DoD's $144.8M IT Services Contract Awarded to Peraton Enterprise Solutions LLC Shows Limited Competition

Contract Overview

Contract Amount: $144,821,755 ($144.8M)

Contractor: Peraton Enterprise Solutions LLC

Awarding Agency: Department of Defense

Start Date: 2012-02-29

End Date: 2012-09-30

Contract Duration: 214 days

Daily Burn Rate: $676.7K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: OTHER ADP AND TELECOMMUNICATIONS SVS

Place of Performance

Location: HERNDON, FAIRFAX County, VIRGINIA, 20171

State: Virginia Government Spending

Plain-Language Summary

Department of Defense obligated $144.8 million to PERATON ENTERPRISE SOLUTIONS LLC for work described as: OTHER ADP AND TELECOMMUNICATIONS SVS Key points: 1. Contract value of $144.8 million for IT services represents a significant investment. 2. Awarded via a sole-source mechanism, raising questions about potential cost efficiencies. 3. Limited competition may indicate a lack of market alternatives or specific contractor capabilities. 4. The contract duration of 214 days suggests a short-term or project-specific need. 5. Fixed-price contract type aims to control costs, but price reasonableness needs scrutiny given the procurement method. 6. Performance is located in Virginia, a hub for federal contracting and IT services. 7. The North American Industry Classification System (NAICS) code 541519 points to 'Other Computer Related Services'.

Value Assessment

Rating: questionable

Benchmarking the value of this $144.8 million contract is challenging due to its sole-source nature and the lack of publicly available comparative data for similar, recently awarded sole-source IT services contracts. Without competitive bids, it's difficult to assess if the pricing reflects fair market value or if there were opportunities for cost savings through a more open competition. The fixed-price structure provides some cost certainty, but the absence of competitive pressure means the government may not have secured the most economical terms.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded using a sole-source procurement strategy, meaning only one vendor, Peraton Enterprise Solutions LLC, was solicited. This approach is typically used when only one source is capable of meeting the government's needs, often due to proprietary technology, unique capabilities, or urgent requirements. The lack of competition means that the government did not benefit from the price discovery and potential cost reductions that typically arise from multiple bidders vying for a contract.

Taxpayer Impact: Taxpayers may have paid a premium for these services due to the absence of competitive bidding. Without competing offers, there is a reduced incentive for the contractor to offer the lowest possible price, potentially leading to less efficient use of federal funds.

Public Impact

The Department of the Navy benefits from essential IT services, ensuring operational continuity and support. This contract supports the technological infrastructure and operational needs of the U.S. Navy. The services are delivered within Virginia, potentially impacting the local IT workforce and economy. Federal employees and military personnel are the primary users of the IT services provided.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits price competition, potentially leading to higher costs for taxpayers.
Lack of transparency in the sole-source justification makes it difficult to assess necessity and value.
Limited contract duration (214 days) may indicate a stop-gap measure rather than a strategic long-term solution.

Positive Signals

Fixed-price contract type helps to define and control costs for the government.
Award to an established entity (Peraton) may suggest a known capability to meet requirements.
The contract addresses specific IT and telecommunications needs for the Department of Defense.

Sector Analysis

This contract falls within the Information Technology (IT) and Telecommunications services sector, a critical area for federal agencies. The market for IT services is vast and highly competitive, with numerous firms offering a wide range of solutions. However, specific, specialized IT support, especially for defense applications, can sometimes lead to sole-source or limited-competition awards. Benchmarking this contract's value is difficult without more specific details on the services rendered, but IT services represent a substantial portion of federal IT spending.

Small Business Impact

Information regarding small business set-asides or subcontracting plans for this specific contract is not detailed in the provided data. As a sole-source award, it is less likely to have been specifically set aside for small businesses. Further investigation would be needed to determine if Peraton Enterprise Solutions LLC has any subcontracting obligations to small businesses under this award, which could impact the small business ecosystem.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of the Navy's contracting and program management offices. The Inspector General's office for the Department of Defense may also conduct audits or investigations into contract spending and performance. Transparency is limited due to the sole-source nature, making public oversight more challenging. Accountability would be measured through contract performance metrics and adherence to the fixed-price terms.

