DoD's $18.4M TMPC Product Upgrades contract awarded to Peraton Technology Services Inc. raises value concerns

Contract Overview

Contract Amount: $18,435,806 ($18.4M)

Contractor: Peraton Technology Services Inc.

Awarding Agency: Department of Defense

Start Date: 2021-11-09

End Date: 2024-12-31

Contract Duration: 1,148 days

Daily Burn Rate: $16.1K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: TMPC PRODUCT UPGRADES

Place of Performance

Location: CHANTILLY, FAIRFAX County, VIRGINIA, 20151

State: Virginia Government Spending

Plain-Language Summary

Department of Defense obligated $18.4 million to PERATON TECHNOLOGY SERVICES INC. for work described as: TMPC PRODUCT UPGRADES Key points: 1. The contract's cost-plus-fixed-fee structure may incentivize higher spending without guaranteed cost savings. 2. Limited competition for this significant engineering services contract warrants scrutiny of pricing and value. 3. The extended duration of over three years suggests a substantial, ongoing need for these upgrades. 4. The absence of small business participation raises questions about broader economic impact. 5. Performance context is limited due to the 'not competed' award, making direct comparisons difficult.

Value Assessment

Rating: questionable

The $18.4 million total contract value for TMPC product upgrades, awarded on a cost-plus-fixed-fee basis, presents a potential value concern. Without a competitive bidding process, it is difficult to benchmark the pricing against market rates or similar services. The cost-plus structure, while offering flexibility, can lead to cost overruns if not rigorously managed. Further analysis is needed to determine if the fixed fee adequately incentivizes efficiency and cost control for Peraton Technology Services Inc.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded as 'NOT COMPETED,' indicating a sole-source procurement. This significantly limits the opportunity for price discovery and potentially leads to higher costs for the government compared to a fully competed contract. The lack of multiple bidders means the Department of the Navy did not benefit from the competitive pressures that typically drive down prices and encourage innovation.

Taxpayer Impact: Taxpayers may be paying a premium for these TMPC product upgrades due to the absence of a competitive bidding process. The government did not leverage market forces to secure the best possible price and value.

Public Impact

The primary beneficiaries are the Department of the Navy, receiving upgraded TMPC products essential for its operations. The services delivered involve engineering and product upgrades, crucial for maintaining and enhancing military capabilities. The geographic impact is primarily within the Department of Defense's operational areas, though specific locations are not detailed. Workforce implications may include specialized engineering roles required for the upgrades, potentially benefiting skilled labor within Peraton Technology Services Inc.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition may lead to inflated costs.
Cost-plus-fixed-fee structure could incentivize higher spending.
No small business set-aside indicates limited broader economic impact.
Limited public information on specific performance metrics.

Positive Signals

Contract awarded to an established entity, Peraton Technology Services Inc.
Clear end date suggests defined project scope.
Engineering services are critical for defense modernization.

Sector Analysis

This contract falls within the Engineering Services sector (NAICS 541330), a critical component of the broader defense industrial base. The market for defense engineering services is substantial, driven by the continuous need for modernization and technological advancement. Contracts like this are essential for maintaining the operational readiness and technological superiority of military branches. Benchmarking spending in this area requires comparison with similar upgrade and engineering contracts across various defense agencies.

Small Business Impact

The contract data indicates that this award was not subject to small business set-aside provisions (ss: false, sb: false). This means that opportunities for small businesses to participate, either as prime contractors or through subcontracting, were not explicitly mandated. The absence of a small business focus in this significant contract could limit the infusion of innovation and economic benefits that often accompany small business participation in government contracting.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of the Navy's contracting and program management offices. As a delivery order under a larger contract, its specific oversight mechanisms are tied to the parent contract's structure. Transparency is limited by the sole-source nature of the award. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

Department of Defense IT Upgrades
Navy Engineering Services Contracts
Defense Technology Modernization Programs
Peraton Technology Services Inc. Contracts

Risk Flags

Sole-source award limits price competition.
Cost-plus-fixed-fee structure may lead to cost overruns.
Lack of small business participation.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $18.4 million to PERATON TECHNOLOGY SERVICES INC.. TMPC PRODUCT UPGRADES

Who is the contractor on this award?

The obligated recipient is PERATON TECHNOLOGY SERVICES INC..

