessary to provide a more definitive value assessment.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was awarded on a sole-source basis, meaning it was not competed among multiple vendors. This approach bypasses the standard procurement process designed to foster competition and identify the most cost-effective solution. The lack of competition raises concerns about whether the government explored all available options and secured the best possible pricing and terms. Without a competitive solicitation, it is difficult to assess the range of potential bidders or the market's response to such a requirement.
Taxpayer Impact: Taxpayers may have missed out on potential cost savings that could have been achieved through a competitive bidding process. Sole-source awards can sometimes result in higher prices compared to those determined through open market competition.
Public Impact
The Department of the Air Force benefits from essential computing infrastructure, data processing, and web hosting services critical for its operations. The contract supports the delivery of vital data services, likely underpinning various defense-related functions and information management systems. The geographic impact is concentrated in Georgia, where the services are being delivered, potentially supporting local IT infrastructure and personnel. While specific workforce implications are not detailed, such contracts often involve skilled IT professionals, contributing to the tech labor market in the service delivery region.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Lack of competitive bidding for a significant contract value may indicate missed opportunities for cost savings.
- The 'cost plus fixed fee' contract type requires diligent oversight to prevent cost overruns and ensure fair pricing.
- Limited transparency on the justification for a sole-source award makes it difficult to assess the procurement process's integrity.
- The absence of specific performance metrics in the provided data makes it hard to evaluate the contractor's effectiveness.
- The contract's duration and value warrant ongoing monitoring for potential scope creep or inefficiencies.
Positive Signals
- The contract ensures the Department of the Air Force receives critical data processing and hosting services.
- 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 a degree of cost predictability for the government.
- The contract is associated with a specific NAICS code, indicating a defined area of service delivery.
- The contract is being performed in Georgia, potentially supporting regional economic activity.
Sector Analysis
The contract falls within the IT and data services sector, specifically NAICS code 518210 (Computing Infrastructure Providers, Data Processing, Web Hosting, and Related Services). This is a large and growing market driven by increasing data volumes and the need for robust cloud and data management solutions. Federal spending in this area is substantial, supporting everything from basic IT infrastructure to advanced analytics and cybersecurity. Comparable spending benchmarks would typically involve analyzing other large-scale data hosting and processing contracts awarded by federal agencies, looking at pricing models, service levels, and competitive dynamics.
Small Business Impact
The provided data indicates that this contract was not set aside for small businesses (ss: false, sb: false). As a sole-source award, it did not involve a competitive process where small business participation could be specifically encouraged or mandated through subcontracting goals. This means that opportunities for small businesses to contribute to this specific contract are likely limited unless Peraton Inc. voluntarily engages them as subcontractors. The impact on the small business ecosystem for this particular award is therefore minimal, as it bypassed the typical mechanisms designed to foster small business inclusion in federal contracting.
Oversight & Accountability
Oversight for this contract would primarily fall under the Department of the Air Force's contracting and program management offices. As a 'cost plus fixed fee' contract, rigorous financial oversight is crucial to monitor expenditures against the agreed-upon fixed fee and ensure that costs are reasonable and allowable. Transparency regarding the justification for the sole-source award and the contractor's performance metrics would be key to assessing accountability. 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
- Cloud Computing Services
- Data Center Operations
- Information Technology Infrastructure Support
- Defense Information Systems Agency (DISA) Contracts
- General Services Administration (GSA) IT Schedule Contracts
Risk Flags
- Sole-source award without clear justification
- Potential for inflated pricing due to lack of competition
- Insufficient data to benchmark value-for-money
- Limited transparency on contractor performance metrics
Tags
it, defense, department-of-defense, air-force, data-processing, web-hosting, computing-infrastructure, sole-source, cost-plus-fixed-fee, delivery-order, georgia, peraton-inc
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $23.1 million to PERATON INC.. PRODUCT DATA 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 Air Force).
What is the total obligated amount?
The obligated amount is $23.1 million.
What is the period of performance?
Start: 2022-07-14. End: 2024-05-09.
What is Peraton Inc.'s track record with the Department of Defense for similar data services contracts?
