DoD's $21.5M R&D contract to Peraton Inc. awarded without competition for research services
Contract Overview
Contract Amount: $21,512,362 ($21.5M)
Contractor: Peraton Inc.
Awarding Agency: Department of Defense
Start Date: 2020-08-17
End Date: 2025-08-18
Contract Duration: 1,827 days
Daily Burn Rate: $11.8K/day
Competition Type: NOT COMPETED
Number of Offers Received: 1
Pricing Type: COST PLUS FIXED FEE
Sector: R&D
Official Description: SERVICES IAW ATTACHED SOW
Place of Performance
Location: MCLEAN, FAIRFAX County, VIRGINIA, 22102
State: Virginia Government Spending
Plain-Language Summary
Department of Defense obligated $21.5 million to PERATON INC. for work described as: SERVICES IAW ATTACHED SOW Key points: 1. Contract awarded on a cost-plus-fixed-fee basis, indicating potential for cost overruns. 2. Lack of competition raises concerns about price discovery and potential overpayment. 3. The contract duration of over 5 years suggests a long-term need for these R&D services. 4. Research and Development in Physical, Engineering, and Life Sciences is a critical sector for innovation. 5. The contract's value, while significant, needs benchmarking against similar R&D efforts. 6. Oversight will be crucial to ensure value for money given the sole-source nature.
Value Assessment
Rating: questionable
Benchmarking the value of this $21.5 million contract is challenging due to its sole-source nature and the specific R&D focus. Without competitive bids, it's difficult to assess if the pricing is fair market value. The cost-plus-fixed-fee structure necessitates close monitoring of expenditures to ensure efficiency and prevent cost overruns. Comparing it to similar R&D contracts within the Department of Defense or other agencies would require detailed analysis of the scope of work and deliverables, which are not fully detailed here.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was awarded on a sole-source basis, meaning there was no open competition. This typically occurs when a specific contractor possesses unique capabilities or when urgency dictates a rapid award. The absence of multiple bidders means that the government did not benefit from price negotiation that often arises from a competitive bidding process. This can lead to higher costs for taxpayers.
Taxpayer Impact: The lack of competition means taxpayers may not have received the best possible price for these research and development services. Without competing offers, the government had limited leverage to negotiate down the cost.
Public Impact
The Department of Defense is the primary beneficiary, receiving specialized research and development services. The contract supports advancements in physical, engineering, and life sciences, potentially leading to new technologies or improved defense capabilities. The geographic impact is primarily within Virginia, where the contractor is located, potentially supporting local employment. The contract may indirectly impact the scientific and engineering workforce by funding specialized research roles.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award limits price competition, potentially increasing costs for taxpayers.
- Cost-plus-fixed-fee contract type can incentivize higher spending if not closely monitored.
- Lack of transparency in the justification for sole-source award.
- Long contract duration (over 5 years) increases exposure to potential cost escalations.
- Specific R&D outcomes and their alignment with strategic goals require ongoing assessment.
Positive Signals
- Contract supports critical research and development in physical, engineering, and life sciences.
- Peraton Inc. is a known entity in the defense contracting space.
- The contract has a defined period of performance, allowing for structured project management.
- Fixed fee component provides some cost certainty for the government.
Sector Analysis
This contract falls within the Research and Development sector, specifically focusing on physical, engineering, and life sciences (NAICS 541715). This is a broad category encompassing a wide range of scientific inquiry and technological innovation. The market for R&D services is competitive, with numerous firms offering specialized expertise. However, specific, advanced R&D projects often lead to sole-source awards due to unique capabilities. Federal spending in R&D is substantial, driven by national security, economic competitiveness, and scientific advancement goals.
Small Business Impact
This contract does not appear to have a small business set-aside component, as indicated by 'sb': false. There is also no explicit mention of subcontracting requirements for small businesses. Therefore, the direct impact on the small business ecosystem is likely minimal unless Peraton Inc. voluntarily engages small businesses as subcontractors. The absence of set-asides means opportunities for small businesses to directly compete for this specific contract were not prioritized.
Oversight & Accountability
Oversight for this contract will likely be managed by the Department of the Navy, a component of the Department of Defense. Given the cost-plus-fixed-fee structure and sole-source award, robust oversight is essential. This includes regular reviews of expenditures, performance monitoring against the Statement of Work (SOW), and ensuring compliance with contract terms. Transparency regarding the justification for the sole-source award and the progress of the R&D activities would enhance accountability.
Related Government Programs
- Department of Defense Research and Development Contracts
- Federal Contracts for Scientific Research
- Cost-Plus-Fixed-Fee Contracts
- Sole-Source Defense Contracts
- Research Services for Physical Sciences
- Engineering Research and Development
Risk Flags
- Sole-source award
- Cost-plus-fixed-fee contract type
- Lack of competitive bidding
- Potential for cost overruns
- Uncertainty in R&D outcomes
Tags
research-and-development, department-of-defense, cost-plus-fixed-fee, sole-source, peraton-inc, virginia, physical-sciences, engineering, life-sciences, definitive-contract, navy
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $21.5 million to PERATON INC.. SERVICES IAW ATTACHED SOW
Who is the contractor on this award?
The obligated recipient is PERATON 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 $21.5 million.
What is the period of performance?
Start: 2020-08-17. End: 2025-08-18.
What is Peraton Inc.'s track record with similar sole-source R&D contracts awarded by the DoD?
