DoD's $27.2M IT Services Contract Awarded to Peraton Enterprise Solutions LLC via Non-Competitive Process

Contract Overview

Contract Amount: $27,212,078 ($27.2M)

Contractor: Peraton Enterprise Solutions LLC

Awarding Agency: Department of Defense

Start Date: 2013-03-31

End Date: 2013-09-30

Contract Duration: 183 days

Daily Burn Rate: $148.7K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: IGF::OT::IGF OTHER ADP AND TELECOMMUNICATIONS SVS

Place of Performance

Location: HERNDON, FAIRFAX County, VIRGINIA, 20171

State: Virginia Government Spending

Plain-Language Summary

Department of Defense obligated $27.2 million to PERATON ENTERPRISE SOLUTIONS LLC for work described as: IGF::OT::IGF OTHER ADP AND TELECOMMUNICATIONS SVS Key points: 1. Contract awarded without competition, raising questions about potential cost savings and optimal vendor selection. 2. The fixed-price contract type suggests a defined scope, but the lack of competition limits benchmarking. 3. Services fall under 'Other Computer Related Services,' a broad category requiring deeper analysis of specific deliverables. 4. The contract duration of 183 days is relatively short, indicating a potential need for follow-on work. 5. Awarded by the Department of the Navy, this contract represents a portion of broader IT spending within the DoD. 6. The absence of small business set-aside flags suggests this was not specifically targeted for smaller enterprises.

Value Assessment

Rating: questionable

Benchmarking the value of this $27.2 million contract is challenging due to its non-competitive nature and the broad 'Other Computer Related Services' classification. Without competing offers, it's difficult to ascertain if the pricing reflects market rates or if taxpayers received the best possible value. The firm fixed-price structure provides cost certainty for the government, but the lack of competitive pressure may have led to a higher price than could have been achieved through an open bidding process. Further analysis of the specific services rendered and their necessity would be required for a more definitive value assessment.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning it was not competed among multiple vendors. This approach is typically used when only one vendor can provide the required goods or services, or in urgent situations. The lack of competition means there was no opportunity for price discovery through bidding, potentially leading to higher costs for the government compared to a competitive procurement. The specific justification for the sole-source award is not detailed here but would be crucial for understanding the procurement rationale.

Taxpayer Impact: Taxpayers may have paid a premium for these IT services due to the absence of competitive bidding. Without multiple offers, the government had limited leverage to negotiate the lowest possible price, potentially resulting in less efficient use of public funds.

Public Impact

The Department of the Navy benefits from the provision of essential IT services, ensuring operational continuity. The contract supports the functioning of military and administrative operations within the Navy's purview. Services are likely delivered within Virginia, the stated location for the contractor's Special Service (ST) designation. The contract supports the IT infrastructure and potentially the workforce reliant on these services within the Navy.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition limits transparency and potential for cost savings.
Broad service category ('Other Computer Related Services') obscures specific performance metrics and value.
Sole-source award raises concerns about vendor lock-in and future pricing.
Short contract duration may indicate a stop-gap measure rather than a strategic long-term solution.

Positive Signals

Firm fixed-price contract provides cost certainty for the government.
Award to an established entity (Peraton) may suggest a known quantity for service delivery.
Contract supports critical IT functions within the Department of the Navy.

Sector Analysis

The IT services sector is a vast and critical component of federal spending, encompassing a wide range of support, development, and maintenance activities. This contract, classified under 'Other Computer Related Services' (NAICS 541519), falls within a segment focused on non-customized IT solutions. Federal spending in this area is substantial, with agencies constantly seeking to modernize infrastructure and enhance cybersecurity. Comparable contracts in this space can range from small, specialized task orders to large, multi-year enterprise-wide agreements. The $27.2 million value for a 183-day period suggests a significant scope of work, potentially involving complex system support or integration.

Small Business Impact

This contract does not appear to have been set aside for small businesses, as indicated by the 'ss' and 'sb' fields being false. The award to Peraton Enterprise Solutions LLC, a large business, suggests that the scope of work was not tailored for small business participation. There is no explicit information regarding subcontracting plans for small businesses. Without a small business set-aside, the primary impact on the small business ecosystem is the potential missed opportunity for smaller firms to compete for and perform this work.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of the Navy's contracting and program management offices. As a delivery order under a larger contract vehicle (implied by 'AW' - DELIVERY ORDER), oversight might also be influenced by the terms of the parent contract. Transparency is limited due to the sole-source nature of the award. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected. Accountability would be measured by the contractor's adherence to the firm fixed-price terms and the delivery of specified IT services.

Related Government Programs

Department of Defense IT Services
Navy Information Technology Procurement
Other Computer Related Services Contracts
Sole Source IT Acquisitions
Firm Fixed Price IT Contracts

Risk Flags

Sole-source award
Lack of competition
Broad service category
Short contract duration

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $27.2 million to PERATON ENTERPRISE SOLUTIONS LLC. IGF::OT::IGF OTHER ADP AND TELECOMMUNICATIONS SVS

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 (Department of the Navy).

