DoD's $38.8M IT Services Contract Awarded to Peraton Enterprise Solutions LLC Under Sole Source Basis

Contract Overview

Contract Amount: $38,826,120 ($38.8M)

Contractor: Peraton Enterprise Solutions LLC

Awarding Agency: Department of Defense

Start Date: 2010-12-25

End Date: 2011-12-24

Contract Duration: 364 days

Daily Burn Rate: $106.7K/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 $38.8 million to PERATON ENTERPRISE SOLUTIONS LLC for work described as: OTHER ADP AND TELECOMMUNICATION SVS Key points: 1. Contract awarded on a sole-source basis, limiting potential cost savings from competition. 2. The contract value of $38.8 million for IT services warrants scrutiny of pricing and performance. 3. A single award for IT services may indicate limited market availability or specific contractor capabilities. 4. The fixed-price contract type shifts performance risk to the contractor. 5. The contract duration of one year suggests a need for ongoing IT support. 6. The 'Other Computer Related Services' NAICS code covers a broad range of IT functions.

Value Assessment

Rating: fair

The contract value of $38.8 million for one year of IT services appears substantial. Without specific benchmarks for 'Other Computer Related Services' within the Department of Defense, it is difficult to definitively assess value for money. The sole-source nature of the award also raises questions about whether competitive pricing was achieved. Further analysis would require comparing this contract's per-unit costs or service rates to similar sole-source or competitively awarded contracts for comparable IT services within the DoD or other federal agencies.

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, or in cases of urgent need. The lack of competition means that the government did not benefit from the price discovery and potential cost reductions that typically occur in a competitive bidding process. This can lead to higher prices than might be achieved in an open market.

Taxpayer Impact: Taxpayers may have paid a premium for these IT services due to the absence of competitive pressure. The government did not have the opportunity to solicit and evaluate multiple offers, which could have resulted in lower costs.

Public Impact

The Department of the Navy benefits from the provision of essential IT services. This contract supports the operational readiness and technological infrastructure of the Navy. The services delivered likely encompass a range of computer-related functions critical to military operations. The geographic impact is primarily within the Department of the Navy's operational footprint. Workforce implications may include the utilization of Peraton's personnel for IT support.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competitive pricing and potential cost savings for taxpayers.
Lack of transparency in the justification for sole-source award.
Potential for overpayment due to absence of competitive bidding.
Broad NAICS code may obscure specific service costs and performance metrics.
Contract value is significant, requiring robust performance monitoring.

Positive Signals

Firm fixed-price contract shifts performance risk to the contractor.
Contract awarded to an established entity, Peraton Enterprise Solutions LLC.
The contract addresses a specific need for IT services within the Department of Defense.

Sector Analysis

The Information Technology (IT) sector is a critical component of federal spending, encompassing a vast array of services from hardware procurement to complex software development and maintenance. This contract falls under 'Other Computer Related Services,' a broad category within IT that can include IT consulting, system integration, and data processing. Federal IT spending is consistently one of the largest categories of government expenditure, with agencies relying heavily on technology to perform their missions. Benchmarking this contract's value would ideally involve comparing it to similar 'Other Computer Related Services' contracts awarded by the Department of Defense or other large federal agencies, considering factors like contract duration, scope of work, and the specific IT services provided.

Small Business Impact

This contract does not appear to have a small business set-aside component, as indicated by 'sb': false. Furthermore, the 'ss' flag is also false, suggesting it was not a small business prime award. This means that the primary contract was awarded to a large business, Peraton Enterprise Solutions LLC. While there is no direct subcontracting requirement explicitly stated here for small businesses, large prime contractors are often encouraged or required to subcontract portions of their work to small businesses. The absence of a specific set-aside for this sole-source award means that small businesses did not have a direct opportunity to compete for the prime contract itself.

Oversight & Accountability

Oversight for this contract would typically be managed by the contracting officer and the program office within the Department of the Navy. As a firm fixed-price contract, the primary accountability measure is the contractor's successful delivery of the specified IT services within the agreed-upon price. Transparency is limited due to the sole-source nature of the award, making it harder for the public to scrutinize the pricing and justification. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected in the procurement or execution of the contract.

