DoD's $64M Eastern Range Command Destruct Modernization contract awarded to Peraton Inc. with no competition
Contract Overview
Contract Amount: $64,051,201 ($64.1M)
Contractor: Peraton Inc.
Awarding Agency: Department of Defense
Start Date: 2014-09-24
End Date: 2023-09-23
Contract Duration: 3,286 days
Daily Burn Rate: $19.5K/day
Competition Type: NOT COMPETED
Number of Offers Received: 1
Pricing Type: FIXED PRICE INCENTIVE
Sector: Defense
Official Description: IGF::OT::IGF EASTERN RANGE COMMAND DESTRUCT MODERNIZATION
Place of Performance
Location: HERNDON, FAIRFAX County, VIRGINIA, 20170
State: Virginia Government Spending
Plain-Language Summary
Department of Defense obligated $64.1 million to PERATON INC. for work described as: IGF::OT::IGF EASTERN RANGE COMMAND DESTRUCT MODERNIZATION Key points: 1. The contract's value of $64 million over its nearly 9-year duration suggests a significant investment in critical infrastructure. 2. The lack of competition raises concerns about potential overpricing and limited opportunities for innovative solutions. 3. The 'Other Communications Equipment Manufacturing' NAICS code indicates a focus on specialized hardware, potentially for command and control systems. 4. The contract's fixed-price incentive structure aims to balance cost control with performance incentives, but its effectiveness is unclear without performance data. 5. Awarded to Peraton Inc., a large defense contractor, this contract may reflect a consolidation trend within the sector. 6. The long duration of the contract (3286 days) implies a need for sustained support and modernization efforts for the Eastern Range Command.
Value Assessment
Rating: questionable
Benchmarking the value of this contract is challenging due to the lack of publicly available comparable data for similar 'Destruct Modernization' efforts within the DoD. The fixed-price incentive (FPI) contract type suggests an attempt to control costs, but without insight into the contractor's cost structure or performance against targets, assessing true value-for-money is difficult. The absence of competition further complicates a fair price assessment, as market forces were not leveraged to drive down costs. The total value of over $64 million spread across nearly nine years indicates a substantial, long-term commitment.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was awarded on a sole-source basis, meaning the Department of the Air Force did not conduct a competitive bidding process. This typically occurs when a specific contractor is deemed the only source capable of fulfilling the requirement, often due to proprietary technology, unique expertise, or urgent national security needs. The lack of competition limits the government's ability to explore alternative solutions or secure the most favorable pricing through market dynamics.
Taxpayer Impact: Sole-source awards can potentially lead to higher costs for taxpayers as the government does not benefit from the price reductions typically achieved through competitive bidding. It also reduces the incentive for contractors to offer their best pricing upfront.
Public Impact
The primary beneficiaries are likely the Department of Defense and specifically the Air Force, ensuring the operational readiness and modernization of the Eastern Range Command. The services delivered involve the modernization of command and control systems, crucial for managing space launch activities and ensuring national security. The geographic impact is centered around the Eastern Range, which includes facilities like Cape Canaveral Space Force Station in Florida, supporting critical space operations. Workforce implications may include specialized technical roles for engineers, technicians, and project managers involved in the modernization and maintenance of these systems.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Lack of competition may lead to higher costs for taxpayers.
- Sole-source award limits opportunities for other capable firms.
- Long contract duration could mask inefficiencies if not closely monitored.
- Absence of detailed performance metrics makes value assessment difficult.
Positive Signals
- The contract aims to modernize critical command and control infrastructure.
- Fixed-price incentive structure attempts to align contractor and government interests.
- Peraton Inc. is an established contractor with experience in defense systems.
Sector Analysis
The defense sector, particularly within communications equipment and command and control systems, is characterized by high technological complexity and significant government investment. Contracts in this space often involve specialized manufacturing and integration services. The market size for such specialized defense electronics is substantial, driven by ongoing modernization efforts and evolving threat landscapes. This contract fits within the broader category of defense modernization and sustainment, where long-term partnerships and specialized expertise are highly valued.
Small Business Impact
This contract does not appear to have a small business set-aside component, as indicated by 'sb': false. Furthermore, the 'ss': false flag suggests it was not specifically set aside for small businesses. Given the sole-source nature and the likely complexity of the work, it is improbable that significant subcontracting opportunities for small businesses would be mandated or readily available, though the prime contractor may engage them at their discretion.
Oversight & Accountability
Oversight for this contract would primarily fall under the Department of the Air Force's contracting and program management offices. The Inspector General (IG) of the Department of Defense would have jurisdiction to investigate potential fraud, waste, or abuse. Transparency is limited due to the sole-source nature and the classification of defense-related systems, but contract awards and basic details are typically reported in federal procurement databases.
Related Government Programs
- DoD Command and Control Systems Modernization
- Air Force Communications Equipment Procurement
- Eastern Range Operations Support
- Space Launch Infrastructure Modernization
- Defense Communications Network Upgrades
Risk Flags
- Sole-source award
- Lack of competition
- Potential for cost overruns
- Limited transparency
Tags
defense, department-of-defense, air-force, eastern-range, communications-equipment, manufacturing, definitive-contract, fixed-price-incentive, sole-source, virginia, modernization, command-and-control
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $64.1 million to PERATON INC.. IGF::OT::IGF EASTERN RANGE COMMAND DESTRUCT MODERNIZATION
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 $64.1 million.
