DoD awards $44.5M for Hypersonic Test & Evaluation, with Perikin Enterprises LLC leading R&D support

Contract Overview

Contract Amount: $44,554,526 ($44.6M)

Contractor: Perikin Enterprises LLC

Awarding Agency: Department of Defense

Start Date: 2022-06-01

End Date: 2026-05-31

Contract Duration: 1,460 days

Daily Burn Rate: $30.5K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Number of Offers Received: 2

Pricing Type: COST PLUS FIXED FEE

Sector: R&D

Official Description: HYPERSONIC TEST & EVALUATION ADVISORY AND ASSISTANCE SERVICES

Place of Performance

Location: ALBUQUERQUE, BERNALILLO County, NEW MEXICO, 87102

State: New Mexico Government Spending

Plain-Language Summary

Department of Defense obligated $44.6 million to PERIKIN ENTERPRISES LLC for work described as: HYPERSONIC TEST & EVALUATION ADVISORY AND ASSISTANCE SERVICES Key points: 1. Contract focuses on critical research and development in advanced hypersonic technologies. 2. Full and open competition after exclusion of sources indicates a deliberate procurement strategy. 3. Contract duration of 1460 days suggests a long-term need for specialized advisory services. 4. The award is for Cost Plus Fixed Fee, requiring careful monitoring of costs against the fixed fee. 5. Services are essential for advancing national security capabilities in a rapidly evolving technological landscape. 6. The contract's value is significant within the specialized R&D sector for defense applications.

Value Assessment

Rating: good

The contract value of $44.5 million over approximately four years for specialized R&D advisory services appears reasonable given the complexity and criticality of hypersonic technology. Benchmarking against similar large-scale, long-term R&D support contracts within the Department of Defense suggests this award falls within expected parameters for such specialized expertise. The Cost Plus Fixed Fee (CPFF) pricing structure necessitates diligent oversight to ensure costs remain controlled while the fixed fee provides a predictable profit margin for the contractor.

Cost Per Unit: N/A

Competition Analysis

Competition Level: limited

The contract was awarded under 'Full and Open Competition After Exclusion of Sources,' which implies that while the competition was intended to be broad, specific circumstances led to the exclusion of certain potential sources. This could be due to unique requirements, prior performance, or specific technological expertise. The presence of two bidders suggests a degree of competition, but the exclusion of sources may limit the full spectrum of market engagement and potentially impact price discovery.

Taxpayer Impact: While the competition was not entirely unrestricted, the inclusion of at least two bidders provides some level of price negotiation for taxpayers. However, the exclusion of other potential sources might mean that taxpayers are not benefiting from the most competitive pricing achievable in a truly open market.

Public Impact

The Department of Defense, specifically the Air Force, benefits from enhanced advisory and assistance in hypersonic testing and evaluation. Services delivered will support the development and refinement of advanced hypersonic weapon systems and related technologies. The contract's primary geographic impact is likely within New Mexico, where Perikin Enterprises LLC is based, and at various DoD testing facilities. Workforce implications include the potential for highly skilled engineers, scientists, and technical personnel to be engaged in cutting-edge defense research.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost Plus Fixed Fee contracts require robust oversight to prevent cost overruns.
The 'exclusion of sources' in competition may limit the potential for lower pricing.
Long-term contracts can sometimes lead to vendor lock-in if not managed carefully.

Positive Signals

Award to a single contractor suggests confidence in Perikin Enterprises LLC's specialized capabilities.
The contract duration indicates a stable, long-term need for critical R&D support.
Focus on hypersonic technology aligns with national security priorities.

Sector Analysis

The contract falls within the Research and Development sector, specifically focusing on physical sciences and engineering related to defense applications. The market for specialized advisory services in advanced technologies like hypersonics is highly concentrated, with a limited number of firms possessing the requisite expertise. Comparable spending benchmarks in this niche R&D area are difficult to establish precisely due to the proprietary nature of much of this work, but multi-million dollar contracts for long-term support are typical for programs of this strategic importance.

Small Business Impact

This contract does not appear to have a small business set-aside component, as indicated by 'ss': false and 'sb': false. The primary contractor, Perikin Enterprises LLC, is not explicitly identified as a small business in the provided data. Therefore, the direct impact on small business set-asides is minimal. However, the potential for subcontracting opportunities with Perikin Enterprises LLC could exist, offering avenues for small businesses to participate in this significant defense R&D effort, depending on the contractor's subcontracting plan.

Oversight & Accountability

Oversight for this Cost Plus Fixed Fee contract will likely be managed by the contracting officer and program management office within the Department of the Air Force. Accountability measures will focus on adherence to the contract's scope of work, cost controls, and delivery of required advisory services. Transparency will be maintained through regular reporting requirements and contract performance reviews. Inspector General jurisdiction may apply in cases of fraud, waste, or abuse.

