DoD's $37.2M Trident Program Support Contract Awarded to Peraton Inc. with No Competition
Contract Overview
Contract Amount: $37,247,185 ($37.2M)
Contractor: Peraton Inc.
Awarding Agency: Department of Defense
Start Date: 2012-10-01
End Date: 2016-03-31
Contract Duration: 1,277 days
Daily Burn Rate: $29.2K/day
Competition Type: NOT COMPETED
Number of Offers Received: 1
Pricing Type: COST PLUS FIXED FEE
Sector: Defense
Official Description: REENTRY SYSTEMS TECHNICAL SUPPORT SERVICES - UK TRIDENT PROGRAM SUPPORT
Place of Performance
Location: HERNDON, FAIRFAX County, VIRGINIA, 20170
State: Virginia Government Spending
Plain-Language Summary
Department of Defense obligated $37.2 million to PERATON INC. for work described as: REENTRY SYSTEMS TECHNICAL SUPPORT SERVICES - UK TRIDENT PROGRAM SUPPORT Key points: 1. Contract awarded on a sole-source basis, raising questions about price discovery and potential for overpayment. 2. Significant duration of over three years suggests a substantial and ongoing need for these specialized services. 3. Engineering services are critical for complex defense programs, indicating a high level of technical expertise required. 4. The absence of competition limits opportunities for other qualified firms and potentially higher value for taxpayer funds. 5. Lack of small business set-aside or subcontracting goals may reduce the participation of smaller enterprises in this contract. 6. Performance context is tied to the UK Trident program, highlighting international defense cooperation and its associated costs.
Value Assessment
Rating: questionable
Without a competitive bidding process, it is difficult to benchmark the value for money on this $37.2 million contract. The cost-plus-fixed-fee structure, while common for complex services, can incentivize cost increases if not rigorously managed. Comparing this to similar sole-source procurements for specialized defense support would be necessary to assess if the pricing is reasonable, but such data is not readily available in this context. The lack of competition inherently limits the government's ability to secure the best possible price.
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. This typically occurs when only one responsible source is available or when a compelling justification for other than full and open competition exists. The lack of multiple bidders means there was no direct price comparison or negotiation against alternatives, potentially leading to a higher cost than if competition had been present. The government relied on Peraton Inc.'s unique capabilities or a specific justification for this procurement method.
Taxpayer Impact: Sole-source awards mean taxpayers do not benefit from the cost savings that typically arise from competitive bidding. This can result in higher overall expenditure for the services rendered.
Public Impact
The primary beneficiaries are the UK Ministry of Defence and potentially the US Department of Defense through allied support. Services delivered include technical support for the Trident nuclear submarine program, a critical component of UK's strategic defense. Geographic impact is primarily within the defense sector, likely involving specialized facilities and personnel in Virginia. Workforce implications include the employment of highly skilled engineers and technical specialists required for advanced defense systems.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award limits price competition and potential value for taxpayer funds.
- Cost-plus-fixed-fee contract type can lead to cost overruns if not closely monitored.
- Lack of transparency in the justification for sole-source award.
- No explicit small business participation noted, potentially excluding smaller firms.
- Long contract duration may indicate a lack of market alternatives or a need for sustained, specialized support.
Positive Signals
- Contract supports a critical international defense program (UK Trident), indicating high-level trust and capability.
- Peraton Inc. likely possesses specialized expertise essential for this unique requirement.
- Definitive contract award suggests a clear scope and commitment from the government.
- Services are essential for national security and allied defense capabilities.
Sector Analysis
This contract falls within the Engineering Services sector, specifically supporting defense applications. The market for specialized defense technical support is often characterized by high barriers to entry due to security clearances, proprietary technology, and deep domain expertise. While specific market size data for Trident program support is not publicly available, the broader defense engineering services market is substantial, with significant government spending allocated annually. This contract represents a niche but critical segment within that larger market.
Small Business Impact
This contract does not appear to have included small business set-aside provisions, nor is there an indication of specific subcontracting goals for small businesses. The nature of specialized defense technical support often requires large, established prime contractors with extensive resources and security clearances. This can limit opportunities for small businesses to participate directly, although they may indirectly benefit if Peraton Inc. utilizes their services as subcontractors, which is not specified here.
Oversight & Accountability
Oversight for this contract would typically fall under the Defense Contract Management Agency (DCMA), which is responsible for ensuring contractor performance and compliance. The cost-plus-fixed-fee structure necessitates rigorous financial oversight to manage costs and prevent overruns. Transparency regarding the sole-source justification and performance metrics would be key accountability measures. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.
