Treasury's IRS Awards $29.4M IT Testing Contract to Peraton Under Full and Open Competition
Contract Overview
Contract Amount: $29,382,882 ($29.4M)
Contractor: Peraton Inc.
Awarding Agency: Department of the Treasury
Start Date: 2021-07-26
End Date: 2023-07-25
Contract Duration: 729 days
Daily Burn Rate: $40.3K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 1
Pricing Type: COST PLUS FIXED FEE
Sector: IT
Official Description: INFORMATION TECHNOLOGY,ENTERPRISE SERVICES,ENTERPRISE SYSTEMS TESTING (EST) SYSTEMS ACCEPTABILITY TESTING(SAT),FINAL INTEGRATION TESTING(FIT),PERFORMANCE/CAPACITY TESTING,SECTION 508 COMPLIANCE TESTING,SECURITY RELATED TESTING AND AUTOMATED COVID-19
Place of Performance
Location: LANHAM, PRINCE GEORGES County, MARYLAND, 20706
State: Maryland Government Spending
Plain-Language Summary
Department of the Treasury obligated $29.4 million to PERATON INC. for work described as: INFORMATION TECHNOLOGY,ENTERPRISE SERVICES,ENTERPRISE SYSTEMS TESTING (EST) SYSTEMS ACCEPTABILITY TESTING(SAT),FINAL INTEGRATION TESTING(FIT),PERFORMANCE/CAPACITY TESTING,SECTION 508 COMPLIANCE TESTING,SECURITY RELATED TESTING AND AUTOMATED COVID-19 Key points: 1. The contract focuses on critical IT systems testing, including SAT, FIT, performance, security, and Section 508 compliance. 2. Peraton, the sole awardee, will provide these services over a 24-month period. 3. The contract type is Cost Plus Fixed Fee, which can lead to cost overruns if not managed carefully. 4. This spending falls within the Computer Systems Design Services sector, a significant area of government IT expenditure.
Value Assessment
Rating: good
The contract value of $29.4M for 24 months of comprehensive IT testing services appears reasonable when benchmarked against similar large-scale testing contracts. However, the Cost Plus Fixed Fee structure warrants close monitoring to ensure costs remain within expectations.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
The contract was awarded under full and open competition, suggesting a robust price discovery process. This method generally leads to more competitive pricing by allowing all eligible vendors to bid.
Taxpayer Impact: The competitive award process is designed to ensure taxpayer funds are used efficiently for essential IT testing services.
Public Impact
Ensures the reliability and security of IRS IT systems, impacting taxpayer services. Supports compliance with accessibility standards (Section 508), making IRS systems usable for all. The testing scope includes critical areas like performance and security, vital for government operations. The contract duration of 24 months provides sustained support for IRS IT infrastructure.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Cost Plus Fixed Fee contract type can incentivize cost overruns.
- Lack of small business participation noted.
- Specific testing methodologies and success metrics are not detailed.
Positive Signals
- Awarded under full and open competition.
- Covers a broad range of essential IT testing services.
- Long-term contract provides stability for IRS IT operations.
Sector Analysis
This contract falls under the IT sector, specifically Computer Systems Design Services. Government spending in this area is substantial, driven by the need for modern, secure, and compliant digital infrastructure. Benchmarks for similar testing services vary widely based on scope and complexity.
Small Business Impact
The data indicates that this contract was not awarded to a small business (ss: false, sb: false). There is an opportunity to increase small business participation in future IT service contracts through set-asides or subcontracting requirements.
Oversight & Accountability
The contract was awarded via a Delivery Order (DO) under a larger contract vehicle. Oversight will be crucial to manage the Cost Plus Fixed Fee structure and ensure deliverables meet IRS requirements.
Related Government Programs
- Computer Systems Design Services
- Department of the Treasury Contracting
- Internal Revenue Service Programs
Risk Flags
- Cost Plus Fixed Fee contract type increases risk of cost overruns.
- No small business participation identified.
- Potential for scope creep without clearly defined testing metrics.
- Reliance on a single vendor for critical testing functions.
Tags
computer-systems-design-services, department-of-the-treasury, md, delivery-order, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of the Treasury awarded $29.4 million to PERATON INC.. INFORMATION TECHNOLOGY,ENTERPRISE SERVICES,ENTERPRISE SYSTEMS TESTING (EST) SYSTEMS ACCEPTABILITY TESTING(SAT),FINAL INTEGRATION TESTING(FIT),PERFORMANCE/CAPACITY TESTING,SECTION 508 COMPLIANCE TESTING,SECURITY RELATED TESTING AND AUTOMATED COVID-19
Who is the contractor on this award?
The obligated recipient is PERATON INC..
Which agency awarded this contract?
Awarding agency: Department of the Treasury (Internal Revenue Service).
What is the total obligated amount?
The obligated amount is $29.4 million.
What is the period of performance?
Start: 2021-07-26. End: 2023-07-25.
What is the estimated cost breakdown for the different testing phases (SAT, FIT, performance, security, Section 508)?
The provided data does not detail the cost breakdown for individual testing phases. A Cost Plus Fixed Fee contract requires careful monitoring of all incurred costs against the fixed fee to ensure the total expenditure remains justified and within budget. Further analysis would necessitate access to the detailed contract line item breakdown.
What are the key performance indicators (KPIs) and acceptance criteria for each testing phase to ensure effectiveness?
The data does not specify the KPIs or acceptance criteria for each testing phase. Effective oversight requires clearly defined metrics for success, such as defect detection rates, test coverage, and performance benchmarks. Without these, assessing the true effectiveness and value of the testing services is challenging.
How will the Cost Plus Fixed Fee structure be managed to mitigate risks of cost overruns and ensure value for money?
Managing a Cost Plus Fixed Fee contract involves rigorous financial oversight, regular audits of incurred costs, and strict adherence to the Statement of Work. The IRS must establish clear reporting requirements for Peraton, monitor expenditures closely, and ensure all costs are reasonable, allocable, and allowable to prevent budget overruns and maximize taxpayer 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 › IT AND TELECOM - APLLICATIONS
Competition & Pricing
Extent Competed: FULL AND OPEN COMPETITION
Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY
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: $54,989,572
Exercised Options: $36,262,931
Current Obligation: $29,382,882
Actual Outlays: $28,135,571
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: NO
Parent Contract
Parent Award PIID: 47QTCK18D0011
IDV Type: GWAC
Timeline
Start Date: 2021-07-26
Current End Date: 2023-07-25
Potential End Date: 2023-07-25 15:49:38
Last Modified: 2025-05-01
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