GSA's $76.4M IT contract with Peraton Technology Services Inc. awarded under full and open competition

Contract Overview

Contract Amount: $76,443,852 ($76.4M)

Contractor: Peraton Technology Services Inc.

Awarding Agency: General Services Administration

Start Date: 2016-06-01

End Date: 2021-07-31

Contract Duration: 1,886 days

Daily Burn Rate: $40.5K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 17

Pricing Type: COST PLUS FIXED FEE

Sector: IT

Official Description: IGF::OT::IGF

Place of Performance

Location: FORT GEORGE G MEADE, ANNE ARUNDEL County, MARYLAND, 20755

State: Maryland Government Spending

Plain-Language Summary

General Services Administration obligated $76.4 million to PERATON TECHNOLOGY SERVICES INC. for work described as: IGF::OT::IGF Key points: 1. Contract value represents a significant investment in custom computer programming services. 2. Awarded via delivery order, suggesting a flexible approach to fulfilling IT needs. 3. The contract duration of 1886 days indicates a long-term requirement for these services. 4. The use of Cost Plus Fixed Fee pricing may introduce cost variability. 5. No small business set-aside was utilized, potentially limiting opportunities for smaller firms. 6. The contract was awarded to a single vendor, Peraton Technology Services Inc.

Value Assessment

Rating: fair

The total contract value of $76.4 million over approximately five years suggests a substantial investment. Benchmarking this against similar custom computer programming services contracts is challenging without more specific service details. The Cost Plus Fixed Fee (CPFF) pricing structure, while common for complex IT projects, can lead to costs exceeding initial estimates if not managed carefully. The absence of detailed performance metrics or cost breakdowns makes a definitive value-for-money assessment difficult.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that all responsible sources were permitted to submit offers. The presence of 17 bidders suggests a competitive environment for this requirement. A higher number of bidders generally leads to better price discovery and potentially lower costs for the government. However, the specific details of the bidding process and the final award criteria are not provided.

Taxpayer Impact: The full and open competition likely resulted in a more competitive price for taxpayers compared to a sole-source or limited competition award. The 17 bids suggest that the government received a range of options, increasing the likelihood of securing favorable terms.

Public Impact

Federal agencies requiring custom computer programming services benefit from this contract. The contract supports the development and maintenance of specialized IT solutions. The geographic impact is primarily within Maryland, where the contract is stated to be. The contract likely supports a workforce of IT professionals and programmers.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost Plus Fixed Fee (CPFF) pricing can lead to cost overruns if not closely monitored.
The long contract duration may present challenges in adapting to rapidly evolving technology.
Lack of specific performance metrics makes it difficult to assess contractor efficiency.
The absence of small business participation could limit broader economic impact.

Positive Signals

Awarded through full and open competition, ensuring a competitive bidding process.
A significant number of bidders (17) indicates strong market interest and potential for good pricing.
The contract addresses a clear need for custom computer programming services within the government.

Sector Analysis

This contract falls within the Information Technology (IT) sector, specifically custom computer programming services. This is a critical area for government operations, encompassing software development, system integration, and IT consulting. The market for IT services is highly competitive, with numerous large and small businesses vying for government contracts. The value of this contract is moderate within the broader IT services landscape, but significant for the specific services procured.

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 contract are limited. While the prime contractor may engage small businesses as subcontractors, the primary award did not prioritize small business participation.

Oversight & Accountability

Oversight for this contract would typically be managed by the General Services Administration (GSA) through its Federal Acquisition Service. Mechanisms would include contract performance reviews, financial audits, and adherence to the terms of the Cost Plus Fixed Fee agreement. Transparency is generally maintained through contract databases like FPDS, though detailed operational oversight specifics are not provided.

Related Government Programs

Custom Computer Programming Services
IT Professional Services
Federal Civilian IT Spending
GSA Schedules

Risk Flags

Cost Plus Fixed Fee pricing requires diligent oversight to manage costs.
Long contract duration may lead to technological obsolescence.
Lack of explicit small business subcontracting goals.

Frequently Asked Questions

What is this federal contract paying for?

General Services Administration awarded $76.4 million to PERATON TECHNOLOGY SERVICES INC.. IGF::OT::IGF

Who is the contractor on this award?

The obligated recipient is PERATON TECHNOLOGY SERVICES INC..

Which agency awarded this contract?

Awarding agency: General Services Administration (Federal Acquisition Service).