What is the period of performance?
Start: 2014-09-24. End: 2023-09-23.
What is Peraton Inc.'s track record with similar sole-source defense contracts?
Peraton Inc. has a history of receiving sole-source contracts within the defense sector, often related to specialized intelligence, surveillance, reconnaissance (ISR), and command, control, communications, computers, and intelligence (C4I) systems. Their expertise in these niche areas frequently leads to direct awards when specific capabilities are required. While this can ensure continuity and leverage existing knowledge, it also means that the government relies heavily on Peraton's performance and pricing without the benefit of competitive pressure. Analyzing past sole-source awards to Peraton can provide insights into their pricing structures and the government's rationale for bypassing competition in similar situations, though specific performance data and cost breakdowns are often not publicly disclosed.
How does the $64 million value compare to similar 'Destruct Modernization' contracts?
Direct comparisons for 'Destruct Modernization' contracts are difficult due to the specialized and often classified nature of such systems. However, considering the nearly 9-year duration, $64 million represents an average annual expenditure of approximately $7.1 million. This figure needs to be contextualized within the broader scope of defense modernization programs. For instance, major command and control system upgrades or sustainment contracts for critical infrastructure can range from tens to hundreds of millions of dollars over similar periods. Without specific details on the scope of work, the technology involved, and the number of units or systems being modernized, a precise benchmark is elusive. The lack of competition further complicates a value assessment against potential market alternatives.
What are the primary risks associated with this sole-source contract?
The primary risks associated with this sole-source contract are centered around cost and innovation. Without competition, there is a reduced incentive for Peraton Inc. to offer the most competitive pricing, potentially leading to higher costs for the government and taxpayers. There's also a risk that the government may not be exposed to potentially more innovative or cost-effective solutions that could have emerged from a competitive bidding process. Furthermore, reliance on a single contractor for critical modernization can create vendor lock-in and reduce flexibility in future procurement decisions. Ensuring robust oversight and performance management becomes crucial to mitigate these risks.
How effective is the Fixed Price Incentive (FPI) contract type in managing costs for this program?
The Fixed Price Incentive (FPI) contract type is designed to provide a middle ground between fixed-price and cost-reimbursement contracts, aiming to control costs while allowing for flexibility. In an FPI contract, the final price is adjusted based on the contractor's performance against mutually agreed-upon targets (e.g., cost, schedule, performance). If the contractor performs better than target, both parties share in the savings; if they perform worse, the contractor bears a larger share of the increased cost, up to a ceiling. The effectiveness hinges on the realism of the targets set, the clarity of the incentive metrics, and the rigor of government oversight in monitoring performance and costs. Without insight into the specific targets and outcomes for this contract, it's difficult to definitively assess its effectiveness in managing costs for the Eastern Range Command Destruct Modernization.
What is the historical spending pattern for Eastern Range Command modernization efforts?
Historical spending patterns for Eastern Range Command modernization efforts are not readily available in a consolidated public format. However, the Eastern Range has been a critical component of U.S. space launch operations for decades, managed by the Air Force and now the Space Force. Modernization efforts are typically driven by evolving technology, increased launch cadence, and new mission requirements. Spending would likely have occurred in phases, with significant investments made during major upgrades or transitions, such as the shift to new launch vehicles or the implementation of advanced tracking and communication systems. The current $64 million contract represents a substantial, long-term investment, suggesting a significant modernization initiative is underway, potentially building upon or replacing older systems.
What are the implications of the 'Other Communications Equipment Manufacturing' NAICS code for this contract?
The North American Industry Classification System (NAICS) code 334290, 'Other Communications Equipment Manufacturing,' indicates that the primary focus of this contract is on the production or modification of specialized communication hardware. This could encompass a wide range of equipment, such as transmitters, receivers, antennas, signal processors, or integrated communication systems tailored for the unique operational environment of the Eastern Range Command. This classification suggests that the contract involves tangible equipment rather than purely services, and it places Peraton Inc. within a specific manufacturing sub-sector. It implies that the modernization effort likely involves upgrading or replacing physical communication infrastructure critical for command, control, and data transmission related to space launches and range operations.
Industry Classification
NAICS: Manufacturing › Communications Equipment Manufacturing › Other Communications Equipment Manufacturing
Product/Service Code: ELECTRICAL/ELECTRONIC EQPT COMPNTS
Competition & Pricing
Extent Competed: NOT COMPETED
Solicitation Procedures: ONLY ONE SOURCE
Offers Received: 1
Pricing Type: FIXED PRICE INCENTIVE (L)
Evaluated Preference: NONE
Contractor Details
Parent Company: Veritas Capital Fund Management, L.L.C.
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: $65,311,133
Exercised Options: $64,051,201
Current Obligation: $64,051,201
Actual Outlays: $107,862
Subaward Activity
Number of Subawards: 28
Total Subaward Amount: $27,852,974
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: YES
Timeline
Start Date: 2014-09-24
Current End Date: 2023-09-23
Potential End Date: 2023-09-23 00:00:00
Last Modified: 2023-12-21
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