DoD's $84M IT services contract awarded to Peraton Enterprise Solutions, a sole-source delivery order

Contract Overview

Contract Amount: $84,093,672 ($84.1M)

Contractor: Peraton Enterprise Solutions LLC

Awarding Agency: Department of Defense

Start Date: 2010-09-30

End Date: 2011-09-29

Contract Duration: 364 days

Daily Burn Rate: $231.0K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: OTHER ADP AND TELECOMMUNICATION SVS

Place of Performance

Location: QUANTICO, PRINCE WILLIAM County, VIRGINIA, 22134

State: Virginia Government Spending

Plain-Language Summary

Department of Defense obligated $84.1 million to PERATON ENTERPRISE SOLUTIONS LLC for work described as: OTHER ADP AND TELECOMMUNICATION SVS Key points: 1. The contract represents a significant investment in IT and telecommunication services for the Department of the Navy. 2. Awarded as a sole-source delivery order, it bypasses standard competitive procurement processes. 3. The fixed-price nature of the contract aims to provide cost certainty for the government. 4. The duration of the contract was one year, suggesting a need for immediate or short-term support. 5. The specific NAICS code (541519) indicates a focus on 'Other Computer Related Services'. 6. The contract was awarded to Peraton Enterprise Solutions LLC, a known entity in the federal contracting space. 7. The value of the contract is substantial, reflecting the critical nature of the IT services procured.

Value Assessment

Rating: questionable

Benchmarking the value of this $84 million contract is challenging without detailed service descriptions and performance metrics. As a sole-source award, there was no direct price competition to establish a fair market price. However, the contract's fixed-price nature suggests an attempt to control costs. Without comparative data on similar 'Other Computer Related Services' contracts or specific performance outcomes, a definitive value-for-money assessment is difficult. The absence of competition raises concerns about whether the government secured the best possible price.

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 goods or services, often due to proprietary technology, urgent needs, or existing infrastructure dependencies. The lack of competition means that the government did not benefit from the price discovery and innovation that typically arise from a competitive bidding process.

Taxpayer Impact: Sole-source awards can potentially lead to higher costs for taxpayers as there is no competitive pressure to drive down prices. It also limits opportunities for other qualified businesses to secure government contracts.

Public Impact

The primary beneficiary is the Department of the Navy, which receives essential IT and telecommunication services. The services delivered likely support critical naval operations, data management, and communication infrastructure. The geographic impact is centered around the Navy's operational areas, potentially worldwide. The contract supports the workforce employed by Peraton Enterprise Solutions LLC, contributing to employment in the IT services sector.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition may have resulted in a higher price than a competed contract.
Sole-source awards can reduce transparency and accountability in the procurement process.
Limited insight into the specific services rendered and their effectiveness due to the nature of the award.
Potential for vendor lock-in if services are highly specialized or integrated.

Positive Signals

The contract was awarded to a single, established vendor, potentially ensuring continuity of service.
The firm fixed-price contract type provides cost certainty for the government.
The contract duration of one year suggests a defined scope and timeline for service delivery.

Sector Analysis

This contract falls within the Information Technology (IT) and Telecommunications sector, a critical area for government operations. The market for IT services is vast and highly competitive, with numerous large and small businesses offering a wide range of solutions. Federal spending in this sector is consistently high, reflecting the increasing reliance on technology for defense, administration, and public services. Comparable spending benchmarks would typically involve analyzing other large IT service contracts awarded by defense agencies for similar scope and duration.

Small Business Impact

This contract was not set aside for small businesses, nor does it appear to have specific subcontracting requirements for small businesses indicated in the provided data. The award to a single, likely larger, entity suggests that opportunities for small business participation through subcontracting may be limited unless explicitly mandated by the prime contractor. This could represent a missed opportunity to leverage the small business industrial base for specialized IT services.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of the Navy's contracting and program management offices. Accountability measures would be defined by the contract's terms and conditions, including performance standards and payment schedules. Transparency is limited due to the sole-source nature of the award. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

Department of Defense IT Services
Navy IT Modernization Programs
Telecommunications Infrastructure Contracts
Other Computer Related Services Contracts

Risk Flags

Sole-source award bypasses competitive process.
Lack of detailed service description hinders performance assessment.
Potential for uncompetitive pricing due to lack of competition.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $84.1 million to PERATON ENTERPRISE SOLUTIONS LLC. OTHER ADP AND TELECOMMUNICATION 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 $84.1 million.

