DoD's NMCI Services contract awarded to Peraton Enterprise Solutions LLC for $82.8M, spanning 6 months

Contract Overview

Contract Amount: $82,804,654 ($82.8M)

Contractor: Peraton Enterprise Solutions LLC

Awarding Agency: Department of Defense

Start Date: 2020-03-31

End Date: 2020-09-30

Contract Duration: 183 days

Daily Burn Rate: $452.5K/day

Competition Type: FULL AND OPEN COMPETITION

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: NMCI SERVICES

Place of Performance

Location: NORFOLK, NORFOLK CITY County, VIRGINIA, 23511

State: Virginia Government Spending

Plain-Language Summary

Department of Defense obligated $82.8 million to PERATON ENTERPRISE SOLUTIONS LLC for work described as: NMCI SERVICES Key points: 1. Value for money appears fair given the short duration and fixed-price nature, but detailed cost breakdowns are needed for a definitive assessment. 2. Competition dynamics indicate a full and open process, suggesting a competitive pricing environment. 3. Risk indicators are moderate, with a short performance period potentially mitigating some long-term execution risks. 4. Performance context is within IT services, a critical but often complex sector for government. 5. Sector positioning is within IT services, supporting essential defense operations.

Value Assessment

Rating: fair

The contract value of $82.8 million for a 6-month period suggests a significant but potentially reasonable investment for IT services. Benchmarking against similar large-scale IT support contracts is challenging without more granular data on the specific services provided. The firm fixed-price structure implies that the contractor bears the risk of cost overruns, which can be a positive indicator for value if the price was set competitively.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that all responsible sources were permitted to submit offers. The number of bidders is not specified, but this procurement method generally fosters a competitive environment, which should theoretically lead to more favorable pricing for the government. The agency's decision to use full and open competition suggests confidence in the market's ability to provide suitable solutions.

Taxpayer Impact: A full and open competition is generally beneficial for taxpayers as it maximizes the potential for competitive pricing and encourages a wider range of innovative solutions, potentially leading to better value.

Public Impact

The Department of the Navy benefits from essential IT services to maintain its operational capabilities. Services delivered likely include computer systems design and related support, crucial for defense infrastructure. Geographic impact is primarily within the Department of the Navy's operational areas, potentially nationwide or global. Workforce implications may involve IT professionals supporting the contract, both within the government and the contractor's organization.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for scope creep in IT services if not tightly managed.
Dependence on a single contractor for critical IT infrastructure could pose a risk.
Ensuring adequate performance metrics are met within the short 6-month window.

Positive Signals

Firm fixed-price contract provides cost certainty.
Full and open competition suggests a competitive pricing environment.
Short performance period may allow for reassessment and potential re-competition with updated requirements.

Sector Analysis

The IT services sector is a vast and critical component of government operations, encompassing everything from basic network support to complex system design and cybersecurity. This contract falls within the computer systems design services sub-sector. Government spending in this area is substantial, driven by the need to maintain and modernize aging IT infrastructure and adopt new technologies. Benchmarks for similar contracts vary widely based on scope, duration, and specific services, but large-scale IT support contracts can run into hundreds of millions or billions of dollars annually.

Small Business Impact

The data indicates that this contract was not set aside for small businesses (ss: false, sb: false). Therefore, there are no direct subcontracting implications for small businesses arising from a specific set-aside. However, the prime contractor, Peraton Enterprise Solutions LLC, may choose to subcontract portions of the work to small businesses as part of their overall business strategy, though this is not mandated by the contract terms provided.

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 firm fixed-price contract type, which holds the contractor responsible for delivering services within the agreed-upon price. Transparency is generally facilitated through contract award databases, though detailed performance reports may not always be publicly available. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

NMCI (Navy Marine Corps Intranet)
IT Services Contracts
Department of Defense IT Modernization

Risk Flags

Short contract duration may limit long-term strategic impact.
Potential for vendor lock-in if not managed carefully.
Dependence on contractor performance for critical IT functions.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $82.8 million to PERATON ENTERPRISE SOLUTIONS LLC. NMCI 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 $82.8 million.

What is the period of performance?

Start: 2020-03-31. End: 2020-09-30.

What specific IT services are included under this NMCI Services contract?

The provided data classifies this contract under NAICS code 541512, 'Computer Systems Design Services'. This typically encompasses a range of services including designing, developing, and integrating hardware and software solutions. For the NMCI program, this could involve network management, system administration, cybersecurity support, help desk services, and potentially the deployment or configuration of IT infrastructure. However, the exact scope of services for this specific delivery order is not detailed in the provided data and would require examination of the contract's statement of work.

How does the $82.8 million value compare to historical spending on NMCI Services?

The $82.8 million award for a 6-month period represents a significant expenditure. To contextualize this, one would need to analyze historical spending data for the broader NMCI program or similar large-scale IT support contracts awarded by the Department of the Navy. The NMCI program itself has historically been a multi-billion dollar initiative. This specific award appears to be a delivery order under a larger contract vehicle, suggesting it's a component of a broader, ongoing IT support strategy. Without knowing the total value of the parent contract or previous delivery orders, it's difficult to definitively state if this is high or low relative to historical trends, but it indicates substantial resource allocation for the period.

What are the primary risks associated with a 6-month IT services contract of this magnitude?

The primary risks for a 6-month IT services contract of this magnitude include potential disruption if the transition between contractors or service providers is not seamless, and the risk of inadequate performance if the contractor is unable to meet the demanding requirements within the short timeframe. For the government, there's a risk of paying a premium if the fixed price doesn't fully reflect the actual effort required, or conversely, the contractor may cut corners to maintain profitability. Ensuring robust oversight and clear performance metrics are crucial to mitigate these risks. The short duration also limits the opportunity for long-term strategic IT development, focusing more on immediate operational support.

What is the track record of Peraton Enterprise Solutions LLC in delivering similar large-scale IT contracts for the government?

Peraton Enterprise Solutions LLC has a significant track record in the government contracting space, particularly in IT and defense-related services. They have been involved in numerous large-scale contracts, including significant work with various branches of the military and intelligence agencies. Their experience often includes complex system integration, cybersecurity, and mission-critical IT support. While specific performance details for every contract are not always public, their continued success in winning and performing on large federal contracts suggests a generally capable organization. A deeper dive into their past performance evaluations and contract history would provide more specific insights.

How does the 'full and open competition' impact the government's ability to secure competitive pricing for IT services?

Full and open competition is designed to maximize the number of potential bidders, thereby increasing the likelihood of receiving competitive offers. When multiple qualified companies vie for a contract, they are incentivized to offer their best pricing and most innovative solutions to win the award. This process allows the government to leverage market forces to achieve better value. In the context of IT services, where solutions and costs can vary significantly, this approach helps ensure that the government isn't locked into a suboptimal price due to limited options. It promotes price discovery and can lead to significant cost savings compared to sole-source or limited competition scenarios.

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

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Peraton Solutions Inc. (UEI: 081218565)

Address: 13600 EDS DR, HERNDON, VA, 20171

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Limited Liability Corporation, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $82,804,654

Exercised Options: $82,804,654

Current Obligation: $82,804,654

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: YES

Parent Contract

Parent Award PIID: N0003913D0013

IDV Type: IDC

Timeline