DoD's $31.4M NGEN Transport and Enterprise Services contract awarded to Peraton Enterprise Solutions LLC

Contract Overview

Contract Amount: $31,369,344 ($31.4M)

Contractor: Peraton Enterprise Solutions LLC

Awarding Agency: Department of Defense

Start Date: 2014-03-03

End Date: 2015-01-31

Contract Duration: 334 days

Daily Burn Rate: $93.9K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 7

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: NGEN TRANSPORT AND ENTERPRISE SERVICES.

Place of Performance

Location: HERNDON, FAIRFAX County, VIRGINIA, 20171, UNITED STATES OF AMERICA

State: Virginia Government Spending

Plain-Language Summary

Department of Defense obligated $31.4 million to PERATON ENTERPRISE SOLUTIONS LLC for work described as: NGEN TRANSPORT AND ENTERPRISE SERVICES. Key points: 1. The contract value represents a significant investment in IT infrastructure and services for the Department of the Navy. 2. Competition dynamics for this contract are crucial for ensuring cost-effectiveness and service quality. 3. Performance context is key to understanding the effectiveness of IT service delivery under this award. 4. Sector positioning highlights the Navy's reliance on specialized IT providers for critical operations. 5. Risk indicators may include vendor lock-in, service level agreement adherence, and cybersecurity posture.

Value Assessment

Rating: fair

Benchmarking this contract's value against similar large-scale IT service contracts is challenging without more granular data on service scope and duration. The award amount of approximately $31.4 million for a period of roughly one year suggests a substantial per-year investment. However, without specific performance metrics or comparisons to industry benchmarks for comparable services like network management and IT support, a definitive value-for-money assessment is difficult. The fixed-price nature of the contract provides some cost certainty, but the overall value hinges on the successful delivery of all contracted services.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, indicating that multiple vendors had the opportunity to bid. With seven bidders participating, the level of competition appears robust. This suggests that the Department of the Navy sought to leverage market forces to obtain competitive pricing and innovative solutions. A higher number of bidders generally correlates with better price discovery and a wider range of technical approaches being considered.

Taxpayer Impact: The full and open competition process is beneficial for taxpayers as it increases the likelihood of securing services at a fair market price, preventing potential overspending associated with less competitive solicitations.

Public Impact

The primary beneficiaries are the Department of the Navy personnel who rely on robust IT infrastructure for daily operations and mission execution. Services delivered likely include network transport, enterprise IT support, system design, and potentially cybersecurity measures. The geographic impact is likely widespread across Navy installations where these IT services are deployed. Workforce implications may involve the direct employment of IT professionals by the contractor and potential impacts on government IT personnel roles.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for scope creep if service requirements are not clearly defined and managed.
Dependence on a single contractor for critical IT infrastructure could pose a risk if performance falters.
Ensuring continued cybersecurity resilience throughout the contract lifecycle requires vigilant oversight.

Positive Signals

Awarded through full and open competition, suggesting a competitive pricing environment.
The firm-fixed-price contract type provides cost certainty for the government.
The contractor, Peraton Enterprise Solutions LLC, has a track record in government IT services.

Sector Analysis

This contract falls within the broader IT services sector, specifically focusing on computer systems design and related services. The market for enterprise IT services for large government agencies is substantial, characterized by a mix of large prime contractors and specialized subcontractors. The Navy's spending in this area is consistent with the trend of federal agencies outsourcing complex IT operations to manage evolving technological landscapes and ensure operational readiness. Comparable spending benchmarks would typically involve analyzing other large-scale network and IT infrastructure contracts awarded to major defense contractors.

Small Business Impact

While this contract was awarded under full and open competition and does not appear to have a specific small business set-aside, the prime contractor, Peraton Enterprise Solutions LLC, may engage small businesses for subcontracting opportunities. The extent of small business participation will depend on Peraton's subcontracting plan and the specific requirements of the NGEN program. A robust subcontracting plan can foster growth within the small business IT ecosystem by providing them with valuable experience and revenue streams.

Oversight & Accountability

Oversight for this contract would typically be managed by the Department of the Navy's contracting officers and program managers. Accountability measures are embedded in the contract's performance work statement and service level agreements. Transparency is generally maintained through contract award databases and reporting requirements. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse related to the contract.

Related Government Programs

Next Generation Enterprise Network (NGEN)
Department of Defense IT Modernization Programs
Navy Enterprise IT Services Contracts
Federal Civilian IT Services Spending

Risk Flags

Potential for performance issues impacting critical Navy operations.
Cybersecurity risks associated with contractor-managed IT infrastructure.
Risk of vendor lock-in limiting future flexibility.
Dependency on contractor's ability to maintain skilled workforce.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $31.4 million to PERATON ENTERPRISE SOLUTIONS LLC. NGEN TRANSPORT AND ENTERPRISE SERVICES.

