DoD's $14.5M FFP Contract for Wired Telecom Services with Peraton Faces Scrutiny Over Value and Competition
Contract Overview
Contract Amount: $14,492,551 ($14.5M)
Contractor: Peraton Enterprise Solutions LLC
Awarding Agency: Department of Defense
Start Date: 2007-10-01
End Date: 2008-09-30
Contract Duration: 365 days
Daily Burn Rate: $39.7K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 2
Pricing Type: FIRM FIXED PRICE
Sector: IT
Official Description: FFP MONTHLY RECURRING SERVICES. O&M
Place of Performance
Location: WASHINGTON, DISTRICT OF COLUMBIA County, DISTRICT OF COLUMBIA, 20522
Plain-Language Summary
Department of Defense obligated $14.5 million to PERATON ENTERPRISE SOLUTIONS LLC for work described as: FFP MONTHLY RECURRING SERVICES. O&M Key points: 1. The contract's value of $14.5M for recurring services warrants a closer look at its ongoing cost-effectiveness. 2. While awarded under full and open competition, the specific pricing and vendor performance need detailed assessment. 3. Potential risks include vendor lock-in and the long-term sustainability of recurring service costs. 4. The IT sector, particularly telecommunications infrastructure, is critical but prone to rapid technological shifts.
Value Assessment
Rating: fair
The contract's $14.5M total value for a one-year period suggests a significant recurring cost. Benchmarking against similar wired telecommunications carrier contracts is essential to determine if the pricing is competitive and reflects fair market value for the services provided.
Cost Per Unit: $39,706 per day
Competition Analysis
Competition Level: full-and-open
Awarded under full and open competition, this method theoretically allows for the best price discovery. However, the effectiveness of this competition in securing optimal pricing for recurring services over its duration needs to be verified through post-award analysis.
Taxpayer Impact: Taxpayers are impacted by the total $14.5M expenditure. Ensuring this contract represents a cost-effective use of funds is crucial for fiscal responsibility.
Public Impact
Ensures critical wired telecommunications infrastructure for the Air Force remains operational. Supports national defense by providing essential communication services. The recurring nature of the contract means ongoing budget allocation is required. Potential for service disruptions if vendor performance falters.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Recurring cost model may not be the most economical long-term.
- Lack of detailed performance metrics provided.
- Potential for price creep over contract duration.
Positive Signals
- Awarded through full and open competition.
- Provides essential communication services.
- Fixed-price contract limits cost overrun risk for the government.
Sector Analysis
This contract falls within the IT sector, specifically wired telecommunications carriers, a vital component of government operations. Spending benchmarks in this area vary widely based on service scope, but recurring operational and maintenance costs for large-scale networks can be substantial.
Small Business Impact
The data does not indicate any specific provisions or set-asides for small businesses in this contract. The focus appears to be on a large, established provider capable of handling enterprise-level telecommunications services.
Oversight & Accountability
Oversight would typically involve monitoring vendor performance against contract requirements and ensuring timely delivery of services. The fixed-price nature might reduce direct financial oversight needs, but service quality and adherence to terms remain critical.
Related Government Programs
- Wired Telecommunications Carriers
- Department of Defense Contracting
- Department of the Air Force Programs
Risk Flags
- Potential for cost escalation in future contract renewals.
- Dependence on a single vendor for critical infrastructure.
- Lack of transparency on specific service components.
- Long-term contract duration may not adapt to technological advancements.
Tags
wired-telecommunications-carriers, department-of-defense, dc, do, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $14.5 million to PERATON ENTERPRISE SOLUTIONS LLC. FFP MONTHLY RECURRING SERVICES. O&M
Who is the contractor on this award?
The obligated recipient is PERATON ENTERPRISE SOLUTIONS LLC.
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 $14.5 million.
What is the period of performance?
Start: 2007-10-01. End: 2008-09-30.
What specific wired telecommunications services are included in this $14.5M contract, and how do they align with current Air Force operational needs?
The contract covers recurring services for wired telecommunications carriers, essential for maintaining the Air Force's communication infrastructure. Detailed service descriptions are needed to assess their relevance to current operational requirements and ensure no redundant or outdated services are being funded. This clarity is vital for justifying the significant recurring expenditure.
How was the $39,706 daily rate benchmarked against industry standards during the full and open competition?
During the full and open competition, the government should have benchmarked the proposed daily rate against industry standards for similar wired telecommunications services. This involves comparing the rate to market data, historical contract prices, and potentially soliciting competitive bids to ensure the selected price reflects fair market value and offers good value for taxpayer money.
What are the key performance indicators (KPIs) for this contract, and how is vendor performance being measured to ensure effectiveness?
Key performance indicators for this contract should focus on service availability, uptime, response times for outages, and adherence to service level agreements. Effective oversight requires regular monitoring of these KPIs to ensure Peraton Enterprise Solutions LLC is meeting its contractual obligations and providing reliable telecommunications services critical to the Department of Defense's mission.
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: NEGOTIATED PROPOSAL/QUOTE
Offers Received: 2
Pricing Type: FIRM FIXED PRICE (J)
Contractor Details
Parent Company: HP, Inc. (UEI: 009122532)
Address: 13600 EDS DR, HERNDON, VA, 11
Business Categories: Category Business, Limited Liability Corporation, Not Designated a Small Business
Financial Breakdown
Contract Ceiling: $14,492,551
Exercised Options: $14,492,551
Current Obligation: $14,492,551
Parent Contract
Parent Award PIID: GS00T03AHD0008
IDV Type: IDC
Timeline
Start Date: 2007-10-01
Current End Date: 2008-09-30
Potential End Date: 2008-09-30 00:00:00
Last Modified: 2011-09-07
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