DoD's $9.25M Cyber Security Contract Awarded to Peraton Technology Services Inc. with No Competition

Contract Overview

Contract Amount: $9,250,414 ($9.3M)

Contractor: Peraton Technology Services Inc.

Awarding Agency: Department of Defense

Start Date: 2024-10-22

End Date: 2026-11-07

Contract Duration: 746 days

Daily Burn Rate: $12.4K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: IT

Official Description: CYBER SECURITY AND SYSTEMS ENGINEERING

Place of Performance

Location: CHANTILLY, FAIRFAX County, VIRGINIA, 20151

State: Virginia Government Spending

Plain-Language Summary

Department of Defense obligated $9.3 million to PERATON TECHNOLOGY SERVICES INC. for work described as: CYBER SECURITY AND SYSTEMS ENGINEERING Key points: 1. Contract awarded on a sole-source basis, raising questions about potential price overruns and limited market engagement. 2. The 'Not Competed' designation suggests a lack of competitive pressure, potentially impacting overall value for money. 3. Performance period extends over two years, indicating a significant commitment to the chosen contractor. 4. The contract type (Cost Plus Fixed Fee) can incentivize cost escalation if not closely monitored. 5. Focus on cyber security and systems engineering aligns with critical national defense needs. 6. The award to a single vendor warrants scrutiny regarding the justification for foregoing a competitive process.

Value Assessment

Rating: questionable

Benchmarking the value of this $9.25 million contract is challenging without a competitive process. The Cost Plus Fixed Fee (CPFF) contract type, while offering flexibility, can lead to higher costs if the contractor's expenses are not rigorously managed and justified. Without comparison to other bids or market rates for similar cyber security and systems engineering services, it's difficult to ascertain if the pricing represents fair market value. The absence of competition means there's no direct benchmark to assess cost-effectiveness.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning it was not competed. The Department of the Navy did not solicit offers from multiple vendors. This approach is typically used when only one vendor possesses the necessary capabilities, or in urgent situations. The lack of competition limits price discovery and may prevent the government from obtaining the most advantageous pricing.

Taxpayer Impact: Taxpayers may be paying a premium due to the absence of competitive bidding. Without multiple offers, there is less assurance that the price reflects the best possible value achievable in a competitive market.

Public Impact

The primary beneficiaries are the Department of Defense and the Department of the Navy, receiving critical cyber security and systems engineering support. Services delivered are essential for maintaining the security and operational integrity of naval systems. The geographic impact is likely concentrated within the operational areas and facilities managed by the Department of the Navy. Workforce implications may include the utilization of specialized cyber security and engineering personnel, potentially both within the contractor's organization and government oversight roles.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competitive pressure, potentially leading to higher costs.
Cost Plus Fixed Fee contract type requires diligent oversight to prevent cost overruns.
Lack of transparency in the justification for sole-sourcing.
Potential for contractor to leverage unique position for future sole-source opportunities.

Positive Signals

Addresses critical cyber security needs for national defense.
Contract duration provides stability for essential services.
Peraton Technology Services Inc. is an established government contractor.

Sector Analysis

The cyber security and systems engineering sector is a rapidly growing and critical area within the broader defense industry. Spending in this sector is driven by increasing global cyber threats and the need to protect sensitive government and military networks. This contract fits within the defense IT and professional services segments, where specialized expertise is highly valued. Comparable spending benchmarks are difficult to establish precisely due to the unique nature of defense cyber requirements and the sole-source award.

Small Business Impact

This contract does not appear to involve a small business set-aside, as indicated by the 'ss' and 'sb' fields being false. The prime contractor, Peraton Technology Services Inc., is a large business. There is no explicit information provided regarding subcontracting plans for small businesses. The absence of a set-aside or clear subcontracting goals may limit opportunities for small businesses to participate in this significant defense contract.

Oversight & Accountability

Oversight for this contract will likely be managed by the Department of the Navy's contracting and program management offices. Accountability measures would typically involve performance reviews, milestone tracking, and financial audits, especially given the CPFF structure. Transparency regarding the justification for the sole-source award and the contractor's performance metrics would be key to assessing accountability. Inspector General jurisdiction would apply if any fraud, waste, or abuse is suspected.