Which agency awarded this contract?

Awarding agency: Department of Defense (Department of the Navy).

What is the total obligated amount?

The obligated amount is $18.4 million.

What is the period of performance?

Start: 2021-11-09. End: 2024-12-31.

What is Peraton Technology Services Inc.'s track record with the Department of Defense, particularly on similar engineering or product upgrade contracts?

Peraton Technology Services Inc. has a significant history of contracting with the Department of Defense. While specific details on past performance for TMPC product upgrades are not provided in this data snippet, the company generally holds numerous contracts across various defense agencies for a wide range of services, including IT, engineering, and mission support. Analyzing their broader portfolio reveals a pattern of large-scale awards. However, the 'not competed' nature of this specific $18.4 million contract limits the ability to assess their performance in a competitive environment for this particular service. A deeper dive into past performance evaluations and any reported issues on prior DoD contracts would be necessary for a comprehensive assessment of their track record.

How does the $18.4 million value of this contract compare to similar TMPC product upgrade initiatives or engineering services contracts within the Navy or DoD?

Without specific details on the scope and nature of the 'TMPC product upgrades,' direct comparison is challenging. However, $18.4 million for engineering services and product upgrades is a substantial sum, indicative of a significant project. Within the Department of Defense, engineering services contracts can range from a few million to hundreds of millions of dollars, depending on complexity, duration, and technology involved. Given that this is a sole-source award with a cost-plus-fixed-fee structure, it is crucial to benchmark against other sole-source or limited-competition engineering contracts of similar scale. The absence of competitive bids makes it difficult to ascertain if this represents a fair market price or if a more competitive process could have yielded better value for the taxpayer.

What are the primary risks associated with a sole-source, cost-plus-fixed-fee contract for engineering services like these TMPC product upgrades?

The primary risks associated with this contract structure are twofold. Firstly, the sole-source nature eliminates competitive pressure, potentially leading to higher prices and reduced incentive for the contractor to optimize costs. The government does not benefit from the price discovery that occurs during a competitive bidding process. Secondly, the cost-plus-fixed-fee (CPFF) structure, while providing flexibility for evolving requirements, carries the risk of cost overruns. The 'cost-plus' element means the government reimburses the contractor's allowable costs, and the 'fixed fee' is a predetermined profit. If costs escalate beyond initial estimates, the total contract value could increase, impacting the overall budget. Effective oversight and robust cost-reimbursement controls are critical to mitigate these risks.

What is the expected effectiveness or impact of these TMPC product upgrades on the Department of the Navy's operational capabilities?

The provided data does not detail the specific 'TMPC products' or the nature of the upgrades. However, TMPC often refers to Tactical Military Communications Platforms or similar systems critical for command, control, and communications (C3) within military operations. Upgrades to such systems are typically aimed at enhancing reliability, security, interoperability, and incorporating new technological capabilities. Therefore, the expected effectiveness likely involves improving the Navy's ability to communicate securely and efficiently across various operational environments, potentially increasing situational awareness and command responsiveness. The full impact hinges on the specific functionalities being upgraded and how seamlessly they integrate into existing naval infrastructure.

How has historical spending on TMPC product upgrades or similar engineering services by the Department of the Navy trended over the past five years?

Historical spending data on 'TMPC product upgrades' specifically is not available in this dataset. However, the Department of the Navy consistently invests significant funds in engineering services and technology modernization across its platforms. Spending on communications, command and control systems, and related product upgrades is a perennial requirement. Trends in this area are generally influenced by evolving threats, technological advancements, and strategic defense priorities. Analyzing broader categories like 'Engineering Services' (NAICS 541330) or specific communication system procurements over the past five years would reveal overall spending patterns. It is reasonable to assume that spending on critical infrastructure upgrades like TMPC would remain consistent or increase to maintain technological parity.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Architectural, Engineering, and Related Services › Engineering Services

Product/Service Code: GUIDED MISSLES

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Offers Received: 1

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Address: 15050 CONFERENCE CTR DR, CHANTILLY, VA, 20151

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $19,058,668

Exercised Options: $18,625,407

Current Obligation: $18,435,806

Actual Outlays: $176,391

Subaward Activity

Number of Subawards: 18

Total Subaward Amount: $3,796,696

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: N0001921G0010

IDV Type: BOA

Timeline