HUD awards $620M for data center, help desk, and disaster recovery services to Peraton Enterprise Solutions

Contract Overview

Contract Amount: $620,273,205 ($620.3M)

Contractor: Peraton Enterprise Solutions LLC

Awarding Agency: Department of Housing and Urban Development

Start Date: 2005-02-01

End Date: 2016-09-20

Contract Duration: 4,249 days

Daily Burn Rate: $146.0K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: TAS::86 4585::TAS AWARD OF PORTION OF HITS SOLICITATION UNDER RFP R-OPC-21970 PURSUANT TO SETTLEMENT AGREEMENT. THE CONTRACTOR SHALL PROVIDE DATA CENTER, HELP DESK, AND DISASTER RECOVERY SERVICES.

Place of Performance

Location: WASHINGTON, DISTRICT OF COLUMBIA County, DISTRICT OF COLUMBIA, 20410

State: District of Columbia Government Spending

Plain-Language Summary

Department of Housing and Urban Development obligated $620.3 million to PERATON ENTERPRISE SOLUTIONS LLC for work described as: TAS::86 4585::TAS AWARD OF PORTION OF HITS SOLICITATION UNDER RFP R-OPC-21970 PURSUANT TO SETTLEMENT AGREEMENT. THE CONTRACTOR SHALL PROVIDE DATA CENTER, HELP DESK, AND DISASTER RECOVERY SERVICES. Key points: 1. Contract awarded under full and open competition, suggesting a robust market for these services. 2. The contract duration of over 11 years indicates a long-term need for these critical IT infrastructure services. 3. The firm-fixed-price structure aims to provide cost certainty for the government. 4. Services include data center operations, help desk support, and disaster recovery, essential for agency continuity. 5. The award value of over $620 million over its life reflects significant investment in IT modernization and support. 6. The contract was awarded by the Department of Housing and Urban Development (HUD), highlighting its reliance on these services.

Value Assessment

Rating: good

The contract value of $620.3 million over approximately 11.5 years averages to about $53.9 million annually. This figure needs to be benchmarked against similar large-scale IT infrastructure support contracts within the federal government to fully assess value for money. Without specific comparable data points for data center, help desk, and disaster recovery services of this scope and duration, a precise value assessment is challenging. However, the duration and scope suggest a significant but potentially competitive price for essential services.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, indicating that multiple vendors were likely invited to bid. This competitive process is designed to encourage a wide range of offers and potentially drive down prices. The presence of two bids suggests a moderately competitive environment for this specific requirement, which is generally favorable for price discovery and ensuring the government receives competitive offers.

Taxpayer Impact: Full and open competition generally benefits taxpayers by fostering a marketplace where providers compete on price and performance, leading to potentially lower costs and better service quality.

Public Impact

The primary beneficiaries are the employees and stakeholders of the Department of Housing and Urban Development (HUD), who will receive reliable IT support. The services delivered include critical data center operations, essential help desk support for users, and robust disaster recovery capabilities to ensure continuity of operations. The geographic impact is centered in the District of Columbia, where the services are likely managed and supported. The contract supports the IT workforce within Peraton Enterprise Solutions LLC and potentially its subcontractors, contributing to employment in the IT services sector.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Long contract duration (over 11 years) may limit flexibility to adopt newer technologies or renegotiate terms if market conditions change significantly.
Reliance on a single awardee for such critical infrastructure services could pose a risk if the contractor faces financial or operational difficulties.

Positive Signals

Awarded under full and open competition, indicating a competitive bidding process that should have yielded a fair price.
Firm-fixed-price contract type provides cost certainty for the government, reducing the risk of cost overruns.
The scope of services (data center, help desk, disaster recovery) addresses fundamental IT operational needs, suggesting a well-defined requirement.

Sector Analysis

This contract falls within the Information Technology (IT) services sector, specifically focusing on IT infrastructure management, data center operations, and support services. The federal IT services market is substantial, with agencies consistently investing in maintaining and modernizing their IT systems. Comparable spending benchmarks would typically involve analyzing other large-scale contracts for data center consolidation, cloud migration, and IT help desk support across various federal agencies to gauge the relative cost-effectiveness of this award.

Small Business Impact

The data indicates that this contract was not set aside for small businesses (ss: false, sb: false). Therefore, there are no direct small business set-aside benefits associated with this specific award. However, the prime contractor, Peraton Enterprise Solutions LLC, may engage small businesses as subcontractors to fulfill portions of the contract requirements, which would contribute to the small business ecosystem.

Oversight & Accountability

Oversight for this contract would primarily reside with the Department of Housing and Urban Development's contracting officers and program managers. They are responsible for monitoring contractor performance, ensuring compliance with contract terms, and approving payments. Transparency is facilitated through federal procurement databases like FPDS-NG, where contract awards are recorded. Inspector General jurisdiction would apply in cases of suspected fraud, waste, or abuse related to the contract.