Related Government Programs
- Trident II D5 Missile Program
- Submarine Industrial Base
- Defense Logistics Agency Support Services
- Naval Sea Systems Command Contracts
- Foreign Military Sales Support
Risk Flags
- Sole-source award
- Cost-plus-fixed-fee contract type
- Lack of competition
- Sensitive defense program
Tags
defense, department-of-defense, engineering-services, sole-source, definitive-contract, cost-plus-fixed-fee, virginia, peraton-inc, trident-program, international-cooperation, technical-support
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $37.2 million to PERATON INC.. REENTRY SYSTEMS TECHNICAL SUPPORT SERVICES - UK TRIDENT PROGRAM SUPPORT
Who is the contractor on this award?
The obligated recipient is PERATON INC..
Which agency awarded this contract?
Awarding agency: Department of Defense (Defense Contract Management Agency).
What is the total obligated amount?
The obligated amount is $37.2 million.
What is the period of performance?
Start: 2012-10-01. End: 2016-03-31.
What specific technical support services were provided under this contract?
While the contract title is 'REENTRY SYSTEMS TECHNICAL SUPPORT SERVICES - UK TRIDENT PROGRAM SUPPORT,' the specific details of the technical support are not publicly itemized. Generally, such services for a program like Trident would encompass a wide range of engineering disciplines, including systems engineering, software engineering, hardware support, testing, integration, and lifecycle management. This support is crucial for maintaining the operational readiness and effectiveness of the UK's nuclear deterrent, which relies on the Trident II D5 missile system. The services likely involve close collaboration with the UK Ministry of Defence and potentially other contractors involved in the Trident program.
What was the justification for awarding this contract on a sole-source basis?
The justification for a sole-source award typically stems from a determination that only one responsible source is capable of providing the required services, or that there is a compelling urgency that precludes full and open competition. For specialized defense programs like the UK Trident, this often relates to unique technical expertise, proprietary knowledge, existing infrastructure, or established relationships that cannot be replicated by other firms within the required timeframe. Without access to the specific justification document (e.g., a Justification and Approval - J&A), the precise reasons remain undisclosed, but it is presumed that Peraton Inc. possessed unique qualifications or capabilities essential for this critical support.
How does the cost-plus-fixed-fee (CPFF) contract type impact cost control for this service?
The Cost-Plus-Fixed-Fee (CPFF) contract type allows the contractor to recover all allowable costs incurred, plus a predetermined fixed fee representing profit. While the fixed fee provides some incentive for the contractor to control costs (as it doesn't increase with higher costs), it can also lead to cost overruns if the initial cost estimates are inaccurate or if scope creep occurs without adequate adjustments. Effective oversight by the contracting agency is crucial to scrutinize incurred costs, ensure they are reasonable and allocable, and manage the overall project budget. For complex, long-term projects like Trident support, CPFF is often used due to the inherent uncertainties in estimating total costs.
What is the historical spending pattern for similar technical support services for the Trident program?
Detailed historical spending patterns specifically for technical support services for the UK Trident program are not readily available in the public domain due to the sensitive nature of the program and its international cooperation aspects. However, it is understood that maintaining a strategic nuclear deterrent involves significant, long-term investment in technical support, maintenance, and upgrades. Contracts for such services are typically awarded to specialized defense contractors with proven track records. The $37.2 million awarded to Peraton Inc. over approximately 3.5 years represents a substantial but likely consistent level of expenditure for specialized engineering and technical support within this critical defense sector.
What are the potential risks associated with a sole-source award for critical defense services?
The primary risks associated with a sole-source award for critical defense services include a lack of competitive pressure, which can lead to higher prices and reduced innovation. Taxpayers may not receive the best value for their money. There's also a risk of vendor lock-in, where the government becomes overly reliant on a single provider, potentially limiting future flexibility and negotiation power. Furthermore, without the scrutiny of multiple bidders, there's a potential for less rigorous performance standards or less transparency in the procurement process. Ensuring robust oversight and performance management becomes paramount to mitigate these risks.
Industry Classification
NAICS: Professional, Scientific, and Technical Services › Architectural, Engineering, and Related Services › Engineering Services
Product/Service Code: QUALITY CONTROL, TEST, INSPECTION › OTHER QUALITY, TEST, INSPECT SVCS
Competition & Pricing
Extent Competed: NOT COMPETED
Solicitation Procedures: ONLY ONE SOURCE
Solicitation ID: N0003013Q0016
Offers Received: 1
Pricing Type: COST PLUS FIXED FEE (U)
Evaluated Preference: NONE
Contractor Details
Parent Company: Veritas Capital Fund Management, L.L.C.
Address: 12975 WORLDGATE DR STE 7117, 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: $48,126,052
Exercised Options: $37,278,042
Current Obligation: $37,247,185
Contract Characteristics
Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED
Cost or Pricing Data: YES
Timeline
Start Date: 2012-10-01
Current End Date: 2016-03-31
Potential End Date: 2016-03-31 00:00:00
Last Modified: 2022-04-02
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