Related Government Programs

Department of Defense IT Services
Navy IT Support Contracts
Other Computer Related Services
Federal Telecommunications Services

Risk Flags

Sole-source award raises concerns about price competition and value for money.
Lack of detailed service description hinders comprehensive analysis.
Short contract duration may indicate a temporary solution or require follow-on actions.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $144.8 million to PERATON ENTERPRISE SOLUTIONS LLC. OTHER ADP AND TELECOMMUNICATIONS SVS

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 (Department of the Navy).

What is the total obligated amount?

The obligated amount is $144.8 million.

What is the period of performance?

Start: 2012-02-29. End: 2012-09-30.

What specific IT and telecommunications services were procured under this contract?

The provided data indicates the contract falls under NAICS code 541519, 'Other Computer Related Services,' and the description is 'OTHER ADP AND TELECOMMUNICATIONS SVS.' This suggests a broad range of services related to automated data processing (ADP) and telecommunications. Examples could include network management, system integration, IT support, hardware/software maintenance, cybersecurity services, or telecommunications infrastructure support. Without a detailed statement of work (SOW), the precise nature and scope of services remain unspecified, making it difficult to fully assess the contract's purpose and value.

Why was this contract awarded on a sole-source basis?

The justification for a sole-source award is not provided in the data. Typically, sole-source contracts are justified under specific circumstances outlined in federal acquisition regulations, such as when only one responsible source is available, or when there is a compelling urgency. Reasons could include unique proprietary technology, specialized expertise possessed by Peraton Enterprise Solutions LLC, or a critical need that could not be met through competitive means within the required timeframe. A formal justification document (e.g., a Justification and Approval - J&A) would normally be required and publicly accessible for such awards.

How does the $144.8 million contract value compare to similar IT services contracts awarded by the Department of the Navy?

Comparing this $144.8 million contract value requires context on the duration and scope of services. As a sole-source award with a duration of 214 days (approximately 7 months), this represents a significant monthly expenditure. To benchmark effectively, one would need to identify comparable sole-source or limited-competition IT services contracts awarded by the Navy or other DoD components for similar types of services (e.g., network operations, system support) over similar timeframes. Without such comparisons, it's difficult to definitively state whether the price is high or low relative to the market, especially given the lack of competitive pricing pressure.

What is Peraton Enterprise Solutions LLC's track record with the Department of Defense?

Peraton Enterprise Solutions LLC, and its parent company Peraton, have a significant history of contracting with the Department of Defense and other federal agencies. They are known providers of IT, mission support, and cybersecurity services. Their track record generally includes large-scale contracts supporting various defense and intelligence missions. However, the specific performance history, quality of service, and past issues (if any) related to Peraton Enterprise Solutions LLC on contracts similar to this one would require a deeper dive into contract performance databases and agency records.

What are the potential risks associated with a sole-source award of this magnitude?

The primary risks associated with a sole-source award of $144.8 million include potential overpayment due to lack of price competition, reduced incentive for the contractor to innovate or provide exceptional service, and the risk of vendor lock-in if the services are critical and difficult to transition. There's also a risk that the government may not be aware of or able to access more cost-effective solutions available in the broader market. Furthermore, sole-source awards can sometimes face greater scrutiny regarding fairness and adherence to procurement regulations.

What is the typical duration and value for 'Other Computer Related Services' contracts within the DoD?

The typical duration and value for 'Other Computer Related Services' (NAICS 541519) contracts within the DoD can vary widely. Contracts can range from short-term, project-specific engagements lasting a few months to multi-year, large-scale support agreements worth hundreds of millions or even billions of dollars. This specific contract, valued at $144.8 million over 214 days, appears to be a substantial, medium-term engagement. Without more granular data on the specific services and market trends for this NAICS code within DoD, it's hard to definitively categorize its duration and value against a broad average.

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: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: HP, Inc.

Address: 13600 EDS DR, 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: $144,821,758

Exercised Options: $144,821,758

Current Obligation: $144,821,755

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: YES

Parent Contract

Parent Award PIID: N0003910D0010

IDV Type: IDC

Timeline