DoD's $21.1M TMPC Product Upgrades contract awarded to Peraton Technology Services Inc. raises value concerns

Contract Overview

Contract Amount: $21,110,651 ($21.1M)

Contractor: Peraton Technology Services Inc.

Awarding Agency: Department of Defense

Start Date: 2022-11-09

End Date: 2024-10-30

Contract Duration: 721 days

Daily Burn Rate: $29.3K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: FY23 TMPC PRODUCT UPGRADES

Place of Performance

Location: CHANTILLY, FAIRFAX County, VIRGINIA, 20151

State: Virginia Government Spending

Plain-Language Summary

Department of Defense obligated $21.1 million to PERATON TECHNOLOGY SERVICES INC. for work described as: FY23 TMPC PRODUCT UPGRADES Key points: 1. The contract's value-for-money is questionable given the lack of competition and cost-plus fixed fee structure. 2. Sole-source awards limit price discovery and can lead to inflated costs for taxpayers. 3. The contract duration of 721 days for product upgrades warrants scrutiny regarding project scope and efficiency. 4. Performance context is limited as this is a sole-source award with no direct comparison points. 5. The Engineering Services sector sees significant government spending, but this specific award lacks transparency. 6. Risk indicators include the absence of competitive bidding and a cost-plus contract type.

Value Assessment

Rating: questionable

The contract's value is difficult to assess without competitive benchmarks. The Cost Plus Fixed Fee (CPFF) structure, while common for complex or uncertain scopes, can incentivize cost overruns if not managed tightly. Given the $21.1 million award and the absence of competition, it is challenging to determine if the government is receiving optimal value. Further analysis of the contractor's historical performance on similar projects and detailed cost breakdowns would be necessary for a more robust value assessment.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning only one vendor, Peraton Technology Services Inc., was solicited. This approach bypasses the competitive bidding process, which typically leads to better pricing and innovation. The lack of competition here means there is no market pressure to drive down costs or encourage alternative solutions. The justification for a sole-source award would need to be exceptionally strong to ensure taxpayer funds are used efficiently.

Taxpayer Impact: Sole-source awards limit the government's ability to secure the best possible pricing, potentially leading to higher costs for taxpayers. Without competition, there's less incentive for the awarded contractor to offer the most cost-effective solution.

Public Impact

The primary beneficiaries are the Department of the Navy, receiving upgraded TMPC products. The services delivered involve product upgrades, crucial for maintaining operational capabilities. The geographic impact is likely concentrated within Department of Defense facilities, primarily in Virginia where the contractor is located. Workforce implications may include specialized engineering and technical roles required for the upgrades.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competitive bidding on a significant dollar amount.
Cost-plus fixed fee contract type can lead to cost escalation.
Limited transparency into the justification for sole-source award.
Long contract duration for product upgrades may indicate scope creep or inefficiencies.

Positive Signals

Contract awarded to an established entity, Peraton Technology Services Inc.
Contract supports critical Department of Defense product upgrades.
Contract is managed by the Department of the Navy, a major defense agency.

Sector Analysis

The Engineering Services sector is a broad category encompassing a wide range of technical and professional services. Government spending in this sector is substantial, supporting everything from infrastructure development to complex defense systems. This contract, focused on product upgrades, fits within the defense sub-sector of engineering services. Comparable spending benchmarks are difficult to establish without knowing the specific nature of the TMPC products, but large-scale defense system upgrades can range from millions to billions of dollars.

Small Business Impact

This contract was not competed and there is no indication of small business set-asides or subcontracting requirements. As a sole-source award to a large prime contractor, the direct impact on the small business ecosystem is likely minimal unless Peraton Technology Services Inc. voluntarily engages small businesses for subcontracting opportunities. Further investigation into subcontracting plans would be needed to assess any indirect benefits.

Oversight & Accountability

Oversight for this contract would fall under the Department of the Navy's contracting and program management offices. Given the sole-source nature and CPFF structure, rigorous oversight of cost, schedule, and performance is crucial. Transparency regarding the justification for the sole-source award and detailed reporting on cost expenditures would be key accountability measures. The Inspector General for the Department of Defense may have jurisdiction for audits and investigations if concerns arise.