What is the total obligated amount?

The obligated amount is $76.4 million.

What is the period of performance?

Start: 2016-06-01. End: 2021-07-31.

What is the historical spending trend for custom computer programming services by the GSA?

Historical spending data for custom computer programming services by the General Services Administration (GSA) reveals a consistent demand driven by the need for tailored IT solutions across various federal agencies. While specific figures fluctuate year-to-year based on agency requirements and budget allocations, the overall trend indicates a sustained and often increasing reliance on these services. GSA, through its various contracting vehicles like MAS and other IDIQ contracts, facilitates significant procurement in this category. Factors influencing this trend include the ongoing digital transformation initiatives within the government, the need to modernize legacy systems, and the development of new citizen-facing digital services. Analyzing past spending patterns can help identify peak periods of procurement and the types of programming services most frequently sought, providing context for current contract values and future projections.

How does the Cost Plus Fixed Fee (CPFF) pricing structure compare to other contract types for similar IT services?

The Cost Plus Fixed Fee (CPFF) pricing structure is often used for complex IT projects where the scope of work is not fully defined at the outset or is expected to evolve. In CPFF contracts, the government reimburses the contractor for allowable costs incurred, plus a predetermined fixed fee representing profit. This contrasts with Fixed Price contracts, where the price is set regardless of actual costs, offering more cost certainty to the government but potentially higher risk for the contractor. Time and Materials (T&M) contracts, another common type for IT services, bill based on labor hours and material costs, offering flexibility but less cost control. Compared to these, CPFF aims to balance flexibility for evolving requirements with a defined profit margin. However, it requires robust government oversight to control costs and ensure the fixed fee remains appropriate for the effort.

What are the potential risks associated with a 1886-day contract duration for custom computer programming?

A contract duration of 1886 days (approximately 5.15 years) for custom computer programming services carries several potential risks. The most significant is technological obsolescence; the IT landscape evolves rapidly, and solutions developed early in the contract may be outdated by its end. This necessitates careful planning for updates, modifications, or potential re-procurement. Another risk is scope creep, where the evolving needs of the agency might lead to significant changes in the original requirements, potentially increasing costs and extending timelines beyond initial projections, even with a CPFF structure. Furthermore, maintaining contractor engagement and performance over such an extended period can be challenging. Long durations can also make it difficult to retain specialized talent if the project becomes stagnant or if market opportunities for those skills improve elsewhere.

How does the number of bidders (17) impact the government's ability to achieve best value?

A high number of bidders, such as the 17 in this case, generally enhances the government's ability to achieve best value. Increased competition typically drives down prices as contractors vie for the award. It also provides a wider range of technical solutions and approaches, allowing the government to select the option that best meets its specific needs, not just on price but also on technical merit and overall value. With 17 bidders, the government has a broader pool of expertise to draw from and a greater likelihood of finding a contractor whose proposal aligns perfectly with the requirements. This competitive pressure also incentivizes contractors to propose more efficient and cost-effective solutions to win the contract, ultimately benefiting the taxpayer.

What is the typical profit margin for IT services contractors under a CPFF contract with the GSA?

Determining a 'typical' profit margin for IT services contractors under a Cost Plus Fixed Fee (CPFF) contract with the GSA is complex, as the fixed fee is negotiated and can vary significantly based on several factors. These include the complexity and risk of the project, the level of innovation required, the contractor's demonstrated capabilities, and prevailing market rates. Generally, the fixed fee is intended to represent a reasonable profit for the contractor's effort and risk. For IT services, this fee might range from 5% to 15% of the estimated cost, though it can fall outside this range for highly specialized or high-risk endeavors. The GSA, like other federal agencies, aims to negotiate fees that are fair and reasonable, balancing the need to attract qualified contractors with the imperative to protect taxpayer funds. The specific fee negotiated in this contract is not publicly detailed.

Industry Classification

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

Offers Received: 17

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Parent Company: Peraton Solutions Inc.

Address: 720 VANDENBERG BLVD, KING OF PRUSSIA, PA, 19406

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

Financial Breakdown

Contract Ceiling: $81,094,489

Exercised Options: $81,092,989

Current Obligation: $76,443,852

Actual Outlays: $-138,413

Subaward Activity

Number of Subawards: 45

Total Subaward Amount: $48,321,540

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: GS00Q16AJD0002

IDV Type: IDC

Timeline