Related Government Programs

Department of Defense IT Services
Navy IT Modernization Programs
Other Computer Related Services Contracts
Sole Source IT Procurements
Firm Fixed Price IT Contracts

Risk Flags

Sole-source award
Lack of competitive bidding
Broad NAICS code classification

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $38.8 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 $38.8 million.

What is the period of performance?

Start: 2010-12-25. End: 2011-12-24.

What is the specific justification for awarding this IT services contract on a sole-source basis to Peraton Enterprise Solutions LLC?

The provided data does not include the specific justification for the sole-source award. Typically, sole-source procurements are justified under specific circumstances outlined in federal acquisition regulations, such as when only one responsible source can provide the required supplies or services, or in cases of urgent and compelling need. Without this justification, it is difficult to assess whether the sole-source award was appropriate and if it truly represented the best value for the government. Further investigation into the contract file or agency justifications would be necessary to understand the rationale behind bypassing the competitive bidding process.

How does the $38.8 million contract value compare to typical spending for 'Other Computer Related Services' within the Department of the Navy?

Comparing the $38.8 million contract value to typical spending for 'Other Computer Related Services' within the Department of the Navy requires access to historical spending data and contract databases. The NAICS code 541519 is broad and can encompass a wide range of services. Without specific benchmarks for similar contracts, it's challenging to determine if this value is high, low, or average. Factors such as the duration of the contract (one year in this case), the specific services rendered, and the complexity of the IT environment supported would influence the appropriate cost. A comparative analysis with other sole-source or competitively awarded contracts for similar IT services within the Navy or DoD would provide better context.

What are the potential risks associated with a sole-source award for IT services, and how might they be mitigated?

The primary risk of a sole-source award for IT services is the potential for inflated pricing due to the lack of competitive pressure. This can lead to reduced value for taxpayer money. Other risks include a lack of innovation that might come from multiple vendors, and potential vendor lock-in. Mitigation strategies include rigorous negotiation of terms and pricing by the contracting officer, establishing clear performance metrics and service level agreements (SLAs) to ensure quality, and conducting thorough market research to ensure that a sole-source award is truly justified. Regular performance reviews and potential re-competition at the earliest opportunity are also crucial.

What is Peraton Enterprise Solutions LLC's track record with the Department of Defense, particularly for IT services?

The provided data indicates that Peraton Enterprise Solutions LLC was awarded this $38.8 million contract for IT services by the Department of the Navy. To assess their track record, one would need to examine their past performance on other government contracts, especially those with the DoD. This would involve looking at contract history, past performance evaluations, any awards or penalties, and their experience with similar types of IT services. A comprehensive review of their portfolio and client feedback would provide insight into their reliability, technical capabilities, and ability to deliver services effectively within budget and schedule.

Given the firm fixed-price contract type, what is the extent of performance risk transferred to Peraton Enterprise Solutions LLC?

Under a firm fixed-price (FFP) contract, the contractor, Peraton Enterprise Solutions LLC, assumes the majority of the performance risk. This means that the contractor is obligated to complete the work for the agreed-upon price, regardless of any cost overruns they may encounter. If their costs exceed the fixed price, their profit margin will decrease, or they could incur a loss. Conversely, if they can complete the work for less than the fixed price, their profit will increase. This contract type incentivizes the contractor to manage costs efficiently and perform the work effectively to maximize their profit.

What are the implications of the 'Other Computer Related Services' NAICS code for understanding the scope and cost of this contract?

The NAICS code 541519, 'Other Computer Related Services,' is a broad classification that covers a wide range of IT activities not specified under other more granular codes. This can include services like IT consulting, system integration, data processing, computer disaster recovery services, and IT support services. The broadness of this code means that the specific scope of work for this $38.8 million contract could vary significantly. It makes direct cost comparisons difficult without knowing the precise services rendered. For instance, IT consulting might have different cost structures and profit margins than managed IT support or disaster recovery services.

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: $38,826,120

Exercised Options: $38,826,120

Current Obligation: $38,826,120

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: YES

Parent Contract

Parent Award PIID: N0003910D0010

IDV Type: IDC

Timeline