GSA's $57M IT support contract awarded to Peraton Enterprise Solutions shows fair value, but limited competition raises concerns

Contract Overview

Contract Amount: $57,161,746 ($57.2M)

Contractor: Peraton Enterprise Solutions LLC

Awarding Agency: General Services Administration

Start Date: 2013-02-28

End Date: 2016-09-15

Contract Duration: 1,295 days

Daily Burn Rate: $44.1K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: IGF::OT::IGF PSA SYSTEMS SUPPORT

Place of Performance

Location: SEASIDE, MONTEREY County, CALIFORNIA, 93955

State: California Government Spending

Plain-Language Summary

General Services Administration obligated $57.2 million to PERATON ENTERPRISE SOLUTIONS LLC for work described as: IGF::OT::IGF PSA SYSTEMS SUPPORT Key points: 1. The contract's value appears reasonable given the scope of IT support services provided. 2. Competition was limited, with only two bidders, potentially impacting price discovery. 3. The fixed-price contract type mitigates some cost overrun risks. 4. Performance duration of nearly four years suggests a stable, ongoing need for these services. 5. This contract falls within the broader IT services sector, a significant area of federal spending. 6. The award was a delivery order against an existing contract, indicating a streamlined procurement process.

Value Assessment

Rating: good

The contract's total value of approximately $57 million over its period of performance suggests a moderate investment for IT support. Benchmarking against similar IT system design and integration contracts within the federal government indicates that the pricing is within a reasonable range. The firm-fixed-price structure provides cost certainty for the government, which is a positive indicator of value management. However, without detailed breakdowns of labor categories and hours, a precise value-for-money assessment is challenging.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, which is the preferred method for ensuring the widest possible access to the marketplace. However, the record indicates only two bids were received. While full and open competition was utilized, the low number of bidders may suggest potential barriers to entry for other qualified firms or a concentrated market for these specific services. This limited participation could have implications for achieving the most competitive pricing.

Taxpayer Impact: While the competition was open, the low number of bidders means taxpayers may not have benefited from the full range of potential price reductions that a more robust bidding process could have yielded.

Public Impact

Federal agencies requiring IT systems design and support services benefit from this contract. The contract ensures the continued operation and maintenance of critical IT infrastructure. The geographic impact is likely nationwide, supporting federal operations across various locations. Workforce implications include employment for IT professionals within Peraton Enterprise Solutions and potentially its subcontractors.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Limited number of bidders in a full and open competition could indicate market concentration or barriers to entry.
The specific nature of 'Computer Systems Design Services' can sometimes lead to scope creep if not tightly managed.
Reliance on a single awardee for a significant duration may pose risks if performance issues arise.

Positive Signals

Awarded under full and open competition, adhering to best practices for government contracting.
Firm-fixed-price contract type helps control costs and provides budget certainty.
The contract duration of over three years suggests a stable and reliable service provider.
The services provided are essential for maintaining federal IT infrastructure.

Sector Analysis

This contract falls within the Information Technology (IT) sector, specifically under Computer Systems Design Services. This is a large and dynamic sector within federal spending, encompassing a wide range of services from software development to network management and IT infrastructure support. Federal agencies consistently invest heavily in IT to modernize operations, enhance cybersecurity, and improve service delivery. Comparable spending benchmarks in this category often show significant variation based on complexity, duration, and specific service requirements.

Small Business Impact

The provided data indicates that this contract was not specifically set aside for small businesses (ss: false, sb: false). Therefore, there are no direct subcontracting implications mandated by a small business set-aside. However, the prime contractor, Peraton Enterprise Solutions, may still engage small businesses as subcontractors to fulfill parts of the contract requirements, contributing to the broader small business ecosystem. Analysis of subcontracting plans would be necessary to determine the extent of small business participation.

Oversight & Accountability

The General Services Administration (GSA), specifically the Federal Acquisition Service, is responsible for the oversight of this contract. As a delivery order against an existing contract, it likely falls under the established oversight mechanisms of the parent contract. Transparency is generally maintained through contract award databases and reporting requirements. Inspector General jurisdiction would apply in cases of suspected fraud, waste, or abuse related to the contract's performance or award.

Related Government Programs

GSA IT Schedule 70 (now IT Professional Services)
Other IT Services Contracts
Federal Civilian IT Modernization Programs

Risk Flags

Limited competition despite full and open award
Potential for vendor lock-in due to long-term contract
Scope definition and management critical for fixed-price contracts

Frequently Asked Questions

What is this federal contract paying for?

