DoD's $120.7M contract for electronics R&D awarded to ITT Industries shows mixed value and competition
Contract Overview
Contract Amount: $23,102,694 ($23.1M)
Contractor: Peraton Inc.
Awarding Agency: Department of Defense
Start Date: 2002-09-30
End Date: 2008-09-29
Contract Duration: 2,191 days
Daily Burn Rate: $10.5K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 1
Pricing Type: COST PLUS FIXED FEE
Sector: Defense
Official Description: 200212!001113!1700!E3220 !NAVAL RESEARCH LABORATORY !N0017302C2056 !A!N! !N! !20020930!20030929!120731484!120731484!001216845!N!ITT INDUSTRIES, INC !2560 HUNTINGTON AVENUE !ALEXANDRIA !VA!22303!50000!001!11!WASHINGTON !DISTRICT OF COLUMBIA !D.C. !+000000117315!N!N!000000000000!AC62!RDTE/ELECTRONICS & COMMUNICATION EQ-APPLIED RESEA !A7 !ELECTRONICS AND COMMUNICATION !2000!NOT DISCERNABLE OR CLASSIFIED !541710!E! !3! ! ! ! ! !99990909!B!D!N!A! !A!N!U!2!001!B! !Z!N!Z! ! !N!C!N! ! ! !A!A!A!A!000!A!B!N! ! ! ! ! ! !0001!
Place of Performance
Location: HERNDON, FAIRFAX County, VIRGINIA, 20170
State: Virginia Government Spending
Plain-Language Summary
Department of Defense obligated $23.1 million to PERATON INC. for work described as: 200212!001113!1700!E3220 !NAVAL RESEARCH LABORATORY !N0017302C2056 !A!N! !N! !20020930!20030929!120731484!120731484!001216845!N!ITT INDUSTRIES, INC !2560 HUNTINGTON AVENUE !ALEXANDRIA !VA!22303!50000!001!11!WASHINGTON !DISTR… Key points: 1. The contract's value proposition is unclear due to a lack of detailed performance metrics and benchmarking. 2. Competition was full and open, suggesting a potentially competitive pricing environment, but the number of bidders is not specified. 3. Risk indicators are moderate, with a long duration and cost-plus contract type potentially leading to cost overruns. 4. Performance context is limited, with no specific deliverables or outcomes detailed in the provided data. 5. The contract falls within the Defense sector, specifically focusing on applied research in electronics and communication. 6. Small business participation is not indicated, suggesting potential missed opportunities for smaller firms. 7. Oversight mechanisms are not detailed, but the contract falls under the Defense Contract Management Agency. 8. The contract's duration of nearly 6 years warrants scrutiny for continued relevance and efficiency.
Value Assessment
Rating: fair
The total award amount of $120.7 million over approximately six years for applied research in electronics and communication equipment is substantial. However, without specific performance metrics, deliverables, or comparison to similar research contracts, assessing the value for money is challenging. The 'Cost Plus Fixed Fee' (CPFF) contract type can sometimes lead to less price sensitivity for the contractor compared to fixed-price contracts. Benchmarking this against other R&D contracts in the electronics sector would be necessary for a more definitive value assessment.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
The contract was awarded under 'Full and Open Competition,' which is generally a positive sign for market-driven pricing. However, the data does not specify the number of bids received. A high number of bidders typically indicates robust competition, which can drive down prices and encourage innovation. Conversely, if only a few bids were submitted, the 'full and open' nature might not have translated into significant price advantages for the government.
Taxpayer Impact: A full and open competition suggests that taxpayers benefit from a potentially wider pool of qualified contractors vying for the work, which can lead to more competitive pricing and better resource allocation.
Public Impact
The primary beneficiaries are likely the Department of Defense and its various branches requiring advanced electronics and communication capabilities. The contract supports research and development in electronics and communication equipment, potentially leading to technological advancements. The geographic impact is centered around the Naval Research Laboratory and the contractor's location in Alexandria, Virginia. Workforce implications include employment for scientists, engineers, and support staff involved in R&D activities.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Cost-plus contract type can incentivize higher spending without strict cost controls.
- Long contract duration (nearly 6 years) increases the risk of scope creep and technological obsolescence.
- Lack of specific performance metrics makes it difficult to gauge the effectiveness and efficiency of the R&D efforts.
- Limited information on competition level (number of bidders) hinders a full assessment of price discovery.
- No indication of small business subcontracting could mean missed opportunities for smaller, innovative firms.
Positive Signals
- Awarded through full and open competition, suggesting a broad search for qualified contractors.
- Focus on applied research in a critical defense technology area (electronics and communication).
- Contract awarded to a known entity (ITT Industries), potentially indicating a level of established capability.
- Contract managed by the Defense Contract Management Agency, implying a degree of established oversight.
Sector Analysis
This contract falls within the Research and Development sector, specifically focusing on 'Electronics and Communication' equipment. The North American Industry Classification System (NAICS) code 541710, 'Research and Development in the Physical, Engineering, and Life Sciences,' encompasses a broad range of scientific and technical services. Spending in this area is crucial for maintaining technological superiority, particularly within the defense industry. Comparable spending benchmarks would involve analyzing other R&D contracts awarded by the Department of Defense or other federal agencies for similar technological advancements.
Small Business Impact
The provided data indicates that this contract was not set aside for small businesses (ss: false, sb: false). This suggests that the primary competition was likely among larger, established firms. There is no explicit information regarding subcontracting plans or actual performance related to small businesses. Consequently, the impact on the small business ecosystem is likely minimal unless the prime contractor voluntarily engages small businesses for specific components or services not detailed in this record.
Oversight & Accountability
Oversight for this contract would typically fall under the purview of the Department of Defense, likely managed by the Defense Contract Management Agency (DCMA) given the nature of the award. Accountability measures would be tied to the terms of the Cost Plus Fixed Fee (CPFF) contract, focusing on the contractor's adherence to the scope of work and the fixed fee. Transparency is limited by the available data; while the award itself is public, detailed reporting on project milestones, expenditures, and outcomes is not provided here. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.
Related Government Programs
- Defense Research and Development
- Electronics and Communication Systems
- Naval Technology Research
- Applied Scientific Research Contracts
- Department of Defense Procurement
Risk Flags
- Long contract duration
- Cost-plus contract type
- Lack of specific performance metrics
- Unspecified number of bidders
Tags
defense, department-of-defense, naval-research-laboratory, itt-industries, electronics-and-communication, applied-research, cost-plus-fixed-fee, full-and-open-competition, virginia, rdte, naics-541710, definitive-contract
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $23.1 million to PERATON INC.. 200212!001113!1700!E3220 !NAVAL RESEARCH LABORATORY !N0017302C2056 !A!N! !N! !20020930!20030929!120731484!120731484!001216845!N!ITT INDUSTRIES, INC !2560 HUNTINGTON AVENUE !ALEXANDRIA !VA!22303!50000!001!11!WASHINGTON !DISTRICT OF COLUMBIA !D.C. !+000000117315!N!N!000000000000!AC62!RDTE/ELECTRONICS & COMMUNICATION EQ-APPLIED RESEA !A7 !ELECTRONICS AND COMMUNICATION !2000!NOT DISCERNABLE OR CLASSIFIED !541710!E! !3! ! ! ! ! !99990909!B
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 $23.1 million.
What is the period of performance?
Start: 2002-09-30. End: 2008-09-29.
What was the specific scope of work for this R&D contract, and what were the key deliverables expected by the Naval Research Laboratory?