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 $31.4 million.

What is the period of performance?

Start: 2014-03-03. End: 2015-01-31.

What is Peraton Enterprise Solutions LLC's track record with similar large-scale federal IT contracts?

Peraton Enterprise Solutions LLC has a significant history of performing IT services for the federal government, including extensive work with the Department of Defense and other civilian agencies. Their portfolio often includes network engineering, cybersecurity, cloud migration, and enterprise IT management. While specific details on past performance for contracts of identical scope and scale to NGEN Transport and Enterprise Services would require deeper analysis of contract databases and performance reviews, Peraton is recognized as a major player in the federal IT contracting space. Their experience suggests a capacity to manage complex, large-volume IT service delivery, which is a prerequisite for a contract of this magnitude. Evaluating their past performance on similar contracts would involve examining metrics related to on-time delivery, budget adherence, service uptime, and customer satisfaction reported in contract performance evaluations.

How does the value of this contract compare to other similar IT service contracts awarded by the Department of the Navy?

The $31.4 million award for NGEN Transport and Enterprise Services represents a substantial, but not unprecedented, investment for the Department of the Navy in IT infrastructure. To provide a precise comparison, one would need to identify contracts with similar scopes, such as comprehensive network management, enterprise IT support, and systems integration, awarded over comparable timeframes. Large-scale IT contracts for defense agencies often range from tens to hundreds of millions of dollars annually, depending on the breadth of services and the number of users supported. For instance, other major network modernization or enterprise IT service contracts within the DoD have seen similar or even higher annual values. The firm-fixed-price nature of this contract also influences its comparability, as it shifts risk to the contractor, potentially leading to a different pricing structure than cost-plus contracts.

What are the primary risks associated with this contract for the government?

The primary risks for the government in this contract include potential underperformance by the contractor, leading to disruptions in critical IT services essential for Navy operations. There's also a risk of vendor lock-in, where the government becomes overly dependent on Peraton, potentially limiting future flexibility or negotiation leverage. Cybersecurity vulnerabilities introduced or not adequately mitigated by the contractor represent a significant risk to national security. Furthermore, if the contract's scope is not meticulously managed, scope creep could lead to cost overruns, despite the firm-fixed-price structure, if change orders become extensive. Ensuring that the contractor maintains adequate staffing levels with the necessary expertise and security clearances is also a continuous risk to monitor.

How effective is the firm-fixed-price contract type in managing costs for this type of IT service?

The firm-fixed-price (FFP) contract type is generally considered effective for managing costs when the scope of work is well-defined and unlikely to change significantly. For IT services like network transport and enterprise support, where requirements can sometimes evolve, FFP provides the government with cost certainty, as the contractor assumes the risk of cost overruns. This incentivizes the contractor to manage their own costs efficiently. However, if unforeseen technical challenges arise or requirements change substantially, the government might need to issue change orders, which can increase the overall contract value. The effectiveness of FFP in this context relies heavily on the initial clarity of the Performance Work Statement (PWS) and the government's ability to resist scope creep while still accommodating necessary adjustments through formal modification processes.

What are the historical spending patterns for similar IT services within the Department of the Navy?

Historical spending patterns for IT services within the Department of the Navy have shown a consistent and significant allocation of resources towards maintaining and modernizing its complex technological infrastructure. Agencies like the Navy typically spend billions annually on IT, encompassing everything from network operations and cybersecurity to software development and end-user support. Spending has increasingly shifted towards enterprise-wide solutions and cloud services to improve efficiency and interoperability. Contracts for network transport and enterprise services, like NGEN, are a substantial component of this spending, reflecting the critical nature of reliable communication and IT support for naval operations globally. Analyzing past budgets and contract awards reveals a trend of sustained investment in these areas, often driven by evolving threats and the need for advanced technological capabilities.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Computer Systems Design and Related Services › Computer Systems Design Services

Product/Service Code: IT AND TELECOM - INFORMATION TECHNOLOGY AND TELECOMMUNICATIONS › ADP AND TELECOMMUNICATIONS

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: N0003912R0009

Offers Received: 7

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: HP, Inc. (UEI: 009122532)

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: $31,369,344

Exercised Options: $31,369,344

Current Obligation: $31,369,344

Contract Characteristics

Cost or Pricing Data: YES

Parent Contract

Parent Award PIID: N0003913D0013

IDV Type: IDC

Timeline