Related Government Programs

Hypersonic Weapons Development Programs
Advanced Materials Research Contracts
Aerospace Engineering Support Services
Department of Defense Research and Development Funding
Test and Evaluation Services Contracts

Risk Flags

Potential for cost overruns due to CPFF structure.
Limited competition due to source exclusion may impact price.
Complexity of hypersonic technology introduces inherent R&D risks.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $44.6 million to PERIKIN ENTERPRISES LLC. HYPERSONIC TEST & EVALUATION ADVISORY AND ASSISTANCE SERVICES

Who is the contractor on this award?

The obligated recipient is PERIKIN ENTERPRISES 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 $44.6 million.

What is the period of performance?

Start: 2022-06-01. End: 2026-05-31.

What is Perikin Enterprises LLC's track record with similar Department of Defense contracts, particularly in R&D and advisory services?

A detailed review of Perikin Enterprises LLC's contract history with the Department of Defense would be necessary to fully assess their track record. However, being awarded a significant contract like this for hypersonic test and evaluation advisory services suggests they possess specialized expertise and have likely performed satisfactorily on previous, potentially smaller or related, defense contracts. Further analysis would involve examining past performance reviews, any documented issues or commendations, and the types of services they have provided. Understanding their experience with Cost Plus Fixed Fee contracts and their ability to manage complex R&D projects within budgetary and schedule constraints is crucial for evaluating their suitability for this role.

How does the $44.5 million contract value compare to other advisory and assistance contracts for R&D in the physical sciences within the DoD?

The $44.5 million contract value for Perikin Enterprises LLC's services is substantial and indicative of the high cost associated with specialized research and development support, particularly in cutting-edge fields like hypersonics. When compared to other Advisory and Assistance (A&A) contracts within the DoD's R&D portfolio, this figure is significant but not unprecedented for long-term, complex projects requiring deep technical expertise. Many large-scale R&D programs, especially those involving advanced engineering, testing, and evaluation, often command contract values in the tens to hundreds of millions of dollars over their lifecycle. The specific nature of hypersonic technology, its strategic importance, and the duration of the contract (1460 days) justify this level of investment compared to broader or shorter-term R&D support contracts.

What are the primary risks associated with this Cost Plus Fixed Fee (CPFF) contract structure for the government?

The primary risk associated with a Cost Plus Fixed Fee (CPFF) contract structure for the government is the potential for cost overruns. While the contractor's fee is fixed, the total cost of performing the work is reimbursable. If the contractor incurs higher-than-expected costs due to inefficiencies, poor planning, or unforeseen technical challenges, the government bears the financial burden. This necessitates robust government oversight to monitor expenditures, ensure efficient performance, and validate the necessity of all costs incurred. Without diligent management, the total contract cost could exceed initial estimates, even though the contractor's profit margin remains constant. This risk is amplified in complex R&D environments where uncertainties are inherent.

How effective is the 'Full and Open Competition After Exclusion of Sources' approach in ensuring value for taxpayers in this specific R&D context?

The 'Full and Open Competition After Exclusion of Sources' approach aims to balance the need for broad competition with specific procurement requirements. In this R&D context, it suggests that while the initial solicitation was open, certain sources were later excluded, possibly due to specialized knowledge, security clearances, or unique capabilities essential for hypersonic research. This approach can be effective if the excluded sources were genuinely not viable or if the remaining competition is robust enough to drive competitive pricing. However, if the exclusion significantly limits the number of qualified bidders, it could reduce price competition and potentially lead to higher costs for taxpayers than a truly unrestricted open competition might yield. The effectiveness hinges on the justification for exclusion and the competitiveness among the remaining bidders.

What are the potential long-term implications of this contract on the development of U.S. hypersonic capabilities?

This contract is likely to have significant positive long-term implications for the development of U.S. hypersonic capabilities. By providing dedicated advisory and assistance services for testing and evaluation, it directly supports the refinement, validation, and advancement of these critical technologies. This ensures that the Department of Defense receives expert guidance throughout the complex R&D lifecycle, helping to accelerate the transition of innovative concepts into operational systems. Sustained support in this area can foster technological superiority, enhance national security, and contribute to the overall strategic advantage of the United States in the hypersonic domain. The continuity provided by the contract's duration is crucial for tackling the multifaceted challenges inherent in developing next-generation hypersonic systems.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Scientific Research and Development Services › Research and Development in the Physical, Engineering, and Life Sciences (except Nanotechnology and Biotechnology)

Product/Service Code: SUPPORT SVCS (PROF, ADMIN, MGMT) › PROFESSIONAL SERVICES

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: FA910122R0006

Offers Received: 2

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Parent Company: Perikin Enterprises, LLC

Address: 500 MARQUETTE AVE NW, ALBUQUERQUE, NM, 87102

Business Categories: 8(a) Program Participant, Category Business, Corporate Entity Not Tax Exempt, DoT Certified Disadvantaged Business Enterprise, Hispanic American Owned Business, HUBZone Firm, Limited Liability Corporation, Minority Owned Business, Self-Certified Small Disadvantaged Business, Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $54,046,377

Exercised Options: $51,073,585

Current Obligation: $44,554,526

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline