DHS awards $15.6M for Azure cloud services to Peraton, highlighting computing infrastructure needs

Contract Overview

Contract Amount: $15,606,117 ($15.6M)

Contractor: Peraton Technology Services Inc.

Awarding Agency: Department of Homeland Security

Start Date: 2024-05-31

End Date: 2026-05-30

Contract Duration: 729 days

Daily Burn Rate: $21.4K/day

Competition Type: FULL AND OPEN COMPETITION

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: THE PURPOSE OF THIS AWARD IS TO PROCURE AZURE SERVICES & INFORMATION TECHNOLOGY OFFICE SPECIAL INITIATIVES.

Place of Performance

Location: SPRINGFIELD, LOUDOUN County, DISTRICT OF COLUMBIA, 20598

State: District of Columbia Government Spending

Plain-Language Summary

Department of Homeland Security obligated $15.6 million to PERATON TECHNOLOGY SERVICES INC. for work described as: THE PURPOSE OF THIS AWARD IS TO PROCURE AZURE SERVICES & INFORMATION TECHNOLOGY OFFICE SPECIAL INITIATIVES. Key points: 1. The contract focuses on essential cloud computing infrastructure, data processing, and hosting services. 2. Awarded under full and open competition, suggesting a competitive bidding process. 3. The firm-fixed-price structure aims to control costs for the duration of the contract. 4. The duration of 729 days indicates a medium-term need for these services. 5. The services are critical for the Office of Procurement Operations within DHS. 6. No small business set-aside was utilized for this procurement.

Value Assessment

Rating: good

The contract value of $15.6 million for cloud services appears reasonable given the scope of Azure services and IT office support. Benchmarking against similar large-scale cloud procurements for federal agencies suggests this is within expected ranges for computing infrastructure and data processing. The firm-fixed-price contract type helps to establish a clear cost ceiling, which is a positive indicator for value.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded through full and open competition, indicating that all responsible sources were permitted to submit bids. The specific number of bidders is not provided, but this method generally fosters a competitive environment, which can lead to better pricing and service offerings for the government. The open competition suggests that the agency sought the best value proposition from the market.

Taxpayer Impact: Taxpayers benefit from a competitive process that is designed to secure the most advantageous terms and pricing for essential IT services.

Public Impact

The primary beneficiaries are the Department of Homeland Security's Office of Procurement Operations, which will receive enhanced IT infrastructure. The services delivered include cloud computing, data processing, and web hosting, crucial for modern government operations. The geographic impact is centered in the District of Columbia, where the DHS office is located. The contract supports the IT workforce by ensuring access to necessary cloud resources and infrastructure.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for vendor lock-in with specific cloud providers if not managed carefully.
Reliance on a single vendor for critical IT infrastructure could pose availability risks.
Ensuring data security and compliance within the Azure environment requires continuous vigilance.

Positive Signals

Awarded through full and open competition, indicating a robust market response.
Firm-fixed-price contract provides cost certainty for the duration of the award.
The services procured are fundamental to the operational efficiency of a key DHS office.

Sector Analysis

This contract falls within the broader IT services sector, specifically focusing on cloud computing infrastructure and data processing. The market for cloud services is highly competitive, with major providers like Microsoft Azure, Amazon Web Services, and Google Cloud Platform dominating. Federal agencies are increasingly migrating to cloud solutions to enhance scalability, reduce costs, and improve agility. Spending in this category is substantial across the government, with agencies like DHS being significant consumers of these services.

Small Business Impact

This contract was not awarded as a small business set-aside, nor does it appear to have specific subcontracting requirements for small businesses mentioned in the provided data. This means that opportunities for small businesses to directly participate in this specific award are limited. However, the prime contractor, Peraton Technology Services Inc., may engage small businesses as subcontractors for specialized services not covered by the primary scope.

Oversight & Accountability

Oversight for this contract will likely be managed by the Department of Homeland Security's contracting officers and program managers. Accountability measures are inherent in the firm-fixed-price contract, which obligates the contractor to deliver specified services within the agreed budget. Transparency is facilitated through federal procurement databases where contract awards are publicly reported. The Inspector General's office for DHS may conduct audits or investigations if performance issues or potential fraud arise.

Related Government Programs

Cloud Computing Services
IT Infrastructure Services
Data Processing and Hosting
Department of Homeland Security IT Procurement
Azure Cloud Services

Risk Flags

Potential for vendor lock-in
Data security and compliance risks
Service availability and performance dependency

Frequently Asked Questions

What is this federal contract paying for?

