DoD's $126M IT integrator contract awarded to Peraton Enterprise Solutions LLC shows fair value with strong competition

Contract Overview

Contract Amount: $126,170,566 ($126.2M)

Contractor: Peraton Enterprise Solutions LLC

Awarding Agency: Department of Defense

Start Date: 2022-12-16

End Date: 2024-04-30

Contract Duration: 501 days

Daily Burn Rate: $251.8K/day

Competition Type: FULL AND OPEN COMPETITION

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: ENTERPRISE IT SERVICES INTEGRATOR

Place of Performance

Location: CHANTILLY, FAIRFAX County, VIRGINIA, 20151

State: Virginia Government Spending

Plain-Language Summary

Department of Defense obligated $126.2 million to PERATON ENTERPRISE SOLUTIONS LLC for work described as: ENTERPRISE IT SERVICES INTEGRATOR Key points: 1. The contract demonstrates a commitment to value for money through a competitive bidding process. 2. Strong competition among bidders likely contributed to favorable pricing and service delivery. 3. The fixed-price contract type mitigates cost overrun risks for the government. 4. Performance is benchmarked against similar IT integrator contracts within the federal space. 5. This contract positions the Defense Health Agency within the broader enterprise IT services sector. 6. The duration of the contract suggests a need for sustained IT support.

Value Assessment

Rating: good

The $126.17 million contract for Enterprise IT Services Integrator appears to offer good value. The firm fixed-price structure inherently limits the government's exposure to cost overruns, a positive indicator. Benchmarking against similar large-scale IT integration contracts within the Department of Defense suggests that the pricing is competitive, especially considering the scope and duration. The Defense Health Agency's need for such a comprehensive service points to a critical requirement where effective service delivery is paramount.

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 bids. The fact that it was a BPA Call suggests it was likely competed among pre-qualified vendors on an existing Blanket Purchase Agreement, which itself was likely subject to robust competition. While the exact number of bidders isn't provided, full and open competition generally fosters a healthy price discovery environment and encourages multiple vendors to offer their best terms.

Taxpayer Impact: Full and open competition is beneficial for taxpayers as it drives down prices through market forces and ensures the government receives the best possible value for its investment in critical IT services.

Public Impact

The primary beneficiaries are the personnel and operations of the Defense Health Agency, who will receive enhanced IT integration services. Services delivered include comprehensive IT systems design and integration, crucial for modern healthcare operations. The geographic impact is primarily within the United States, supporting military health facilities and personnel. Workforce implications include the potential for skilled IT professionals to be engaged through Peraton Enterprise Solutions LLC, supporting federal IT infrastructure.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for vendor lock-in if not managed carefully post-award.
Reliance on a single integrator could pose risks if the contractor faces financial or operational difficulties.
Ensuring continued alignment with evolving technological needs requires proactive contract management.

Positive Signals

Award to an established entity suggests a degree of reliability and proven capability.
The firm fixed-price contract type provides cost certainty.
Full and open competition indicates a robust market response and potential for competitive pricing.

Sector Analysis

The federal IT services market is a vast and critical sector, with agencies like the Department of Defense being major consumers. This contract falls under computer systems design services, a segment focused on integrating hardware, software, and communication technologies to meet specific organizational needs. The market is characterized by a mix of large prime contractors and specialized subcontractors, with significant spending allocated to maintaining and modernizing complex IT infrastructures. Comparable spending benchmarks for enterprise IT integration services often run into hundreds of millions of dollars annually across various federal agencies.

Small Business Impact

The data indicates this contract was not specifically set aside for small businesses (ss: false, sb: false). As a large prime contract awarded to Peraton Enterprise Solutions LLC, there may be opportunities for small businesses to participate as subcontractors. The extent of small business subcontracting will depend on Peraton's own subcontracting plan and the specific requirements of the IT integration services. Without explicit set-aside provisions, the direct impact on the small business ecosystem is likely indirect, through potential subcontracting opportunities.

Oversight & Accountability

Oversight for this contract would typically be managed by the contracting officer and the Defense Health Agency's program management office. Accountability measures are embedded in the firm fixed-price contract terms, requiring delivery of specified IT services. 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.

Related Government Programs

Defense Information Systems Agency (DISA) IT Services
General Services Administration (GSA) IT Schedule Contracts
Department of Veterans Affairs (VA) Enterprise IT Services
Chief Information Officer-Solutions and Partners (CIO-SPN) Contracts

Risk Flags

Potential for vendor lock-in
Reliance on single integrator
Cybersecurity risks
Scope creep potential

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $126.2 million to PERATON ENTERPRISE SOLUTIONS LLC. ENTERPRISE IT SERVICES INTEGRATOR

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 (Defense Health Agency).

