Peraton Inc. awarded $20.9M for enterprise systems testing, highlighting IT services demand
Contract Overview
Contract Amount: $20,915,466 ($20.9M)
Contractor: Peraton Inc.
Awarding Agency: Department of the Treasury
Start Date: 2023-09-22
End Date: 2024-09-29
Contract Duration: 373 days
Daily Burn Rate: $56.1K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 1
Pricing Type: COST PLUS FIXED FEE
Sector: IT
Official Description: ENTERPRISE SYSTEMS TESTING
Place of Performance
Location: LANHAM, PRINCE GEORGES County, MARYLAND, 20706
State: Maryland Government Spending
Plain-Language Summary
Department of the Treasury obligated $20.9 million to PERATON INC. for work described as: ENTERPRISE SYSTEMS TESTING Key points: 1. Contract value represents a significant investment in critical IT infrastructure support. 2. Competition dynamics for this contract are assessed to understand pricing efficiency. 3. Risk indicators are evaluated based on contract type and performance history. 4. Performance context is crucial for understanding the value delivered against objectives. 5. Sector positioning places this contract within the broader IT services market for government agencies.
Value Assessment
Rating: good
The contract value of $20.9 million for enterprise systems testing appears reasonable given the scope of computer systems design services. Benchmarking against similar contracts for IT testing and system design within federal agencies suggests that this award falls within expected ranges. The Cost Plus Fixed Fee (CPFF) contract type allows for flexibility while maintaining cost control, indicating a potentially good value if managed effectively. Further analysis of specific deliverables and performance metrics would refine this assessment.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
This contract was awarded under full and open competition, indicating that all eligible responsible sources were permitted to submit offers. The presence of multiple bidders, though the exact number is not specified, generally fosters competitive pricing and encourages contractors to offer their best value. This approach is designed to ensure that the government receives optimal pricing and quality for its IT services.
Taxpayer Impact: Full and open competition is beneficial for taxpayers as it drives down costs through market forces and ensures that government funds are used efficiently by selecting the most cost-effective and capable provider.
Public Impact
The Internal Revenue Service (IRS) benefits from enhanced enterprise systems testing, leading to more reliable IT operations. Services delivered include crucial computer systems design and testing, ensuring the integrity of IRS systems. The geographic impact is primarily within Maryland, where the contractor is based, supporting federal IT infrastructure. Workforce implications include employment opportunities for IT professionals specializing in systems design and testing.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Cost Plus Fixed Fee contracts can sometimes lead to cost overruns if not closely monitored.
- The duration of the contract (373 days) requires sustained oversight to ensure timely completion and quality.
- Dependence on a single award (no=1) for this specific task warrants monitoring for potential single-source risks in future iterations.
Positive Signals
- Awarded under full and open competition, suggesting a competitive bidding process.
- The contract is for essential IT services, aligning with government modernization efforts.
- The contractor, Peraton Inc., has a significant presence in the government contracting space.
Sector Analysis
The IT services sector for the federal government is highly competitive and represents a substantial portion of overall federal spending. Contracts for computer systems design and related services, such as enterprise systems testing, are critical for maintaining and upgrading the complex technological infrastructure used by agencies like the IRS. Spending in this area is driven by the need for cybersecurity, data management, and efficient digital service delivery. Comparable spending benchmarks for similar IT services contracts can vary widely based on scope, duration, and specific technical requirements.
Small Business Impact
This contract was not set aside for small businesses, and there is no indication of subcontracting requirements for small businesses. Therefore, the direct impact on the small business ecosystem is minimal. However, the prime contractor may engage small businesses as subcontractors, which would provide indirect opportunities. Further investigation into Peraton Inc.'s subcontracting plans would clarify the extent of small business involvement.
Oversight & Accountability
Oversight for this contract is likely managed by the contracting officer and the relevant program office within the IRS. Accountability measures would be tied to the performance work statement and the Cost Plus Fixed Fee structure, requiring detailed reporting and milestone achievement. Transparency is facilitated through contract award databases, though specific performance details may be less public. Inspector General jurisdiction would apply if any fraud, waste, or abuse is suspected.
Related Government Programs
- IRS IT Modernization Programs
- Federal Civilian IT Services
- Computer Systems Design Services
- Enterprise Resource Planning (ERP) Systems Support
- IT Infrastructure Modernization
Risk Flags
- Cost Control Risk (CPFF)
- Scope Creep Potential
- Performance Monitoring Intensity
Tags
it-services, computer-systems-design, enterprise-systems-testing, department-of-the-treasury, internal-revenue-service, cost-plus-fixed-fee, full-and-open-competition, peraton-inc, maryland, it-contracting
Frequently Asked Questions
What is this federal contract paying for?
Department of the Treasury awarded $20.9 million to PERATON INC.. ENTERPRISE SYSTEMS TESTING
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 $20.9 million.
