DHS awards $47.3M for computing infrastructure, data processing, and web hosting services to Peraton Enterprise Solutions

Contract Overview

Contract Amount: $47,317,892 ($47.3M)

Contractor: Peraton Enterprise Solutions LLC

Awarding Agency: Department of Homeland Security

Start Date: 2017-06-28

End Date: 2019-06-26

Contract Duration: 728 days

Daily Burn Rate: $65.0K/day

Competition Type: NOT COMPETED

Pricing Type: TIME AND MATERIALS

Sector: Other

Official Description: IGF::OT::IGF THE PURPOSE OF THIS TASK ORDER IS TO PROCURE HP ENTERPRISE SERVICES (DC2) THAT SUPPORTS THE ENTERPRISE SERVICES DIVISION.

Place of Performance

Location: HERNDON, FAIRFAX County, VIRGINIA, 20171

State: Virginia Government Spending

Plain-Language Summary

Department of Homeland Security obligated $47.3 million to PERATON ENTERPRISE SOLUTIONS LLC for work described as: IGF::OT::IGF THE PURPOSE OF THIS TASK ORDER IS TO PROCURE HP ENTERPRISE SERVICES (DC2) THAT SUPPORTS THE ENTERPRISE SERVICES DIVISION. Key points: 1. Contract awarded on a sole-source basis, raising questions about potential price overruns and limited market exploration. 2. The contract's duration of 728 days suggests a need for sustained support in critical IT infrastructure. 3. Focus on computing infrastructure and data processing indicates a reliance on established service providers for core functions. 4. The 'Time and Materials' pricing structure can lead to cost unpredictability if not closely managed. 5. The absence of small business set-asides warrants scrutiny regarding opportunities for smaller, innovative firms. 6. The contract's value is moderate within the broader IT services sector, but its sole-source nature is a key risk indicator.

Value Assessment

Rating: fair

The contract's value of $47.3 million for computing infrastructure and data processing services is difficult to benchmark without more detailed service descriptions and comparable contract data. The 'Time and Materials' pricing model, while flexible, carries inherent risks of cost escalation if not rigorously monitored. The lack of competition means there's no direct market comparison to assess if the pricing is optimal. However, the provider, Peraton Enterprise Solutions, is a known entity in the federal IT space, suggesting some level of established capability.

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 services, often due to proprietary technology, existing infrastructure integration, or urgent needs. The lack of competition limits the government's ability to leverage market forces to secure the best possible pricing and terms.

Taxpayer Impact: Sole-source awards mean taxpayers may not benefit from competitive pricing, potentially leading to higher costs than if multiple bids were solicited.

Public Impact

The Department of Homeland Security (DHS) benefits from sustained IT infrastructure support, ensuring the continuity of its operations. Services delivered include computing infrastructure, data processing, and web hosting, which are critical for modern government functions. The primary geographic impact is likely within Virginia, where the contract is registered, but the services support national-level DHS operations. The contract supports the workforce involved in managing and maintaining these essential IT services.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competitive pricing and potentially increases costs for taxpayers.
Time and Materials contract type can lead to cost overruns if not managed effectively.
Lack of small business participation may limit opportunities for smaller, innovative firms in the federal IT market.

Positive Signals

Contract supports critical IT infrastructure for a major federal agency (DHS).
Peraton Enterprise Solutions is an established provider in the federal IT services sector.
The contract duration suggests a stable, long-term need for these services.

Sector Analysis

The contract falls within the broader IT services sector, specifically focusing on computing infrastructure, data processing, and web hosting. This is a mature market with numerous providers, ranging from large system integrators to specialized cloud service providers. The total federal spending on IT services is in the hundreds of billions annually. This contract represents a moderate investment within this vast sector, but its sole-source nature is a notable characteristic in a market that often benefits from robust competition.

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. The sole-source nature further limits the potential for small business involvement. This could mean missed opportunities for small businesses to contribute to critical federal IT infrastructure and for the government to leverage their agility and innovation.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of Homeland Security's contracting and program management offices. Given it's a task order under a larger contract, oversight might also involve the contracting agency that originally awarded the parent contract. Transparency is limited due to the sole-source award and the 'Time and Materials' structure, which requires diligent monitoring to control costs. Inspector General jurisdiction would apply if any fraud, waste, or abuse is suspected.

Related Government Programs

DHS IT Modernization Initiatives
Federal Cloud Computing Strategy
Enterprise IT Operations Support Contracts
Data Center Consolidation Programs

Risk Flags

Sole Source Award
Time and Materials Pricing
Lack of Small Business Participation

Frequently Asked Questions

What is this federal contract paying for?

Department of Homeland Security awarded $47.3 million to PERATON ENTERPRISE SOLUTIONS LLC. IGF::OT::IGF THE PURPOSE OF THIS TASK ORDER IS TO PROCURE HP ENTERPRISE SERVICES (DC2) THAT SUPPORTS THE ENTERPRISE SERVICES DIVISION.

Who is the contractor on this award?

The obligated recipient is PERATON ENTERPRISE SOLUTIONS LLC.