What is the total obligated amount?

The obligated amount is $27.2 million.

What is the period of performance?

Start: 2013-03-31. End: 2013-09-30.

What specific IT services were procured under this contract, and how do they align with the 'Other Computer Related Services' NAICS code?

The provided data abbreviates the description as 'IGF::OT::IGF OTHER ADP AND TELECOMMUNICATIONS SVS,' which translates to 'Information Technology General Fund::Other Telecommunications Services::Information Technology General Fund Other ADP and Telecommunications Services.' This suggests the contract covered a range of IT and telecommunications support, potentially including network management, system maintenance, or help desk services. The NAICS code 541519, 'Other Computer Related Services,' is broad and encompasses services like computer facilities management, IT support services, and disaster recovery services. Without more detailed contract line item numbers (CLINs) or a statement of work, it's difficult to pinpoint the exact services. However, the description implies support for automated data processing (ADP) and telecommunications infrastructure, crucial for military operations.

What was the justification for awarding this $27.2 million contract on a sole-source basis?

The provided data indicates the contract type was 'NOT COMPETED,' which aligns with a sole-source award. Federal procurement regulations (like the Federal Acquisition Regulation - FAR) allow for sole-source awards under specific circumstances, such as when only one responsible source can provide the required supplies or services, or in cases of urgent and compelling need. Without the specific justification document (e.g., a Justification and Approval - J&A), it's impossible to determine the precise reason. However, common justifications include unique capabilities, proprietary technology, or a critical need that cannot be met through competitive means within the required timeframe. The lack of competition means taxpayers did not benefit from potential cost savings that could arise from a bidding process.

How does the $27.2 million value for a 183-day contract compare to similar IT services contracts within the Department of the Navy or DoD?

A contract value of approximately $27.2 million over 183 days (roughly 6 months) translates to a monthly burn rate of about $14.87 million ($27,212,078.28 / 6 months). This is a substantial monthly expenditure for IT services. While the specific nature of the services is broadly defined, this rate suggests either a very high volume of support, complex systems requiring specialized expertise, or potentially a less cost-effective arrangement due to the lack of competition. Benchmarking requires comparing this to similar sole-source or competitively awarded contracts for 'Other Computer Related Services' within the Navy or DoD, considering factors like service scope, duration, and contractor performance history. Without such comparisons, it's difficult to definitively label this as high or low value, but the rate is significant.

What is Peraton Enterprise Solutions LLC's track record with the federal government, particularly the Department of the Navy, for IT services?

Peraton Enterprise Solutions LLC is a known entity in the federal contracting space, often handling large and complex IT and telecommunications contracts. Their track record with the Department of the Navy and the broader Department of Defense is extensive, frequently involving mission-critical systems and services. While this specific contract was sole-sourced, Peraton has secured numerous other contracts, both competitive and non-competitive, across various agencies. A comprehensive review of their past performance, including customer satisfaction ratings, past performance evaluations, and any history of contract disputes or awards, would be necessary to fully assess their reliability and capability for this particular $27.2 million IT services award. Their size and established presence suggest a capacity to handle significant federal IT requirements.

What are the potential risks associated with a sole-source award for IT services, especially for a contract valued at $27.2 million?

The primary risk associated with a sole-source award is the potential for inflated pricing. Without competitive pressure, the contractor may not be incentivized to offer the lowest possible price, leading to inefficient use of taxpayer funds. Another significant risk is vendor lock-in, where the agency becomes dependent on a single provider, making it difficult and costly to switch vendors in the future. This can also stifle innovation, as the incumbent may have less incentive to introduce new technologies or efficiencies. Furthermore, the lack of competition can reduce transparency in the procurement process, making it harder to assess whether the government is receiving fair market value. For a contract of this magnitude ($27.2 million), these risks are amplified, potentially impacting a substantial portion of the agency's IT budget.

Given the short duration (183 days), does this contract indicate a potential need for follow-on work or a gap-filling measure?

The 183-day duration (approximately six months) for a $27.2 million IT services contract is relatively short for establishing long-term IT infrastructure or comprehensive system overhauls. This brevity strongly suggests that the contract may be intended as a stop-gap measure to fulfill immediate needs, bridge a gap until a larger, competitively awarded contract is in place, or address a specific, time-bound project. It is common for agencies to use shorter-duration contracts, especially sole-source ones, to maintain essential services while a more thorough procurement process is underway. Therefore, it is highly probable that this contract anticipates or necessitates follow-on work, either through extensions, task orders under a parent contract, or a subsequent competitive procurement for sustained services.

Industry Classification

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

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

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: HP, Inc.

Address: 13600 EDS DR, HERNDON, VA, 20171

Business Categories: Category Business, Limited Liability Corporation, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $27,212,078

Exercised Options: $27,212,078

Current Obligation: $27,212,078

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: YES

Parent Contract

Parent Award PIID: N0003910D0010

IDV Type: IDC

Timeline