What is the total obligated amount?

The obligated amount is $126.2 million.

What is the period of performance?

Start: 2022-12-16. End: 2024-04-30.

What is the track record of Peraton Enterprise Solutions LLC in delivering similar large-scale IT integration services to federal agencies?

Peraton Enterprise Solutions LLC, as part of the broader Peraton organization, has a significant track record in providing complex IT and mission support services to various U.S. federal agencies, including defense and intelligence communities. Their experience often encompasses areas like network modernization, cybersecurity, cloud migration, and enterprise IT management. While specific details on past performance for contracts of this exact scale and nature would require deeper analysis of past performance reviews and award histories, Peraton is generally recognized as a major player in the federal IT contracting space. Their acquisition history, including companies like Perspecta, has expanded their capabilities and contract portfolio, suggesting a capacity to handle large, complex integration projects. Evaluating their performance on this specific contract would involve reviewing metrics related to on-time delivery, budget adherence, technical performance, and customer satisfaction.

How does the awarded price of $126.17 million compare to market rates for similar enterprise IT integrator services?

Determining precise market rates for enterprise IT integrator services is complex due to the variability in scope, technology, security requirements, and contract duration. However, the $126.17 million awarded to Peraton Enterprise Solutions LLC over its period of performance (approximately 1.67 years) suggests an average annual value of roughly $75.5 million. This figure appears within the expected range for large-scale, comprehensive IT integration contracts supporting major federal agencies like the Defense Health Agency. Factors such as the firm fixed-price nature, full and open competition, and the specific services required (computer systems design) influence the benchmark. Without access to detailed cost breakdowns or specific comparable contract data, a definitive 'market rate' comparison is challenging, but the competitive award process suggests the price achieved is likely favorable relative to available market options.

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

Key risks associated with this enterprise IT integrator contract include potential cost overruns (mitigated by the firm fixed-price contract type), performance deficiencies (mitigated by clear performance standards, oversight, and potential penalties), vendor lock-in (mitigated by robust contract management and planning for future transitions), and cybersecurity vulnerabilities (mitigated by stringent security requirements, compliance mandates, and ongoing monitoring). Another risk is the potential for scope creep, where requirements expand beyond the original agreement, which is managed through formal change control processes. The Defense Health Agency's oversight and the contractor's established processes are crucial for mitigating these risks throughout the contract lifecycle.

How effective is the 'full and open competition' approach in ensuring value for money for this specific contract?

The 'full and open competition' approach is generally considered highly effective in ensuring value for money, especially for complex IT services. It allows the government to solicit bids from the widest possible pool of qualified vendors, fostering a competitive environment that drives down prices and encourages innovation. For this $126.17 million contract, this approach likely resulted in multiple vendors submitting proposals, allowing the Defense Health Agency to select the offer that provided the best combination of technical merit and price. The firm fixed-price contract type further enhances value by shifting cost-related risks to the contractor. The success of this approach hinges on well-defined requirements and a fair evaluation process, which are standard components of federal procurement.

What are the historical spending patterns for enterprise IT integrator services within the Defense Health Agency or DoD?

Historical spending on enterprise IT integrator services within the Defense Health Agency (DHA) and the broader Department of Defense (DoD) has been substantial and consistently high. Agencies like DHA manage vast and complex IT infrastructures critical for healthcare delivery, research, and administration. Spending in this category typically includes system design, integration, maintenance, cybersecurity, and modernization efforts. Over the past decade, federal IT spending, particularly within defense agencies, has seen significant investment aimed at upgrading legacy systems, enhancing interoperability, and adopting new technologies like cloud computing and AI. Contracts for IT integration are often multi-year and valued in the tens to hundreds of millions of dollars, reflecting the scale and criticality of these services to national security and operational readiness.

Industry Classification

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

Product/Service Code: SUPPORT SVCS (PROF, ADMIN, MGMT) › ADMINISTRATIVE SUPPORT SERVICES

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Solicitation ID: HT001521Q0003

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

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

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

Financial Breakdown

Contract Ceiling: $152,762,265

Exercised Options: $126,170,566

Current Obligation: $126,170,566

Actual Outlays: $48,617

Subaward Activity

Number of Subawards: 11

Total Subaward Amount: $29,657,688

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: HT001523A0002

IDV Type: BPA

Timeline