Assessing Peraton Inc.'s track record with similar sole-source R&D contracts requires a deeper dive into historical contract awards. While Peraton is a significant defense contractor, sole-source awards, especially for R&D, are often granted based on specific, unique capabilities or proprietary knowledge. Without access to detailed contract histories and performance reviews for Peraton on comparable sole-source R&D efforts, it's difficult to definitively assess their past performance in such scenarios. Generally, agencies justify sole-source awards by demonstrating that only one responsible source can provide the required supplies or services. For R&D, this often relates to specialized expertise, existing intellectual property, or critical integration needs with ongoing government programs. A review of past performance evaluations (e.g., CPARS) for Peraton on similar contracts, if publicly available, would provide more insight into their reliability and effectiveness in delivering R&D outcomes under non-competitive conditions.
How does the $21.5 million value compare to other DoD R&D contracts in physical, engineering, and life sciences?
The $21.5 million value of this contract is a significant but not exceptionally large sum within the context of the Department of Defense's overall Research and Development (R&D) budget. The DoD invests billions annually across various scientific and engineering disciplines. Contracts for basic and applied research can range from a few million dollars to hundreds of millions, depending on the scope, duration, and complexity. For instance, major system development or advanced technology integration projects often exceed this amount considerably. However, for a specific R&D project focused on a particular area within physical, engineering, or life sciences, $21.5 million over five years represents a substantial investment. Benchmarking requires comparing it against contracts with similar NAICS codes (541715) and contract types (Cost Plus Fixed Fee) awarded by the DoD or other federal agencies. Without specific comparable contract data, it's challenging to definitively state if this represents high or low value, but it signifies a considerable commitment to the specific research area.
What are the primary risks associated with a sole-source, cost-plus-fixed-fee R&D contract?
The primary risks associated with a sole-source, cost-plus-fixed-fee (CPFF) R&D contract are multifaceted. Firstly, the sole-source nature eliminates competitive pressure, potentially leading to inflated pricing and reduced incentive for the contractor to optimize costs. The government lacks the benefit of comparing multiple proposals to ensure the best value. Secondly, the CPFF structure, while providing flexibility for R&D where costs can be uncertain, carries inherent risks. The government bears the majority of the cost risk, and the contractor is incentivized to incur costs to achieve the fixed fee. This can lead to cost overruns if not rigorously managed. For R&D specifically, the inherent uncertainty in research outcomes adds another layer of risk; deliverables may not be achieved, or the results may not yield the expected technological advancements, despite the expenditure of funds. Effective oversight and clear performance metrics are crucial to mitigate these risks.
What are the potential program effectiveness indicators for this R&D contract?
Potential program effectiveness indicators for this R&D contract would focus on the successful achievement of research objectives and the transition of findings into practical applications or further development. Key indicators could include: 1. **Milestone Achievement:** Timely completion of research phases and deliverables as outlined in the Statement of Work (SOW). 2. **Technical Performance:** Successful demonstration of new concepts, technologies, or methodologies developed through the research. 3. **Innovation Output:** Generation of intellectual property, patents, publications, or prototypes resulting from the research. 4. **Transition Potential:** Evidence of the research findings being adopted by other DoD programs, integrated into systems, or forming the basis for future development contracts. 5. **Cost Efficiency:** While a CPFF contract, demonstrating that costs were managed reasonably relative to the research progress and outcomes achieved. 6. **Alignment with Strategic Goals:** The extent to which the research contributes to the DoD's broader technological and strategic objectives. Regular technical reviews and progress reports would be essential for tracking these indicators.
How has federal spending in NAICS code 541715 (R&D in Physical, Engineering, and Life Sciences) trended over the past five years?
Federal spending in NAICS code 541715, encompassing Research and Development in the Physical, Engineering, and Life Sciences (except Nanotechnology and Biotechnology), has generally shown a consistent upward trend over the past five years, driven by significant investments from agencies like the Department of Defense (DoD), National Institutes of Health (NIH), and National Science Foundation (NSF). The DoD is a major contributor, funding research crucial for national security and technological superiority. While specific figures fluctuate annually based on budget appropriations and strategic priorities, the overall demand for R&D services in these foundational scientific areas remains robust. Factors such as global competition, emerging threats, and advancements in fields like AI, quantum computing, and biotechnology (though nano/biotech are excluded from this specific code) continue to drive sustained federal investment. Analyzing historical spending patterns within this code reveals a commitment to advancing scientific knowledge and developing cutting-edge technologies across various government priorities.
Industry Classification
NAICS: Professional, Scientific, and Technical Services › Scientific Research and Development Services › Research and Development in the Physical, Engineering, and Life Sciences (except Nanotechnology and Biotechnology)
Product/Service Code: RESEARCH AND DEVELOPMENT › DEFENSE (OTHER) R&D
Competition & Pricing
Extent Competed: NOT COMPETED
Solicitation Procedures: ONLY ONE SOURCE
Solicitation ID: N6600120R0020
Offers Received: 1
Pricing Type: COST PLUS FIXED FEE (U)
Evaluated Preference: NONE
Contractor Details
Address: 12975 WORLDGATE DR STE 7322, 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: $31,853,867
Exercised Options: $31,853,867
Current Obligation: $21,512,362
Subaward Activity
Number of Subawards: 23
Total Subaward Amount: $20,701,138
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: NO
Timeline
Start Date: 2020-08-17
Current End Date: 2025-08-18
Potential End Date: 2025-08-18 00:00:00
Last Modified: 2025-04-03
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