Related Government Programs

Department of Defense Cyber Security Initiatives
Naval Information Warfare Systems Command Contracts
Systems Engineering Support Services
IT Services for National Security

Risk Flags

Sole-source award lacks competitive justification.
Cost Plus Fixed Fee contract type requires vigilant cost control.
Potential for vendor lock-in due to sole-source nature.
Limited transparency on specific performance metrics.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $9.3 million to PERATON TECHNOLOGY SERVICES INC.. CYBER SECURITY AND SYSTEMS ENGINEERING

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 $9.3 million.

What is the period of performance?

Start: 2024-10-22. End: 2026-11-07.

What is the specific justification provided by the Department of the Navy for awarding this contract on a sole-source basis?

The provided data indicates the contract was 'NOT COMPETED' and awarded as a 'sole-source' action. Typically, agencies justify sole-source awards under specific circumstances outlined in the Federal Acquisition Regulation (FAR), such as when only one responsible source is available or when there is a compelling urgency. Without the specific justification document (e.g., a Justification and Approval for Other Than Full and Open Competition - J&A), it is impossible to detail the exact reasons. However, common justifications include unique technical capabilities, proprietary data, or critical national security needs that cannot be met by other vendors within the required timeframe. The absence of competition means taxpayers do not benefit from the price discovery that occurs in a competitive bidding process.

How does the Cost Plus Fixed Fee (CPFF) contract type compare to other contract types in terms of risk and potential cost for the government in cyber security services?

Cost Plus Fixed Fee (CPFF) contracts are designed to share risk between the government and the contractor. The government agrees to pay the contractor's actual costs plus a fixed fee, which represents the contractor's profit. This type of contract is often used when the scope of work is not precisely defined or when there is uncertainty about the costs involved, such as in research and development or complex system engineering projects. For the government, the risk lies in potential cost overruns if the contractor's actual costs exceed initial estimates, as the fixed fee remains constant. However, the fixed fee provides the contractor with an incentive to control costs, as any savings below the estimated cost do not reduce their profit. Compared to Firm-Fixed-Price (FFP) contracts, CPFF offers more flexibility but less cost certainty. Compared to Cost-Plus-Incentive-Fee (CPIF) contracts, the profit is fixed rather than variable based on performance targets, potentially offering less incentive for exceptional performance.

What is Peraton Technology Services Inc.'s track record with the Department of Defense, particularly in cyber security and systems engineering contracts?

Peraton Technology Services Inc. is a significant government contractor with a substantial history of serving the Department of Defense (DoD) and other federal agencies. While specific details of their past performance on cyber security and systems engineering contracts are not provided in the summary data, Peraton has been involved in various large-scale IT, intelligence, and defense-related programs. Their portfolio often includes complex mission-critical services. A deeper dive into contract databases like SAM.gov or FPDS would reveal specific contract awards, performance ratings, and any past issues or commendations related to their work for the DoD. Their continued awards suggest a generally satisfactory performance history, but a comprehensive review would be needed to assess their specific expertise and reliability in cyber security and systems engineering.

What are the potential implications of a two-year performance period for cyber security systems?

A two-year performance period for cyber security and systems engineering indicates a substantial and ongoing need for these services. For the government, it provides continuity and stability in maintaining critical cyber defenses and system integrity over a defined period. This duration allows the contractor to become deeply familiar with the systems and threats, potentially leading to more effective security measures. However, it also means that for two years, the government is reliant on a single vendor, especially in a sole-source context. This extended commitment necessitates robust oversight to ensure performance remains high and that the contractor is adapting to evolving cyber threats. It also means that if the contractor's performance degrades or if new, more innovative solutions emerge, the government may be locked into the current contract until its expiration, potentially missing out on better alternatives.

How does the 'Virginia' (VA) state designation impact the contract's execution and oversight?

The designation 'VA' for Virginia likely indicates the state where the contractor's facility performing the work is located, or where the contract is administered. Virginia has a significant concentration of federal agencies and defense contractors, particularly in the Washington D.C. metropolitan area. This location often means that the contract is subject to oversight from agencies headquartered in the region and may involve personnel security clearances and access to sensitive government facilities within the state. Proximity can sometimes facilitate communication and oversight between the government and the contractor. However, it does not inherently change the fundamental terms of the contract or the federal acquisition regulations governing it. The primary impact is logistical and administrative, potentially influencing site visits, reporting structures, and the availability of government personnel for oversight.

Industry Classification

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

Product/Service Code: IT AND TELECOM - INFORMATION TECHNOLOGY AND TELECOMMUNICATIONS › IT AND TELECOM - APLLICATIONS

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: $14,702,535

Exercised Options: $14,425,441

Current Obligation: $9,250,414

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