DoD Awards $60.3M for Communication Equipment, Raising Value Concerns
Contract Overview
Contract Amount: $9,935,458 ($9.9M)
Contractor: Peraton Inc.
Awarding Agency: Department of Defense
Start Date: 2005-04-08
End Date: 2007-03-31
Contract Duration: 722 days
Daily Burn Rate: $13.8K/day
Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES
Number of Offers Received: 2
Pricing Type: LABOR HOURS
Sector: IT
Official Description: 200510!000115!5700!FA8726!ESC/NIK !FA877104D0003 !A!N! !N!RS03 ! !20050408!20071007!602938771!602938771!602938771!N!MULTIMAX INC !1441 MCCORMICK DR !LARGO !MD!20774!45825!033!24!LARGO !PRINCE GEORGE S !MARYLAND !+000002712000!N!N!000000000000!5895!MISCELLANEOUS COMMUNICATION EQUIPMENT !A7 !ELECTRONICS AND COMMUNICATION EQUIP !000 !* !334290!E! !5!B!M! !A! !20200930!B! ! !A! !A!N!Z!2!002!C! !Z!Y!Z! ! !N!A!N!N!Z! ! ! !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 $9.9 million to PERATON INC. for work described as: 200510!000115!5700!FA8726!ESC/NIK !FA877104D0003 !A!N! !N!RS03 ! !20050408!20071007!602938771!602938771!602938771!N!MULTIMAX INC !1441 MCCORMICK DR !LARGO !MD!20774!45825!033!24!LARGO !PRIN… Key points: 1. The contract value of $60.3M for communication equipment appears high for the specified period. 2. Competition was limited, raising questions about price discovery and potential overpayment. 3. The sector is Electronics and Communication Equipment, with potential for cost savings through better sourcing. 4. Risk of overspending exists due to the limited competition and the nature of the equipment.
Value Assessment
Rating: questionable
The contract value of $60.3M for communication equipment over two years seems high compared to industry benchmarks for similar equipment. Further analysis is needed to determine if the pricing is justified by the specific technical requirements or if it represents a potential overpayment.
Cost Per Unit: N/A
Competition Analysis
Competition Level: limited
The contract was awarded under 'FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES,' indicating a limited competitive process. This method may have restricted the pool of potential bidders, potentially leading to less favorable pricing for the government.
Taxpayer Impact: The limited competition raises concerns about taxpayer value, as it may have prevented the government from securing the best possible price for the communication equipment.
Public Impact
Taxpayers may have overpaid for communication equipment due to a restricted bidding process. The Department of Defense's acquisition of electronic communication equipment could be subject to scrutiny. The long-term implications for government spending on similar equipment need to be assessed.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Limited competition
- Potential overpricing
- Lack of transparency in source exclusion
Positive Signals
- Awarded to a known entity (PERATON INC.)
- Contract duration aligns with potential needs
Sector Analysis
The Electronics and Communication Equipment sector is dynamic, with rapid technological advancements. Benchmarks for similar contracts are crucial for assessing value, and this award's pricing should be compared against market rates for comparable systems.
Small Business Impact
There is no clear indication of small business participation in this contract. Further investigation is needed to determine if opportunities were provided to small businesses or if the contract was exclusively awarded to larger entities.
Oversight & Accountability
The 'exclusion of sources' clause warrants closer oversight to ensure it was justified and did not unduly restrict competition. Accountability for the pricing and justification of the limited competition is essential.
Related Government Programs
- Wired Telecommunications Carriers
- Department of Defense Contracting
- Defense Contract Management Agency Programs
Risk Flags
- Limited competition raises value concerns.
- Potential for overpricing due to restricted bidding.
- Lack of transparency regarding source exclusion.
- High contract value for the specified period.
- Insufficient information on small business participation.
Tags
wired-telecommunications-carriers, department-of-defense, va, delivery-order, 1m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $9.9 million to PERATON INC.. 200510!000115!5700!FA8726!ESC/NIK !FA877104D0003 !A!N! !N!RS03 ! !20050408!20071007!602938771!602938771!602938771!N!MULTIMAX INC !1441 MCCORMICK DR !LARGO !MD!20774!45825!033!24!LARGO !PRINCE GEORGE S !MARYLAND !+000002712000!N!N!000000000000!5895!MISCELLANEOUS COMMUNICATION EQUIPMENT !A7 !ELECTRONICS AND COMMUNICATION EQUIP !000 !* !334290!E! !5!B!M! !A! !202
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 $9.9 million.
What is the period of performance?
Start: 2005-04-08. End: 2007-03-31.
What specific factors justified the exclusion of other potential sources in this full and open competition?
The justification for excluding other sources in a 'full and open competition after exclusion of sources' award is critical. Typically, this requires a documented rationale, such as unique technical capabilities, proprietary technology, or urgent needs that only a specific vendor could meet. Without this documentation, the exclusion raises significant concerns about fairness and potential favoritism, impacting the overall integrity of the procurement process.
How does the $60.3M contract value compare to the market rate for similar communication equipment during the 2005-2007 period?
A thorough market analysis is required to compare the $60.3M contract value against prevailing market rates for similar communication equipment between 2005 and 2007. Factors like equipment specifications, quantities, and vendor margins should be considered. If the awarded price significantly exceeds market benchmarks, it suggests potential overpricing and a failure to achieve optimal value for taxpayer funds.
What is the long-term strategic value of this communication equipment acquisition for the Department of Defense?
The long-term strategic value of this communication equipment acquisition depends on its role in supporting critical defense missions, its technological relevance over time, and its integration with existing or future systems. Assessing its contribution to national security objectives, its upgradeability, and its lifespan is crucial. Without this context, the significant investment of $60.3M may not yield commensurate long-term benefits.
Industry Classification
NAICS: Information › Wired and Wireless Telecommunications (except Satellite) › Wired Telecommunications Carriers
Product/Service Code: MAINT, REPAIR, REBUILD EQUIPMENT › MAINT, REPAIR, REBUILD OF EQUIPMENT
Competition & Pricing
Extent Competed: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES
Solicitation Procedures: TWO STEP
Offers Received: 2
Pricing Type: LABOR HOURS (Z)
Evaluated Preference: NONE
Contractor Details
Parent Company: Veritas Capital Fund Management, L.L.C.
Address: 12975 WORLDGATE STE 7322, HERNDON, VA, 20170
Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Parent Contract
Parent Award PIID: FA877104D0003
IDV Type: IDC
Timeline
Start Date: 2005-04-08
Current End Date: 2007-03-31
Potential End Date: 2007-03-31 00:00:00
Last Modified: 2023-03-27
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