The provided data indicates the contract's purpose was 'RDTE/ELECTRONICS & COMMUNICATION EQ-APPLIED RESEA' under NAICS code 541710. However, the specific scope of work and key deliverables are not detailed in this record. Typically, applied research contracts aim to solve practical problems or develop specific technologies. For this contract, it likely involved research into advanced electronics and communication systems relevant to naval operations. Without further documentation, such as the Statement of Work (SOW) or contract modifications, the precise objectives and expected outcomes remain unspecified. This lack of detail makes it difficult to assess the contract's alignment with strategic goals or its potential impact.
How many bids were received for this 'Full and Open Competition' contract, and how does this compare to industry benchmarks for similar R&D procurements?
The contract was awarded under 'Full and Open Competition,' which theoretically allows all responsible sources to submit bids. However, the provided data does not specify the number of bids received. This information is crucial for understanding the true level of competition. If only a few bids were submitted, the government may not have achieved the full benefits of open competition, such as optimal pricing and a wide range of innovative solutions. Benchmarking against similar R&D contracts in the defense sector would reveal whether the number of bidders was typical or unusually low. A low number of bidders could indicate market concentration, high barriers to entry, or insufficient outreach by the procuring agency.
What is the historical spending pattern for ITT Industries (or its successors) with the Department of Defense in the electronics R&D sector?
Analyzing the historical spending patterns of ITT Industries (and its subsequent entities, as corporate structures evolve) with the Department of Defense in electronics R&D is essential for assessing contractor performance and reliability. While this specific contract award data is available, a comprehensive review would require accessing historical contract databases to identify the volume, value, and types of R&D contracts ITT has held previously. This analysis could reveal trends in contract awards, performance ratings, and potential areas of expertise or concern. Understanding this history helps in evaluating whether ITT has a consistent track record of successful project completion, adherence to budget, and delivery of innovative solutions in this specialized field.
Given the 'Cost Plus Fixed Fee' (CPFF) contract type and the nearly six-year duration, what are the primary risks associated with cost overruns and project delays?
The 'Cost Plus Fixed Fee' (CPFF) contract type, combined with a long duration of nearly six years, presents inherent risks for cost overruns and project delays. In a CPFF structure, the contractor is reimbursed for all allowable costs plus a predetermined fixed fee representing profit. This can reduce the contractor's incentive to control costs rigorously, as the fee remains constant regardless of actual expenses. The extended timeline increases the likelihood of unforeseen challenges, scope creep, or changes in technological requirements, which can lead to cost increases. Effective oversight, stringent change control processes, and regular performance reviews are critical to mitigate these risks and ensure the project stays within budget and meets its objectives.
How does the $120.7 million total award value compare to other applied research contracts in electronics and communication awarded by the DoD around the same period (2002-2008)?
Comparing the $120.7 million total award value to other applied research contracts in electronics and communication awarded by the DoD around the 2002-2008 period is crucial for contextualizing its significance. Without access to a comprehensive database of similar contracts, a precise benchmark is difficult to establish. However, R&D contracts, especially in advanced technological fields like defense electronics, can vary widely in value based on the complexity, duration, and scope of the research. A contract of this magnitude suggests a significant undertaking, potentially involving substantial technological development or a broad research program. Further analysis would involve identifying comparable contracts by NAICS code, agency, and award period to determine if this value falls within the typical range or represents an outlier.
Industry Classification
NAICS: Professional, Scientific, and Technical Services › Scientific Research and Development Services › Research and Development in the Physical, Engineering, and Life Sciences
Product/Service Code: RESEARCH AND DEVELOPMENT › C – National Defense R&D Services
Competition & Pricing
Extent Competed: FULL AND OPEN COMPETITION
Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE
Offers Received: 1
Pricing Type: COST PLUS FIXED FEE (U)
Evaluated Preference: NONE
Contractor Details
Parent Company: Veritas Capital Fund Management, L.L.C. (UEI: 078628925)
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
Contract Characteristics
Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED
Cost or Pricing Data: NO
Timeline
Start Date: 2002-09-30
Current End Date: 2008-09-29
Potential End Date: 2008-09-29 00:00:00
Last Modified: 2017-12-14
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