DoD's $67.7M IT services contract awarded to Peraton Enterprise Solutions LLC, with limited competition

Contract Overview

Contract Amount: $67,735,615 ($67.7M)

Contractor: Peraton Enterprise Solutions LLC

Awarding Agency: Department of Defense

Start Date: 2011-09-30

End Date: 2012-09-29

Contract Duration: 365 days

Daily Burn Rate: $185.6K/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 $67.7 million to PERATON ENTERPRISE SOLUTIONS LLC for work described as: OTHER ADP AND TELECOMMUNICATION SVS Key points: 1. The contract's value of $67.7 million for IT services represents a significant investment by the Department of the Navy. 2. Awarded as a delivery order, this contract likely fulfills a specific, pre-defined need within the Navy's IT infrastructure. 3. The 'NOT COMPETED' status raises questions about the extent of market research and potential for cost savings through broader competition. 4. Fixed-price contracts generally offer cost certainty, but the lack of competition may have limited price negotiation leverage. 5. The contract duration of 365 days suggests a focused, short-term requirement rather than a long-term strategic IT partnership. 6. The NAICS code 541519 indicates a broad scope of 'Other Computer Related Services,' requiring further detail to assess specific service delivery.

Value Assessment

Rating: questionable

Benchmarking the value of this $67.7 million contract is challenging without specific details on the services rendered. However, the absence of a competitive bidding process suggests that the Navy may not have achieved the most favorable pricing. Compared to similar IT service contracts that undergo full and open competition, this award could potentially represent a higher cost to the government due to limited price discovery. The fixed-price nature provides some cost predictability, but the overall value proposition is weakened by the lack of competitive pressure.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded under a 'NOT COMPETED' status, indicating that a full and open competition was not conducted. This typically occurs when only one responsible source is available or when the need arises from an urgent requirement. The lack of multiple bidders means that the government did not benefit from the price discovery and innovation that typically arises from a competitive procurement process. This approach limits the opportunity to explore a wider range of solutions and potentially more cost-effective options.

Taxpayer Impact: The absence of competition means taxpayers may have paid a premium for these IT services, as there was no market pressure to drive down costs. This could represent a missed opportunity for greater cost savings.

Public Impact

The Department of the Navy benefits from the provision of essential IT services, ensuring operational continuity and support for its missions. Personnel within the Navy's IT departments and potentially end-users of the systems supported by these services are the direct beneficiaries. The geographic impact is likely concentrated within the Navy's operational areas, potentially including bases and facilities in Virginia, where the contractor is located. Workforce implications could include the utilization of Peraton's IT specialists, potentially augmenting or supporting existing Navy IT personnel.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition may lead to higher costs for taxpayers.
Limited transparency into the specific services provided under 'Other Computer Related Services'.
Potential for vendor lock-in if this is a recurring need without re-competition.
The 'NOT COMPETED' status warrants scrutiny regarding the justification for not seeking multiple bids.

Positive Signals

Awarded as a firm-fixed-price contract, providing cost certainty for the government.
The contractor, Peraton Enterprise Solutions LLC, is an established entity in the government contracting space.
The contract duration is clearly defined, allowing for focused execution and management.
The delivery order mechanism suggests a specific, well-defined requirement was met.

Sector Analysis

This contract falls within the Information Technology (IT) sector, specifically under 'Other Computer Related Services.' The IT services market for the federal government is vast and highly competitive, encompassing a wide range of solutions from software development to network management. Contracts like this, even when not fully competed, are crucial for maintaining the operational capabilities of agencies like the Department of the Navy. Comparable spending benchmarks for IT services vary widely based on scope, complexity, and duration, but a $67.7 million award for a year-long project indicates a substantial requirement.

