DoD's $12.6M IT services contract for financial and accounting support awarded to Electronic Data Systems Corp

Contract Overview

Contract Amount: $12,602,288 ($12.6M)

Contractor: Peraton Enterprise Solutions LLC

Awarding Agency: Department of Defense

Start Date: 2006-04-01

End Date: 2007-09-30

Contract Duration: 547 days

Daily Burn Rate: $23.0K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: TIME AND MATERIALS

Sector: IT

Official Description: 200611!600090!9700!HQ0425!DEF FIN & ACTG SVC, INDIANAPOLIS!MDA22002A0002 !A!N! !N!0038 ! !20060401!20070331!077817617!077817617!046667523!N!ELECTRONIC DATA SYSTEMS CORPOR!13600 EDS DR !HERNDON !VA!20171!55925!033!12!PENSACOLA !ESCAMBIA !FLORIDA !+000006953731!N!N!000000000000!D302!ADP SYSTEMS DEVELOPMENT SERVICES !S1 !SERVICES !000 !NOT DISCERNABLE !541511!E! !7! ! ! ! ! !99990909!C!E!Y!A! !A!N!Y!2!002! ! !Z!N!Z! ! !N!C!N! ! ! !C!C!A!A!000!A!B!N! ! ! ! ! ! !0001! !

Place of Performance

Location: PENSACOLA, ESCAMBIA County, FLORIDA, 32509

State: Florida Government Spending

Plain-Language Summary

Department of Defense obligated $12.6 million to PERATON ENTERPRISE SOLUTIONS LLC for work described as: 200611!600090!9700!HQ0425!DEF FIN & ACTG SVC, INDIANAPOLIS!MDA22002A0002 !A!N! !N!0038 ! !20060401!20070331!077817617!077817617!046667523!N!ELECTRONIC DATA SYSTEMS CORPOR!13600 EDS DR !HERNDON !VA!20171!55925!033!12!PENSACOLA !ESCA… Key points: 1. Contract awarded for IT services supporting financial and accounting functions, indicating a need for robust back-office systems. 2. The contract was awarded using full and open competition, suggesting a competitive bidding process. 3. The contract duration of 547 days (approx. 1.5 years) suggests a need for ongoing, but not necessarily long-term, support. 4. The primary service category is ADP Systems Development Services, highlighting a focus on software and system enhancements. 5. The contract was a delivery order under a larger contract, implying a modular approach to service acquisition. 6. The awardee, Electronic Data Systems Corp., has a significant presence in government contracting, suggesting established capabilities.

Value Assessment

Rating: fair

The total award amount of $12.6 million for approximately 1.5 years of service appears to be within a reasonable range for IT support services of this nature. However, without specific details on the scope of work, deliverables, and the exact number of personnel or hours, a precise value-for-money assessment is challenging. Benchmarking against similar IT development and support contracts for defense agencies would provide a clearer picture of whether this represents a competitive price point.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, indicating that all responsible sources were permitted to submit bids. This typically fosters a competitive environment, which can lead to better pricing and service quality. The fact that it was a delivery order suggests it was part of a larger indefinite-delivery/indefinite-quantity (IDIQ) contract or a similar vehicle that allowed for multiple task orders to be issued.

Taxpayer Impact: Full and open competition generally benefits taxpayers by driving down costs through market forces and encouraging a wider pool of contractors to offer their best value proposals.

Public Impact

The Department of Defense benefits from enhanced financial and accounting systems, crucial for operational efficiency and accountability. Services delivered include ADP systems development, likely involving custom software development, integration, and maintenance. The geographic impact is primarily within the United States, supporting federal financial operations. Workforce implications include the potential for IT professionals and developers to be engaged in critical defense infrastructure projects.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns if the scope of 'ADP Systems Development Services' is not tightly managed.
Risk of vendor lock-in if the developed systems are highly proprietary and difficult to transition.
Dependence on a single contractor (EDS) for critical financial system development could pose continuity risks.

Positive Signals

Awarded through full and open competition, suggesting a competitive pricing environment.
The contract is for IT services, aligning with modernization efforts in federal agencies.
The contractor, Electronic Data Systems Corp., has a history of performing large government contracts.

Sector Analysis

This contract falls within the Information Technology sector, specifically focusing on custom computer programming services (NAICS code 541511). The market for IT services supporting government functions is substantial, with agencies continually seeking to modernize their financial, accounting, and operational systems. This contract represents a portion of the broader spending on defense IT infrastructure, which is a significant segment of the federal IT market. Comparable spending benchmarks would involve analyzing other contracts for similar ADP systems development and financial system support within the Department of Defense and other federal agencies.

Small Business Impact

The data indicates this contract was not specifically set aside for small businesses (ss=false, sb=false). As a large contract awarded to Electronic Data Systems Corp., it is unlikely that small businesses would be directly involved as the prime contractor. However, there may be subcontracting opportunities for small businesses if EDS chooses to engage them for specialized services, though this is not explicitly detailed in the provided data.

Oversight & Accountability

Oversight for this contract would typically fall under the purview of the Department of Defense's contracting and financial management offices, specifically the Defense Finance and Accounting Service (DFAS). Accountability measures would be defined in the contract's terms and conditions, including performance standards, reporting requirements, and payment schedules. Transparency is generally facilitated through contract databases like FPDS-NG, where award details are recorded. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse related to the contract.