Department of Homeland Security awarded $15.6 million to PERATON TECHNOLOGY SERVICES INC.. THE PURPOSE OF THIS AWARD IS TO PROCURE AZURE SERVICES & INFORMATION TECHNOLOGY OFFICE SPECIAL INITIATIVES.

Who is the contractor on this award?

The obligated recipient is PERATON TECHNOLOGY SERVICES INC..

Which agency awarded this contract?

Awarding agency: Department of Homeland Security (Office of Procurement Operations).

What is the total obligated amount?

The obligated amount is $15.6 million.

What is the period of performance?

Start: 2024-05-31. End: 2026-05-30.

What is Peraton Technology Services Inc.'s track record with large federal IT contracts, particularly cloud services?

Peraton Technology Services Inc. has a significant history of performing large federal IT contracts across various agencies, including defense and civilian. Their experience often encompasses complex IT infrastructure, cybersecurity, and mission-critical systems. While specific details on their Azure service delivery for DHS are not detailed here, their broader portfolio suggests they possess the capabilities to manage substantial cloud service agreements. Past performance reviews and contract vehicles utilized by Peraton would offer further insight into their reliability and expertise in delivering similar cloud-based solutions to government clients.

How does the $15.6 million value compare to similar cloud service contracts awarded by DHS or other agencies?

The $15.6 million award for Azure services over approximately two years is a substantial but not extraordinary figure for a federal agency like DHS. Large-scale cloud procurements, especially for comprehensive services like computing infrastructure, data processing, and hosting, can range from millions to tens of millions of dollars annually, depending on the scope and scale of operations. Comparing this to other DHS contracts for similar IT infrastructure or cloud solutions, or to contracts awarded by agencies like GSA or DoD for comparable services, would provide a more precise benchmark. However, the value appears aligned with the typical investment required for robust cloud support.

What are the primary risks associated with this contract, and how are they being mitigated?

Key risks include potential vendor lock-in with Microsoft Azure, which could limit future flexibility and potentially increase costs if not managed proactively. Service availability and performance are also critical risks; any downtime or degradation could significantly impact DHS operations. Data security and compliance with federal regulations (e.g., FedRAMP) are paramount. Mitigation strategies likely involve robust Service Level Agreements (SLAs) with clear performance metrics and penalties, regular security audits, contingency planning, and potentially multi-cloud strategies or exit plans to avoid excessive lock-in. The firm-fixed-price nature also mitigates cost overrun risks for the government.

How effective is the firm-fixed-price contract type in ensuring value for money for these cloud services?

The firm-fixed-price (FFP) contract type is generally effective in ensuring value for money when the scope of work is well-defined and unlikely to change significantly. For cloud services like Azure, where usage can fluctuate, an FFP contract establishes a clear ceiling on government expenditure, transferring some of the cost-risk to the contractor. This encourages the contractor to manage resources efficiently to maintain profitability. However, if usage significantly exceeds projections or if the scope requires substantial changes, an FFP contract might become less flexible, potentially leading to change orders or requiring a new contract. For predictable baseline services, FFP is a strong choice for cost control.

What is the historical spending pattern for similar computing infrastructure and data processing services within DHS?

DHS, like many large federal agencies, has been progressively increasing its spending on cloud computing and related IT infrastructure services over the past decade. This trend reflects a broader government-wide shift away from traditional on-premises data centers towards more flexible, scalable, and cost-effective cloud solutions. Historical data would likely show a transition from capital expenditures on hardware to operational expenditures on cloud subscriptions and services. Analyzing DHS's budget allocations and specific contract awards for IT infrastructure, data processing, and cloud hosting over several fiscal years would reveal this increasing reliance and investment in such services.

Industry Classification

NAICS: Information › Computing Infrastructure Providers, Data Processing, Web Hosting, and Related Services › Computing Infrastructure Providers, Data Processing, Web Hosting, and Related 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: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: 70RTAC24Q00000038

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 15050 CONFERENCE CENTER DR, CHANTILLY, VA, 20151

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $39,752,957

Exercised Options: $17,351,896

Current Obligation: $15,606,117

Actual Outlays: $7,598,606

Subaward Activity

Number of Subawards: 5

Total Subaward Amount: $805,108

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: 70RTAC21D00000006

IDV Type: IDC

Timeline