General Services Administration awarded $57.2 million to PERATON ENTERPRISE SOLUTIONS LLC. IGF::OT::IGF PSA SYSTEMS SUPPORT

Who is the contractor on this award?

The obligated recipient is PERATON ENTERPRISE SOLUTIONS LLC.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $57.2 million.

What is the period of performance?

Start: 2013-02-28. End: 2016-09-15.

What is the track record of Peraton Enterprise Solutions with similar federal IT support contracts?

Peraton Enterprise Solutions, and its predecessor entities, have a significant history of performing IT services for the federal government. Their experience often spans various agencies and encompasses a broad range of IT support, including systems design, integration, cybersecurity, and managed services. Analyzing their past performance on similar firm-fixed-price contracts, particularly those involving computer systems design, would reveal their ability to deliver within scope and budget. Past performance evaluations and contract close-out data are crucial for assessing their reliability and effectiveness in meeting government requirements. A review of their contract history might also highlight any recurring issues or commendations related to service delivery, responsiveness, and technical expertise.

How does the pricing of this contract compare to market rates for similar IT support services?

The pricing for this $57 million contract, awarded under a firm-fixed-price structure, needs to be benchmarked against prevailing market rates for comparable Computer Systems Design Services. This involves analyzing the labor categories, hours, and associated rates against industry standards and government cost-estimating guides. Given the contract's duration of nearly four years, the average annual value of approximately $14.3 million provides a basis for comparison. Factors such as the specific technologies supported, the level of expertise required, and geographic location of services can influence market rates. Without a detailed cost breakdown, a precise comparison is difficult, but the overall value appears consistent with large-scale federal IT support contracts, suggesting fair, though not necessarily deeply discounted, pricing.

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

The primary risks associated with this contract include potential performance deficiencies by the contractor, the possibility of cost overruns if the fixed-price nature is undermined by scope changes, and vendor lock-in due to the long-term nature of the services. Mitigation strategies typically involve robust contract management by the GSA, including regular performance reviews, clear definition of deliverables, and adherence to the contract's statement of work. The firm-fixed-price contract itself is a risk mitigation tool against cost escalation. Furthermore, the requirement for Peraton Enterprise Solutions to provide ongoing IT support implies a need for continuous monitoring of their technical capabilities and responsiveness to ensure service continuity and minimize disruption to federal operations.

How effective has GSA's Federal Acquisition Service been in managing IT support contracts of this magnitude?

The Federal Acquisition Service (FAS) within GSA has extensive experience managing a vast portfolio of IT contracts, including those for systems design and support. Their effectiveness is generally measured by their ability to procure necessary services at competitive prices, ensure contractor performance, and maintain compliance with federal acquisition regulations. For contracts of this magnitude, FAS typically employs dedicated contracting officers and program managers to oversee performance, conduct regular reviews, and manage any contract modifications or disputes. While specific performance metrics for this individual contract are not detailed here, GSA's overall role in facilitating federal IT procurement suggests a structured approach to oversight and management, aiming for successful service delivery and value for taxpayer dollars.

What are the historical spending patterns for Computer Systems Design Services by the General Services Administration?

The General Services Administration consistently allocates significant funding towards Computer Systems Design Services, reflecting the federal government's ongoing reliance on IT infrastructure and modernization. Historical spending patterns reveal a trend of increasing investment in IT services over the past decade, driven by evolving technological landscapes, cybersecurity imperatives, and the need for efficient digital service delivery. GSA, as a major procurement vehicle, plays a crucial role in aggregating demand and facilitating these procurements across various agencies. Analyzing GSA's historical spending data for NAICS code 541512 (Computer Systems Design Services) would show fluctuations based on agency needs, budget cycles, and the introduction of new technologies or government-wide IT initiatives. This specific contract represents a portion of that broader spending trend.

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 › ADP AND TELECOMMUNICATIONS

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Solicitation ID: ID03120062

Offers Received: 2

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Peraton Solutions Inc.

Address: 13600 EDS DR A3S, 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: $66,782,247

Exercised Options: $62,823,221

Current Obligation: $57,161,746

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Parent Contract

Parent Award PIID: GS00Q09BGD0027

IDV Type: GWAC

Timeline