What is the period of performance?

Start: 2010-09-30. End: 2011-09-29.

What specific 'Other Computer Related Services' were provided under this contract?

The provided data does not detail the specific 'Other Computer Related Services' rendered under this $84 million contract. The NAICS code 541519 is broad and can encompass a wide array of IT support, including IT consulting, systems integration design, computer facilities management, and disaster recovery services. Without a detailed statement of work or contract award justification, it is impossible to ascertain the precise nature of the services. This lack of specificity makes it difficult to assess the contract's effectiveness or compare its value to other IT service procurements.

Why was this contract awarded on a sole-source basis instead of being competed?

The data indicates this contract was awarded on a sole-source basis ('CT': 'NOT COMPETED'). Sole-source awards are typically justified when only one responsible source can provide the required supplies or services. Common reasons include proprietary technology, urgent and compelling needs where competition is not feasible, or when a follow-on contract is awarded to the incumbent under specific regulatory exceptions. The specific justification for this award is not provided, but it implies that the Department of the Navy determined that Peraton Enterprise Solutions LLC was the only viable option at the time of award, potentially due to existing infrastructure, specialized knowledge, or unique capabilities.

How does the $84 million value compare to similar IT service contracts for the Navy?

Comparing the $84 million value requires context regarding the contract's duration and scope. This was a one-year contract (364 days). While $84 million is a substantial sum, the average annual spending on IT services by the Department of the Navy can range significantly based on modernization efforts, operational needs, and specific system procurements. Without knowing the exact services provided, it's difficult to make a direct comparison. However, for a single-award, one-year contract focused on 'Other Computer Related Services,' this value suggests a significant scope of work, potentially encompassing enterprise-wide support or critical system maintenance.

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

Peraton Enterprise Solutions LLC has a significant track record as a federal contractor, particularly within the Department of Defense and other intelligence agencies. They are known for providing a range of IT, mission support, and cybersecurity services. Their history includes numerous contract awards across various agencies, often in complex and high-security environments. While this specific contract was a sole-source delivery order, Peraton's broader portfolio indicates experience in managing large-scale federal IT programs. A deeper analysis would involve reviewing their past performance evaluations and contract history for potential red flags or consistent successes.

What are the potential risks associated with a sole-source IT services contract of this magnitude?

The primary risk associated with a sole-source IT services contract of this magnitude is the potential for inflated costs due to the lack of competitive bidding. Without market pressure, the contractor may not be incentivized to offer the most competitive pricing. Another risk is vendor lock-in, where the government becomes heavily reliant on a single provider, making future transitions difficult and potentially costly. Furthermore, the absence of competition can sometimes lead to complacency in service delivery or innovation. Ensuring robust oversight and performance management becomes even more critical in sole-source situations to mitigate these risks.

What does the 'firm fixed price' contract type imply for cost control and risk allocation?

The 'firm fixed price' (FFP) contract type implies that the contractor, Peraton Enterprise Solutions LLC, agreed to a set price for the defined scope of work, regardless of their actual costs incurred. This shifts the cost risk primarily to the contractor. For the government, it provides significant cost certainty, as the total expenditure is known upfront. This structure is generally preferred when the scope of work is well-defined and the risks of cost overruns are manageable. It incentivizes the contractor to control costs efficiently to maximize their profit margin.

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: $84,093,672

Exercised Options: $84,093,672

Current Obligation: $84,093,672

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: YES

Parent Contract

Parent Award PIID: N0003910D0010

IDV Type: IDC

Timeline