Small Business Impact

This contract does not appear to have a small business set-aside component, as indicated by 'sb': false. Furthermore, the 'ss': false flag suggests it was not awarded under the small business set-aside program. This means that opportunities for small businesses to participate as prime contractors or through subcontracting may be limited, depending on Peraton's subcontracting plans. The absence of a specific small business focus in the award details suggests that larger, established companies were likely the primary participants in this procurement.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of the Navy's contracting and program management offices. As a delivery order under a larger contract vehicle (though the base contract details are not provided), oversight would focus on the timely and quality delivery of the specified IT services. Accountability measures would be tied to the firm-fixed-price terms and performance expectations. Transparency is limited by the 'NOT COMPETED' status, making it harder for the public to assess the procurement process. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

Department of Defense IT Modernization Programs
Navy Enterprise IT Services
Information Technology Support Services
Cloud Computing Services
Cybersecurity Services

Risk Flags

Lack of Competition
Potential for Overpricing
Limited Transparency
Broad Service Category

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $67.7 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 $67.7 million.

What is the period of performance?

Start: 2011-09-30. End: 2012-09-29.

What specific IT services were provided under this $67.7 million contract?

The contract is categorized under NAICS code 541519, 'Other Computer Related Services.' This broad classification encompasses a wide array of IT support functions, which could include network administration, system maintenance, help desk support, software installation and configuration, IT infrastructure management, or specialized IT consulting. Without further details from the contract award documentation or the specific delivery order, it is impossible to pinpoint the exact services rendered. However, given the substantial value, it likely involved a significant scope of support critical to the Department of the Navy's operations.

What is the justification for awarding this contract without full and open competition?

The 'NOT COMPETED' status indicates that the Department of the Navy determined that full and open competition was not practicable or in the government's best interest for this specific requirement. Common justifications for sole-source or limited competition awards include the existence of only one responsible source capable of providing the required services, urgent and compelling needs that preclude a competitive process, or specific circumstances outlined in federal acquisition regulations (e.g., follow-on work to a previously competed contract where only the original contractor can provide the service due to proprietary data or unique capabilities). A detailed justification document should exist within the agency's procurement file.

How does the $67.7 million contract value compare to similar IT service contracts awarded by the Department of the Navy?

Comparing this $67.7 million contract value requires context regarding the specific IT services and duration. The Department of the Navy awards numerous IT contracts, ranging from small, specialized services to large enterprise-wide solutions. A $67.7 million award for a one-year contract (365 days) suggests a significant undertaking. For instance, broader IT modernization efforts or large-scale infrastructure support contracts can run into hundreds of millions or even billions of dollars over multiple years. However, for a single-year delivery order focused on specific 'Other Computer Related Services,' this amount indicates a substantial investment, potentially higher than what might be achieved through a fully competitive process.

What are the potential risks associated with awarding a contract of this magnitude without competition?

The primary risk associated with awarding a contract of this magnitude without competition is the potential for inflated costs. Without the pressure of multiple bidders vying for the contract, the government may not secure the most competitive pricing. This can lead to a lower value for taxpayer money. Additionally, a lack of competition can stifle innovation, as the government is limited to the solutions offered by a single provider. There's also a risk of reduced transparency and accountability, as the justification for the sole-source award needs careful scrutiny to ensure it was indeed necessary and not a result of poor planning or preferential treatment.

What is Peraton Enterprise Solutions LLC's track record with federal IT contracts?

Peraton Enterprise Solutions LLC is a significant player in the federal IT contracting landscape. The company has a history of securing and performing on large-scale government contracts, particularly within the defense and intelligence sectors. Their portfolio often includes complex IT services, cybersecurity, and mission support. While specific performance details for this particular $67.7 million contract are not detailed here, Peraton's general track record suggests they possess the capabilities to handle substantial IT requirements. However, as with any large contractor, past performance reviews and contract-specific data would be necessary for a comprehensive assessment.

What historical spending patterns exist for 'Other Computer Related Services' within the Department of the Navy?

Historical spending patterns for 'Other Computer Related Services' (NAICS 541519) within the Department of the Navy are substantial, reflecting the critical role of IT in modern naval operations. The Navy consistently invests heavily in IT infrastructure, software, and support services to maintain readiness, enhance communication, and manage complex systems. Spending in this category can fluctuate based on modernization initiatives, cybersecurity threats, and specific platform requirements. Analyzing historical data would reveal trends in contract values, types of services procured, and the prevalence of competitive versus non-competitive awards within this specific service category.

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: $67,735,615

Exercised Options: $67,735,615

Current Obligation: $67,735,615

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: YES

Parent Contract

Parent Award PIID: N0003910D0010

IDV Type: IDC

Timeline