Related Government Programs

Defense Finance and Accounting Service (DFAS) Operations
Department of Defense IT Modernization Programs
Federal Financial Management Systems
Custom Computer Programming Services Contracts
Indefinite Delivery/Indefinite Quantity (IDIQ) Vehicles

Risk Flags

Potential for cost overruns due to Time and Materials contract type.
Scope creep risk in ADP systems development projects.
Dependence on contractor for critical financial system development.
Data integrity and accuracy concerns if not properly managed.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $12.6 million to PERATON ENTERPRISE SOLUTIONS LLC. 200611!600090!9700!HQ0425!DEF FIN & ACTG SVC, INDIANAPOLIS!MDA22002A0002 !A!N! !N!0038 ! !20060401!20070331!077817617!077817617!046667523!N!ELECTRONIC DATA SYSTEMS CORPOR!13600 EDS DR !HERNDON !VA!20171!55925!033!12!PENSACOLA !ESCAMBIA !FLORIDA !+000006953731!N!N!000000000000!D302!ADP SYSTEMS DEVELOPMENT SERVICES !S1 !SERVICES !000 !NOT DISCERNABLE !541511!E! !7! ! ! ! ! !999

Who is the contractor on this award?

The obligated recipient is PERATON ENTERPRISE SOLUTIONS LLC.

Which agency awarded this contract?

Awarding agency: Department of Defense (Defense Finance and Accounting Service).

What is the total obligated amount?

The obligated amount is $12.6 million.

What is the period of performance?

Start: 2006-04-01. End: 2007-09-30.

What specific financial and accounting functions does this ADP systems development contract support?

The provided data indicates the contract is for 'DEF FIN & ACTG SVC, INDIANAPOLIS' and falls under 'ADP SYSTEMS DEVELOPMENT SERVICES'. This suggests the contract supports the development, enhancement, or maintenance of automated data processing systems used for the financial and accounting operations of the Department of Defense, likely managed or coordinated through the Indianapolis office of DFAS. Specific functions could include payroll, accounting, budgeting, financial reporting, audit support, or other critical financial management processes. The exact scope would be detailed in the contract's Statement of Work (SOW), which is not provided here but would outline the precise systems and functionalities being addressed.

How does the $12.6 million award compare to other IT development contracts for similar defense financial systems?

Benchmarking the $12.6 million award requires comparing it against contracts with similar scope, duration, and complexity within the defense sector. Contracts for developing or modernizing financial systems can vary widely in cost depending on factors like the size of the agency, the legacy systems being replaced, the level of customization required, and the specific technologies employed. A contract of this value over approximately 1.5 years suggests a significant project, potentially involving custom software development or major system integration. Without access to detailed contract line item numbers (CLINs) and the specific deliverables, a precise comparison is difficult. However, it is within the expected range for substantial IT development efforts within a large federal agency like the DoD.

What is the track record of Electronic Data Systems Corp. (EDS) in performing similar government IT contracts?

Electronic Data Systems Corporation (EDS), prior to its acquisition by Hewlett Packard and subsequent spin-offs, had a long and extensive history of performing large-scale IT contracts for the U.S. government, including significant work for the Department of Defense. They were known for managing complex IT infrastructure, developing custom software solutions, and providing a wide range of IT services. Their track record included numerous large, multi-year contracts for various federal agencies. While specific performance metrics for this particular contract are not detailed here, EDS's general history suggests they possessed the capability and experience to handle substantial government IT projects like the one described.

What are the potential risks associated with relying on 'Time and Materials' contract type for ADP systems development?

The contract was awarded as 'TIME AND MATERIALS' (PT: TIME AND MATERIALS). This contract type can present risks for the government, primarily related to cost control. Unlike fixed-price contracts, T&M contracts pay the contractor for the actual labor hours and materials used, plus a fixed fee or percentage for profit. This can lead to cost uncertainty and potential overruns if the scope of work is not well-defined or if the project takes longer than anticipated. Effective oversight, detailed tracking of hours and expenses, and strong management are crucial to mitigate these risks and ensure the government receives good value. It is often used when the scope of work cannot be clearly determined at the outset.

How does the PSC code 'D302' relate to the contract's description of ADP Systems Development Services?

The Product Service Code (PSC) 'D302' corresponds to 'ADP Systems Development Services'. This PSC code is directly aligned with the contract's description, which includes 'ADP SYSTEMS DEVELOPMENT SERVICES'. PSC codes are used by the federal government to classify the goods and services being procured. A match between the contract description and the assigned PSC code indicates that the procurement accurately reflects the nature of the services being acquired. This specific code signifies services related to the design, development, integration, and testing of automated data processing systems and software.

What does the 'NOT DISCERNABLE' value for 'PSC' (Primary Standard Classification) imply?

The data field labeled 'PSC' shows 'NOT DISCERNABLE'. This is unusual, as a specific PSC code (like D302) should be assigned to a contract. It's possible this field represents a different classification system or a data entry error in the source record. Given that PSC D302 is explicitly mentioned elsewhere in the data for 'ADP SYSTEMS DEVELOPMENT SERVICES', the 'NOT DISCERNABLE' entry for this specific field might be a data anomaly or refer to a secondary classification that is indeed not discernible from the available information. It does not negate the primary classification of D302.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Computer Systems Design and Related Services › Custom Computer Programming Services

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

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Offers Received: 2

Pricing Type: TIME AND MATERIALS (Y)

Evaluated Preference: NONE

Contractor Details

Parent Company: HP, Inc. (UEI: 009122532)

Address: 13600 EDS DRIVE, HERNDON, VA, 20171

Business Categories: Category Business, Not Designated a Small Business

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Parent Contract

Parent Award PIID: MDA22002A0002

IDV Type: IDC

Timeline