Related Government Programs

Federal Data Center Consolidation Initiative
IT Infrastructure Modernization Programs
Government-wide IT Support Contracts
Disaster Recovery and Business Continuity Planning

Risk Flags

Long-term contract duration may limit future flexibility.
Reliance on a single vendor for critical infrastructure.
Potential for technological obsolescence over the contract life.

Frequently Asked Questions

What is this federal contract paying for?

Department of Housing and Urban Development awarded $620.3 million to PERATON ENTERPRISE SOLUTIONS LLC. TAS::86 4585::TAS AWARD OF PORTION OF HITS SOLICITATION UNDER RFP R-OPC-21970 PURSUANT TO SETTLEMENT AGREEMENT. THE CONTRACTOR SHALL PROVIDE DATA CENTER, HELP DESK, AND DISASTER RECOVERY SERVICES.

Who is the contractor on this award?

The obligated recipient is PERATON ENTERPRISE SOLUTIONS LLC.

Which agency awarded this contract?

Awarding agency: Department of Housing and Urban Development (Department of Housing and Urban Development).

What is the total obligated amount?

The obligated amount is $620.3 million.

What is the period of performance?

Start: 2005-02-01. End: 2016-09-20.

What is Peraton Enterprise Solutions LLC's track record with similar large-scale IT infrastructure contracts for federal agencies?

Peraton Enterprise Solutions LLC has a significant history of performing large-scale IT services contracts for the federal government. While specific details for this HUD contract are provided, a broader analysis would examine their performance on other contracts involving data center management, help desk support, and disaster recovery. Key indicators to review include past performance evaluations, any documented disputes or contract terminations, and their experience with similar agencies and service scopes. Understanding their broader portfolio and client satisfaction across multiple contracts would provide a more comprehensive view of their capabilities and reliability for this HUD award.

How does the average annual cost of this contract compare to similar federal IT infrastructure support contracts?

The average annual cost for this contract is approximately $53.9 million ($620.3M / 11.5 years). To benchmark this value, one would compare it against other federal contracts of similar scope (data center, help desk, disaster recovery) and duration awarded to large IT service providers. Factors such as the specific service level agreements (SLAs), geographic locations supported, and the level of technology integration would influence these comparisons. Without access to a detailed database of comparable contract costs, it's difficult to definitively state if this represents excellent, good, or fair value. However, the full and open competition suggests an effort to achieve competitive pricing.

What are the primary risks associated with a contract of this duration and scope for critical IT services?

The primary risks associated with a contract of this duration (over 11 years) and scope for critical IT services include technological obsolescence, vendor lock-in, and potential degradation of service quality over time if not actively managed. Technological advancements could render the contracted solutions outdated, requiring costly modifications or early termination. A long-term commitment can also limit the agency's flexibility to adopt more innovative or cost-effective solutions that emerge in the market. Furthermore, maintaining consistent service quality and performance from the contractor over such an extended period requires diligent oversight and performance management from the agency to mitigate risks.

How effective are the firm-fixed-price (FFP) contract type and full and open competition in ensuring program effectiveness for HUD's IT services?

The firm-fixed-price (FFP) contract type is generally effective in controlling costs for well-defined services like those outlined (data center, help desk, disaster recovery), as it shifts the risk of cost overruns to the contractor. This can enhance budget predictability for HUD. Full and open competition is effective in driving a competitive environment, encouraging contractors to offer their best performance and pricing to win the award. This process, in theory, leads to the selection of a capable contractor offering a fair price, contributing to overall program effectiveness. However, effectiveness also hinges on robust performance monitoring and contract management by HUD to ensure the contractor meets all service level agreements and objectives.

What are the historical spending patterns for data center, help desk, and disaster recovery services at HUD?

Historical spending patterns for these services at HUD would reveal trends in IT infrastructure investment. Analyzing past contracts for data center operations, help desk support, and disaster recovery would indicate whether spending has been consistent, increasing, or decreasing. It would also show the number of vendors HUD has historically relied upon and the types of contract vehicles used. Understanding these patterns helps contextualize the current $620 million award, assessing if it represents a significant shift in strategy, an increase in demand, or a consolidation of previous spending. Without specific historical data, it's presumed this award reflects ongoing, substantial needs for these critical IT functions.

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: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Offers Received: 2

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Hewlett Packard Enterprise CO (UEI: 079834910)

Address: 13600 EDS DR, HERNDON, VA, 20171

Business Categories: Category Business, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $620,524,908

Exercised Options: $620,524,908

Current Obligation: $620,273,205

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline