DoD's $48.4M IT services contract awarded to Peraton Enterprise Solutions shows potential for cost savings

Contract Overview

Contract Amount: $48,382,331 ($48.4M)

Contractor: Peraton Enterprise Solutions LLC

Awarding Agency: Department of Defense

Start Date: 2013-09-28

End Date: 2014-09-28

Contract Duration: 365 days

Daily Burn Rate: $132.6K/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 $48.4 million to PERATON ENTERPRISE SOLUTIONS LLC for work described as: OTHER ADP AND TELECOMMUNICATION SVS Key points: 1. Contract awarded on a firm-fixed-price basis, providing cost certainty. 2. Limited competition may have impacted overall value. 3. Contract duration of one year suggests a focused scope. 4. Services fall under 'Other Computer Related Services,' a broad category. 5. Geographic location in Virginia may indicate specific operational needs. 6. No small business set-aside was applied, potentially limiting broader economic impact.

Value Assessment

Rating: fair

The contract's value of $48.4 million for a one-year period for 'Other Computer Related Services' requires further benchmarking. Without comparable contracts or detailed service breakdowns, assessing value for money is challenging. The firm-fixed-price structure offers predictability, but the lack of competition raises questions about whether the government secured the best possible pricing. The awarded amount is significant, suggesting a substantial service requirement.

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 services, or in specific emergency situations. The lack of competition means there was no opportunity for price discovery through a bidding process, potentially leading to higher costs for the government compared to a fully competed contract.

Taxpayer Impact: Sole-source awards limit taxpayer value by removing the downward pressure on pricing that competition provides. This means taxpayers may have paid more than necessary for the services rendered.

Public Impact

The Department of the Navy benefits from IT and telecommunication services. Essential computer-related services are delivered to support military operations. The contract's impact is concentrated within the geographic area of Virginia. The workforce implications are tied to the IT services sector, potentially supporting specialized roles.

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 sole-source justification could hide inefficiencies.
Broad service category 'Other Computer Related Services' lacks specificity, making performance assessment difficult.

Positive Signals

Firm-fixed-price contract provides budget certainty for the Department of Defense.
Award to a single vendor can ensure continuity of critical IT services.
Specific contract duration suggests a defined project or service period.

Sector Analysis

The IT services sector is a vast and dynamic market. This contract, valued at approximately $48.4 million, falls under the 'Other Computer Related Services' category (NAICS 541519). This category encompasses a wide range of IT support, consulting, and integration services not elsewhere classified. The Department of Defense is a significant consumer of IT services, with spending often driven by complex operational requirements and national security needs. Benchmarking this contract's value is difficult without more specific service details, but it represents a notable investment within the broader federal IT procurement landscape.

Small Business Impact

This contract was not set aside for small businesses, nor does it indicate any subcontracting requirements for small businesses. The award to Peraton Enterprise Solutions LLC, a large business, means that opportunities for small businesses to participate in this specific contract are limited. This could reduce the overall economic impact on the small business ecosystem that supports federal IT contracting.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of the Navy's contracting and program management offices. As a firm-fixed-price contract, the primary accountability measure is the delivery of specified services within the agreed-upon price. 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 Procurement
Sole-Source IT Contracts
Computer Related Services

Risk Flags

Sole-source award may limit price competition.
Lack of detailed service description hinders performance assessment.
No small business subcontracting requirements noted.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $48.4 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 $48.4 million.

What is the period of performance?

Start: 2013-09-28. End: 2014-09-28.

What is the specific nature of the 'Other Computer Related Services' provided under this contract?

The provided data classifies the services under NAICS code 541519, 'Other Computer Related Services.' This is a broad category that can include a wide array of IT support, consulting, integration, and maintenance activities not specifically covered by other IT-related NAICS codes. Without further documentation or a detailed statement of work, the precise services rendered under this $48.4 million contract remain unspecified. This lack of specificity makes it challenging to assess the contract's true value, performance, and alignment with specific military or departmental needs. It is possible these services encompass areas like network management, cybersecurity support, software maintenance, or specialized IT consulting crucial for the Department of the Navy's operations.

How does the $48.4 million contract value compare to similar IT service contracts awarded by the Department of the Navy?

Comparing the $48.4 million contract value requires access to a broader dataset of similar IT service contracts awarded by the Department of the Navy, ideally within the same fiscal year or adjacent years, and for comparable service categories (NAICS 541519). Given this contract's sole-source nature and one-year duration, it might represent a specific, perhaps critical, IT support function rather than a large-scale, long-term IT infrastructure project. Without comparative data on the number of bidders, contract types (e.g., firm-fixed-price vs. cost-plus), and specific service deliverables for other contracts, a precise benchmark is difficult. However, $48.4 million for a single year of 'Other Computer Related Services' suggests a substantial requirement, potentially indicating a significant operational dependency on the contractor's services.

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

The primary risk associated with a sole-source award of $48.4 million for IT services is the potential for inflated pricing due to the absence of competitive bidding. Without competing vendors, the government loses the opportunity to leverage market forces to secure the best possible price and value. Other risks include vendor lock-in, where the government becomes overly reliant on a single provider, potentially hindering future flexibility or innovation. There's also a risk that the sole-source justification might not be as robust as it could be, potentially masking inefficiencies or a lack of proactive market research by the agency. Furthermore, if the contractor fails to perform adequately, the government has limited immediate alternatives due to the lack of competition.

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

Peraton Enterprise Solutions LLC has a significant track record of performing federal IT contracts, including substantial work with the Department of Defense. As a large government contractor, Peraton typically engages in a wide range of services, including IT modernization, cybersecurity, cloud computing, and mission-critical support. Their history often involves managing complex systems and providing essential technological infrastructure for various government agencies. While specific performance metrics for individual contracts are not detailed here, their continued awards suggest a generally satisfactory performance history. However, the nature of sole-source awards, like this one, means that direct comparisons of their pricing and value proposition against competitors for this specific service are not publicly available.

How does the firm-fixed-price (FFP) contract type mitigate risks for the government in this IT services contract?

The firm-fixed-price (FFP) contract type is generally considered advantageous for the government when the scope of work is well-defined and risks are understood. For this $48.4 million IT services contract, the FFP structure means that the contractor, Peraton Enterprise Solutions LLC, assumes the primary risk for cost overruns. The government agrees to pay a set price, regardless of the contractor's actual costs incurred in delivering the services. This provides budget certainty and predictability for the Department of the Navy. The main risk for the government shifts from cost overruns to ensuring that the contractor delivers the contracted services to the specified quality standards and within the agreed-upon timeframe. If the contractor's costs are lower than anticipated, Peraton benefits from a higher profit margin; if costs exceed the fixed price, Peraton absorbs the loss.

What are the implications of this contract's $48.4 million value and sole-source award on future IT spending within the Department of the Navy?

A sole-source award of $48.4 million for IT services could set a precedent or indicate a specific strategic direction for the Department of the Navy. If the services provided are critical and unique to Peraton's capabilities, it might signal a reliance on this vendor for certain functions. This could potentially limit future competition for similar services if the agency continues to perceive only one viable source. Conversely, if this award was due to a specific, time-bound need or a gap in available solutions, it might not significantly impact broader future IT spending strategies. However, the lack of competition means that the Navy missed an opportunity to explore potentially more cost-effective solutions or innovative approaches that might have emerged from a competitive bidding process, which could influence future procurement strategies towards more open competition where feasible.

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: $48,382,331

Exercised Options: $48,382,331

Current Obligation: $48,382,331

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: YES

Parent Contract

Parent Award PIID: N0003910D0010

IDV Type: IDC

Timeline