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 $47.3 million.

What is the period of performance?

Start: 2017-06-28. End: 2019-06-26.

What is the track record of Peraton Enterprise Solutions with the Department of Homeland Security and similar federal agencies?

Peraton Enterprise Solutions, and its predecessor entities, have a history of performing IT services for various federal agencies, including DHS. Their experience often spans areas like enterprise IT operations, cybersecurity, and mission support. For DHS specifically, Peraton has been involved in contracts related to IT infrastructure, network services, and data management. While specific performance metrics for this particular task order are not detailed here, Peraton is generally recognized as a significant player in the federal IT contracting landscape. Their track record typically involves managing complex IT environments and delivering services under various contract types, including those requiring significant technical expertise and security clearances. Further analysis would require examining past performance evaluations and any documented issues or commendations on prior DHS or similar agency contracts.

How does the $47.3 million value compare to similar computing infrastructure and data processing contracts awarded by DHS or other agencies?

The $47.3 million value for a two-year contract (728 days) for computing infrastructure, data processing, and web hosting is within a moderate range for federal IT services. However, direct comparisons are challenging due to the sole-source nature and the 'Time and Materials' (T&M) pricing structure. T&M contracts can vary significantly in total cost based on actual labor hours and material usage. In a competitive bidding environment for similar services, agencies might see a range of proposals. For instance, contracts for cloud hosting or managed data center services can range from a few million to hundreds of millions of dollars depending on scale, scope, and duration. The lack of competition here means we cannot definitively say if this price is high or low relative to what could have been achieved through a full and open competition. Benchmarking would ideally involve looking at other sole-source T&M awards for comparable IT infrastructure support.

What are the primary risks associated with a sole-source 'Time and Materials' contract for critical IT infrastructure?

The primary risks associated with a sole-source 'Time and Materials' (T&M) contract for critical IT infrastructure are twofold. Firstly, the sole-source nature eliminates competitive pressure, which can lead to inflated pricing and reduced incentive for the contractor to optimize costs or innovate. The government cannot leverage market dynamics to secure the best value. Secondly, the T&M pricing model, while offering flexibility, lacks a fixed ceiling on costs. If not rigorously managed and monitored, it can result in significant cost overruns as labor hours and material expenses accumulate. For critical IT infrastructure, this means potential budget unpredictability and the risk of paying more than necessary for essential services, impacting the overall value for taxpayers.

What does the 'Computing Infrastructure Providers, Data Processing, Web Hosting, and Related Services' NAICS code suggest about the nature of this contract?

The North American Industry Classification System (NAICS) code 518210, 'Computing Infrastructure Providers, Data Processing, Web Hosting, and Related Services,' indicates that this contract is for services related to the provision and management of IT infrastructure. This typically includes services such as providing access to computing facilities (servers, storage), processing data for clients, hosting websites and applications, and offering related support services like network management, security, and technical assistance. For the Department of Homeland Security (DHS), these services are fundamental to maintaining its operational capabilities, managing vast amounts of data, and ensuring the availability of its digital services and platforms. It suggests a reliance on external expertise or resources for core IT functions.

Are there any indications of potential cost savings or efficiencies achieved through this contract, despite its sole-source nature?

The provided data does not offer direct indications of cost savings or efficiencies achieved through this specific contract. The sole-source award and 'Time and Materials' (T&M) pricing structure inherently present challenges in demonstrating cost-effectiveness compared to a competitively bid fixed-price contract. However, potential efficiencies might be realized if Peraton Enterprise Solutions possesses highly specialized knowledge or existing infrastructure that integrates seamlessly with DHS systems, thereby avoiding costly setup or transition periods. The contract's duration (728 days) suggests a need for continuity, implying that stability and uninterrupted service might be prioritized over aggressive cost reduction strategies in the short term. Rigorous oversight, performance metrics, and potentially negotiated labor rates within the T&M framework would be crucial for maximizing value and controlling costs.

What is the significance of the contract being a 'Delivery Order' (aw) rather than a new contract?

The designation 'Delivery Order' (aw) signifies that this contract is not a standalone, newly awarded contract but rather a specific order placed against a pre-existing, larger contract vehicle, often referred to as an 'Indefinite Delivery/Indefinite Quantity' (IDIQ) contract or a similar master agreement. This means that the foundational terms, conditions, and potentially some pricing structures were established when the parent contract was awarded, likely through a competitive process. A delivery order then specifies the quantity, delivery schedule, and sometimes specific pricing for a particular requirement. This approach allows agencies to procure goods or services more efficiently once the overarching contract is in place, streamlining the acquisition process for individual needs like this one for IT 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 › ADP AND TELECOMMUNICATIONS

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Solicitation ID: HSHQDC-17-Q-00265

Pricing Type: TIME AND MATERIALS (Y)

Evaluated Preference: NONE

Contractor Details

Parent Company: Veritas Capital Fund Management, L.L.C.

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: $74,353,482

Exercised Options: $49,034,543

Current Obligation: $47,317,892

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: HSHQDC15D00015

IDV Type: IDC

Timeline