State Dept. Awards $295M Task Order to Peraton for Computer Systems Design Services
Contract Overview
Contract Amount: $294,928,963 ($294.9M)
Contractor: Peraton Inc.
Awarding Agency: Department of State
Start Date: 2020-07-10
End Date: 2027-06-03
Contract Duration: 2,519 days
Daily Burn Rate: $117.1K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 3
Pricing Type: LABOR HOURS
Sector: IT
Official Description: INCREMENTAL FUNDING
Place of Performance
Location: MCLEAN, FAIRFAX County, VIRGINIA, 22102
State: Virginia Government Spending
Plain-Language Summary
Department of State obligated $294.9 million to PERATON INC. for work described as: INCREMENTAL FUNDING Key points: 1. Significant contract value of $295 million highlights substantial investment in IT services. 2. Full and open competition was utilized, suggesting a competitive bidding process. 3. The contract spans over 7 years, indicating a long-term need for these services. 4. The use of labor hours pricing can introduce cost variability and requires careful monitoring.
Value Assessment
Rating: fair
The contract is priced using labor hours, which can be less predictable than fixed-price contracts. Without specific labor rates and estimated hours, a direct comparison to similar contracts is difficult. The benchmark of $1,170,820 per year suggests a moderate cost for the scope of services.
Cost Per Unit: $1,170,820/year
Competition Analysis
Competition Level: full-and-open
The contract was awarded under full and open competition, which generally promotes competitive pricing. However, the use of labor hours means the final price is dependent on actual hours worked, potentially leading to costs exceeding initial estimates if not managed effectively.
Taxpayer Impact: Taxpayer funds are being used for IT services. While competition aims for efficiency, the labor hour pricing model necessitates robust oversight to ensure value for money and prevent cost overruns.
Public Impact
Ensures continued operation and modernization of critical computer systems for the Department of State. Supports national security and diplomatic functions through reliable IT infrastructure. Potential for job creation within the IT sector through Peraton's service delivery.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Labor hour pricing can lead to cost uncertainty.
- Long contract duration may not adapt to rapidly changing technology.
- No small business participation noted.
Positive Signals
- Awarded through full and open competition.
- Significant investment in essential IT services.
- Long-term commitment ensures service continuity.
Sector Analysis
This contract falls within the Computer Systems Design Services sector, a critical area for government operations. Spending in this sector is consistently high as agencies rely on technology for mission execution. Benchmarks vary widely based on complexity and duration.
Small Business Impact
The data indicates that small businesses were not directly involved in this specific contract award. Opportunities for small business subcontracting were not explicitly stated, which could be a missed opportunity for broader economic impact.
Oversight & Accountability
The contract's long duration and labor-hour pricing model require diligent oversight from the Department of State to ensure performance standards are met and costs remain within reasonable bounds. Regular reviews and audits will be crucial for accountability.
Related Government Programs
- Computer Systems Design Services
- Department of State Contracting
- Department of State Programs
Risk Flags
- Potential for cost overruns due to labor hour pricing.
- Risk of technology obsolescence over the contract's long duration.
- Lack of explicit small business participation.
- Dependency on a single contractor for critical IT services.
Tags
computer-systems-design-services, department-of-state, va, delivery-order, 100m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of State awarded $294.9 million to PERATON INC.. INCREMENTAL FUNDING
Who is the contractor on this award?
The obligated recipient is PERATON INC..
Which agency awarded this contract?
Awarding agency: Department of State (Department of State).
What is the total obligated amount?
The obligated amount is $294.9 million.
What is the period of performance?
Start: 2020-07-10. End: 2027-06-03.
What is the estimated total number of labor hours and the average hourly rate to assess the value proposition more accurately?
Without the estimated labor hours and specific rates, a precise value assessment is challenging. The total award value of $295 million, spread over 2519 days (approx. 7 years), implies an average annual cost of roughly $42 million. Understanding the breakdown of labor categories and hours is key to determining if this represents a fair market price for the services rendered.
What are the specific performance metrics and service level agreements (SLAs) in place to mitigate risks associated with labor hour contracts?
Robust performance metrics and SLAs are essential for managing labor hour contracts. These should clearly define deliverables, response times, and quality standards. The Department of State must actively monitor adherence to these SLAs to ensure Peraton is meeting its obligations and to justify the expenditure of taxpayer funds effectively.
How will the Department of State ensure this contract remains relevant and cost-effective given the rapid pace of technological change over its 7-year duration?
The Department of State should incorporate mechanisms for regular contract reviews and potential modifications to adapt to technological advancements. This could include options for incorporating new technologies or adjusting service scopes. Proactive management and flexibility will be key to ensuring the contract continues to meet evolving needs and provides ongoing value.
Industry Classification
NAICS: Professional, Scientific, and Technical Services › Computer Systems Design and Related Services › Computer Systems Design Services
Product/Service Code: IT AND TELECOM - INFORMATION TECHNOLOGY AND TELECOMMUNICATIONS › ADP AND TELECOMMUNICATIONS
Competition & Pricing
Extent Competed: FULL AND OPEN COMPETITION
Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY
Solicitation ID: 19AQMM20R0032
Offers Received: 3
Pricing Type: LABOR HOURS (Z)
Evaluated Preference: NONE
Contractor Details
Parent Company: Veritas Capital Fund Management, L.L.C.
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: $381,469,906
Exercised Options: $301,735,398
Current Obligation: $294,928,963
Actual Outlays: $74,545,741
Subaward Activity
Number of Subawards: 41
Total Subaward Amount: $118,308,923
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Parent Contract
Parent Award PIID: HHSN316201200036W
IDV Type: GWAC
Timeline
Start Date: 2020-07-10
Current End Date: 2027-06-03
Potential End Date: 2027-06-03 00:00:00
Last Modified: 2026-04-10
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