Related Government Programs

Department of Defense IT Modernization Programs
Navy Weapon Systems Upgrades
Defense Logistics Agency Procurement
Engineering and Technical Services Contracts

Risk Flags

Sole-source award lacks competitive justification.
Cost-plus contract type poses potential for cost overruns.
Absence of defined performance metrics hinders objective evaluation.
Limited transparency into specific product and upgrade details.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $21.1 million to PERATON TECHNOLOGY SERVICES INC.. FY23 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 $21.1 million.

What is the period of performance?

Start: 2022-11-09. End: 2024-10-30.

What is the specific nature of the TMPC products being upgraded, and why are these upgrades necessary?

The provided data does not specify the exact nature of the 'TMPC PRODUCTS' or the detailed reasons for their upgrades. TMPC could potentially stand for Tactical, Mobile, or Training, Command, Control, Communications, Computers, and Intelligence (C4I) systems, or other specialized equipment. Understanding the function and criticality of these products is essential to evaluating the necessity and urgency of the upgrades. Without this context, it's difficult to fully assess the justification for a sole-source award and the potential impact of any delays or cost overruns on operational readiness.

What was the justification for awarding this contract on a sole-source basis instead of through full and open competition?

The data indicates this contract was awarded as 'NOT COMPETED,' implying a sole-source justification was used. Common reasons for sole-source awards include the existence of only one responsible source, urgent and compelling needs that preclude competition, or specific national security requirements. For this contract, the Department of the Navy would have had to document and approve a justification (e.g., a Justification and Approval - J&A) detailing why competition was not feasible or practicable. Without access to this official documentation, the specific rationale remains unknown, making it difficult to independently verify the necessity of bypassing the competitive process.

How does the Cost Plus Fixed Fee (CPFF) contract structure influence cost control and contractor incentives for this project?

A Cost Plus Fixed Fee (CPFF) contract reimburses the contractor for allowable costs incurred, plus a predetermined fixed fee representing profit. While CPFF contracts can be useful for projects with uncertain scopes or high risk where defining a fixed price is difficult, they carry inherent risks. The contractor is incentivized to control costs to protect their fee, but the government bears the risk of cost overruns. Effective management and oversight are critical to ensure the contractor remains efficient and does not inflate costs to increase the total reimbursement. The fixed fee itself should be negotiated based on the complexity and risk of the effort.

What is Peraton Technology Services Inc.'s track record with similar sole-source defense contracts and product upgrade projects?

Assessing Peraton Technology Services Inc.'s track record with similar sole-source defense contracts and product upgrade projects would require a deeper dive into their contract history, past performance evaluations, and any publicly available project outcomes. While Peraton is a known entity in the government contracting space, the specifics of their performance on sole-source, CPFF contracts for product upgrades are not detailed in the provided data. A review of their performance metrics, client feedback, and any documented issues on comparable projects would be necessary to gauge their reliability and efficiency in executing this specific type of work.

Are there any performance metrics or key performance indicators (KPIs) defined in the contract to measure the success of the TMPC product upgrades?

The provided data does not include details on specific performance metrics or Key Performance Indicators (KPIs) for this contract. For a Cost Plus Fixed Fee contract, especially one awarded sole-source, clearly defined performance standards and measurable outcomes are crucial for ensuring the government receives the intended value. Without explicit KPIs related to functionality, reliability, timeliness, or cost efficiency of the upgrades, it is challenging to objectively assess the contractor's performance and the overall success of the project. These metrics should ideally be established during the contract negotiation phase.

How does this $21.1 million contract compare to historical spending on TMPC product upgrades or similar engineering services by the Department of the Navy?

Comparing this $21.1 million contract to historical spending requires access to historical procurement data for TMPC products and similar engineering services by the Department of the Navy. Without that data, it's difficult to determine if this award represents an increase, decrease, or is in line with previous investments. Factors such as inflation, technological advancements, and changes in operational requirements influence spending levels over time. A comparative analysis would involve looking at the number of contracts awarded, their total value, and the scope of work over several fiscal years to identify trends and anomalies.

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: $21,656,140

Exercised Options: $21,261,147

Current Obligation: $21,110,651

Subaward Activity

Number of Subawards: 23

Total Subaward Amount: $5,050,426

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