Peraton Inc. has a significant history of contracting with the Department of Defense (DoD) across various IT and technical services. While specific details on their performance for similar data processing and hosting contracts are not provided here, their extensive portfolio suggests experience in managing large-scale government IT requirements. A deeper dive into Peraton's contract history with the DoD, including past performance reviews, contract modifications, and any reported issues or successes, would be necessary to fully assess their track record for this specific type of service. This would involve reviewing contract databases and agency performance reports to understand their reliability, technical capabilities, and adherence to contractual obligations in delivering complex IT solutions.
How does the 'cost plus fixed fee' pricing structure compare to other contract types for similar IT services?
The 'cost plus fixed fee' (CPFF) contract type is often used when the scope of work is not precisely defined or when there is a high degree of uncertainty in the costs. It allows the contractor to recover all allowable costs incurred, plus a fixed fee representing profit. Compared to fixed-price contracts, CPFF can offer more flexibility but carries a higher risk of cost overruns if not managed diligently. For IT services, fixed-price contracts are generally preferred when requirements are well-defined, as they incentivize efficiency and cost control. However, for complex, evolving IT needs like data processing and hosting, CPFF can be appropriate, provided robust oversight is in place to scrutinize costs and ensure the fixed fee remains reasonable relative to the work performed and market benchmarks.
What are the primary risks associated with awarding a sole-source contract of this magnitude?
The primary risks associated with awarding a sole-source contract of this magnitude, such as the $23.1 million data services contract, include a lack of price competition, potentially leading to inflated costs for the government. Without multiple bids, there's less incentive for the contractor to offer the most competitive pricing. There's also a risk of reduced innovation and service quality, as the absence of competition can lessen the pressure to excel. Furthermore, sole-source awards can raise concerns about fairness and transparency in the procurement process, potentially undermining public trust. Agencies must provide a strong justification for sole-sourcing, often citing unique capabilities or urgent needs, to mitigate these risks and demonstrate that it was the only viable option.
What are the potential implications of this contract on the broader IT services market for the Department of Defense?
This contract, by being awarded sole-source, means that a significant portion of the DoD's spending on data processing and hosting services in this specific area is directed to a single provider, Peraton Inc. This can limit the market entry and growth opportunities for other IT service providers who might have offered competitive solutions. It also signals to the market that the DoD may rely on specific vendors for certain critical services, potentially influencing how other companies position themselves for future contracts. While it ensures continuity of service for the DoD, it could also reduce the overall competitive landscape for similar future procurements if not balanced with more open competition elsewhere.
How does the geographic designation 'GA' (Georgia) influence the contract's execution and oversight?
The 'GA' designation indicates that the contract's performance or primary place of service delivery is in Georgia. This influences the contract by potentially directing funds and economic activity to that region. Oversight might involve personnel or resources located within or near Georgia to monitor contractor performance, conduct site visits, and ensure compliance with contractual terms. It could also imply that the specific data infrastructure or personnel are based in Georgia. While the federal agency overseeing the contract may be headquartered elsewhere, the geographic focus necessitates consideration of local logistics, regulations, and potentially state-level economic impacts.
Industry Classification
NAICS: Information › Computing Infrastructure Providers, Data Processing, Web Hosting, and Related Services › Computing Infrastructure Providers, Data Processing, Web Hosting, and Related Services
Product/Service Code: IT AND TELECOM - INFORMATION TECHNOLOGY AND TELECOMMUNICATIONS › IT AND TELECOM - PLATFORM
Competition & Pricing
Extent Competed: NOT COMPETED
Solicitation Procedures: ONLY ONE SOURCE
Solicitation ID: FA853022R0004
Pricing Type: COST PLUS FIXED FEE (U)
Evaluated Preference: NONE
Contractor Details
Address: 12975 WORLDGATE DR, 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: $23,098,614
Exercised Options: $23,098,614
Current Obligation: $23,098,614
Subaward Activity
Number of Subawards: 35
Total Subaward Amount: $12,865,735
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: YES
Parent Contract
Parent Award PIID: FA857120D0006
IDV Type: IDC
Timeline
Start Date: 2022-07-14
Current End Date: 2024-05-09
Potential End Date: 2024-05-09 00:00:00
Last Modified: 2026-01-14
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