What is the period of performance?
Start: 2023-09-22. End: 2024-09-29.
What is Peraton Inc.'s track record with the IRS and similar federal agencies for IT services?
Peraton Inc. has a substantial track record in providing IT and mission support services to various U.S. federal agencies, including significant work with the Department of Defense and intelligence community. Their experience encompasses a wide range of services, from enterprise IT to cybersecurity and mission systems. While specific contract details with the IRS for enterprise systems testing are not detailed here, Peraton's broader portfolio suggests they possess the technical capabilities and experience necessary for such a task. A deeper dive into their past performance ratings and any past issues or successes on similar IRS contracts would provide a more precise assessment of their suitability and reliability for this specific award.
How does the $20.9 million contract value compare to similar enterprise systems testing contracts awarded by the IRS or other agencies?
The $20.9 million award for enterprise systems testing by the IRS falls within a typical range for significant IT service contracts. Federal agencies frequently award contracts in the multi-million dollar bracket for comprehensive system design, testing, and maintenance services. For instance, contracts for similar scope in areas like cybersecurity testing, software development lifecycle support, or network infrastructure upgrades can range from $5 million to over $50 million, depending on the complexity, duration, and specific technologies involved. The Cost Plus Fixed Fee (CPFF) structure suggests a need for flexibility, which can influence pricing. Without specific details on the exact deliverables and the number of bidders, a precise value-for-money comparison is challenging, but the amount is not an outlier for the services described.
What are the primary risks associated with a Cost Plus Fixed Fee (CPFF) contract for enterprise systems testing?
The primary risks associated with a Cost Plus Fixed Fee (CPFF) contract for enterprise systems testing revolve around cost control and contractor efficiency. While the fixed fee provides the contractor with an incentive to control costs, the government bears the risk of increased costs if the contractor's actual expenses exceed the estimated costs. This structure can sometimes lead to scope creep or less aggressive cost management compared to fixed-price contracts. For the government, effective oversight is crucial to ensure that costs remain reasonable and that the contractor is not incentivized to inflate expenses to increase the base for future fixed fees. The CPFF structure is often used when the scope of work is not precisely defined at the outset, allowing for flexibility but requiring robust monitoring of expenditures and progress.
How effective is full and open competition in ensuring optimal pricing and quality for IT services like enterprise systems testing?
Full and open competition is generally considered the most effective method for ensuring optimal pricing and quality for IT services. By allowing all responsible sources to compete, the government maximizes the pool of potential offerors, thereby increasing the likelihood of receiving competitive bids that reflect fair market value. This process encourages innovation and efficiency as contractors strive to differentiate themselves based on price, technical approach, and past performance. The IRS's decision to use full and open competition for this enterprise systems testing contract suggests a commitment to leveraging market forces to achieve the best possible outcome for taxpayers. The success of this approach hinges on a well-defined scope of work and a rigorous evaluation process.
What is the historical spending trend for enterprise systems testing and similar IT services at the IRS?
Historical spending trends for enterprise systems testing and similar IT services at the IRS have generally shown a consistent and significant investment. As a large, complex agency reliant on vast amounts of data and intricate tax processing systems, the IRS continuously requires robust IT infrastructure and ongoing testing to ensure operational integrity, security, and compliance. Spending in this area typically fluctuates based on modernization initiatives, system upgrades, and evolving cybersecurity threats. While specific year-over-year figures for 'enterprise systems testing' alone are not readily available without deeper database access, the overall IT services budget for the IRS has historically been in the hundreds of millions, if not billions, of dollars annually, reflecting the critical nature of these functions.
What are the potential implications of this contract on the broader IT services market, particularly for competitors?
This contract award to Peraton Inc. has several implications for the broader IT services market. Firstly, it reinforces Peraton's position as a key player in the federal IT contracting space, potentially enhancing their reputation and ability to win future contracts. For competitors, it signifies the ongoing demand for enterprise systems testing and IT design services within government agencies, particularly the IRS. It also highlights the competitive landscape, where companies must demonstrate strong technical capabilities, competitive pricing, and a proven track record to secure such awards. The full and open competition aspect means that other firms had the opportunity to bid, and their performance in this process could influence their strategies for future solicitations. The success of Peraton on this contract could also set benchmarks for future similar procurements.
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 - END USER
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: $36,219,020
Exercised Options: $21,160,001
Current Obligation: $20,915,466
Actual Outlays: $20,017,075
Subaward Activity
Number of Subawards: 13
Total Subaward Amount: $5,646,078
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Parent Contract
Parent Award PIID: 47QTCK18D0011
IDV Type: GWAC
Timeline
Start Date: 2023-09-22
Current End Date: 2024-09-29
Potential End Date: 2024-09-30 11:39:25
Last Modified: 2025-07-15
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