DoD's $44.6M NMCI Services contract awarded to Peraton Enterprise Solutions for IT support

Contract Overview

Contract Amount: $44,563,197 ($44.6M)

Contractor: Peraton Enterprise Solutions LLC

Awarding Agency: Department of Defense

Start Date: 2020-09-01

End Date: 2020-09-30

Contract Duration: 29 days

Daily Burn Rate: $1.5M/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 $44.6 million to PERATON ENTERPRISE SOLUTIONS LLC for work described as: NMCI SERVICES Key points: 1. Contract value represents a significant investment in IT infrastructure. 2. Full and open competition suggests a robust bidding process. 3. Fixed-price contract type shifts performance risk to the contractor. 4. IT services are critical for modern military operations. 5. Contract duration of 29 days is unusually short for IT services. 6. Geographic focus on Virginia highlights a key operational hub.

Value Assessment

Rating: fair

The contract value of $44.6 million for a 29-day period is exceptionally high on a daily basis, suggesting either a very large scope of work or potential inefficiencies. Benchmarking against similar IT service contracts is difficult without more detailed scope information. The firm fixed-price nature provides cost certainty but requires careful monitoring of performance to ensure value.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, indicating that all responsible sources were permitted to submit bids. This typically fosters a competitive environment, potentially leading to better pricing and service offerings. The number of bidders is not specified, which would provide further insight into the intensity of the competition.

Taxpayer Impact: Taxpayers benefit from a competitive process that aims to secure the best value for the government's IT needs.

Public Impact

The Department of the Navy benefits from essential computer systems design services. This contract supports the operational readiness of naval forces. The primary geographic impact is within Virginia, a major hub for naval operations. The contract likely supports a workforce of IT professionals and technicians.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

The extremely high daily burn rate warrants scrutiny to ensure efficient use of funds.
The short duration of the contract raises questions about the scope and sustainability of the services provided.
Lack of detail on specific services delivered makes it hard to assess performance outcomes.

Positive Signals

Awarded through full and open competition, suggesting a fair and competitive process.
Firm fixed-price contract structure provides cost predictability for the government.
Contract supports critical IT infrastructure for the Department of Defense.

Sector Analysis

This contract falls within the IT services sector, specifically Computer Systems Design Services. The federal government is a major consumer of IT services, with spending often concentrated in areas supporting defense, intelligence, and civilian agency operations. The market for these services is competitive, with numerous large and small businesses vying for government contracts. The value of this specific contract, while substantial, needs to be viewed within the broader context of annual federal IT spending, which runs into the hundreds of billions.

Small Business Impact

The data indicates this contract was not set aside for small businesses (ss: false, sb: false). Therefore, there are no direct subcontracting implications for small businesses stemming from a set-aside provision. However, the prime contractor, Peraton Enterprise Solutions LLC, may engage small businesses as subcontractors depending on their own procurement strategies and the specific needs of the NMCI services.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of the Navy's contracting and program management offices. As a delivery order under a larger contract vehicle, oversight might also be influenced by the terms of the parent contract. Transparency is generally facilitated through contract award databases like FPDS. Inspector General jurisdiction would apply if performance issues or potential fraud were identified.

Related Government Programs

Navy Information Technology Support Services
Department of Defense IT Modernization Programs
NMCI (Navy Marine Corps Intranet) Services
Computer Systems Design and Related Services

Risk Flags

High daily expenditure rate
Unusually short contract duration for IT services
Lack of detailed service scope information

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $44.6 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 $44.6 million.

What is the period of performance?

Start: 2020-09-01. End: 2020-09-30.

What is the typical duration for NMCI services contracts, and how does this 29-day period compare?

The typical duration for major IT service contracts like those under the Navy Marine Corps Intranet (NMCI) program is usually much longer, often spanning multiple years with options for extension. A 29-day duration is exceptionally short for comprehensive IT services, suggesting this might be a bridge contract, a task order for a very specific, short-term need, or a component of a larger, ongoing effort. Without further context on the specific task order or the parent contract it falls under, it's difficult to definitively assess its place within typical NMCI service delivery timelines. Longer-term contracts are generally preferred for IT services to ensure continuity, allow for proper planning and implementation, and achieve economies of scale.

How does the awarded amount of $44.6 million for 29 days compare to industry benchmarks for similar IT services?

An award of $44.6 million for a 29-day period equates to a daily rate of approximately $1.54 million. This is an extremely high daily expenditure for IT services. Standard industry benchmarks for IT support services vary widely based on the complexity, scope, and criticality of the services. However, such a high daily rate suggests either an exceptionally large scale of operations, highly specialized and urgent requirements, or potentially an inefficient allocation of resources. It is crucial to understand the specific services rendered during this period to make a meaningful comparison. This daily burn rate warrants a detailed review to ensure it aligns with the value delivered and is not indicative of overpricing or scope creep.

What specific IT services are included under this NMCI Services contract, and what is the expected outcome?

The contract is broadly categorized under 'Computer Systems Design Services' (NAICS code 541512). For the NMCI Services contract, this typically encompasses a wide range of IT support functions critical to the Navy and Marine Corps. These can include network operations and maintenance, cybersecurity services, help desk support, system administration, software and hardware management, and potentially the deployment of new IT infrastructure. The expected outcome is the seamless and secure operation of the Navy's IT environment, ensuring that warfighters and personnel have reliable access to the information and systems they need to perform their missions. The short duration of this specific award suggests the outcome might be focused on a particular project phase, a transition, or a critical, time-bound support requirement.

What is Peraton Enterprise Solutions LLC's track record with similar large-scale IT service contracts for the Department of Defense?

Peraton Enterprise Solutions LLC has a significant track record in providing IT and mission support services to the federal government, including the Department of Defense. They have been involved in various large-scale contracts, often focusing on complex IT infrastructure, cybersecurity, and mission-critical systems. Their experience includes managing extensive networks and providing advanced technological solutions. While specific details of their performance on all contracts require deeper investigation, their presence as a prime contractor on substantial DoD awards indicates a capacity to handle complex requirements. Evaluating their past performance on contracts with similar scope and complexity to NMCI services would be essential for a comprehensive risk assessment.

Given the firm fixed-price contract type, what are the primary risks and benefits for the government?

The primary benefit of a Firm Fixed-Price (FFP) contract for the government is cost certainty. The contractor assumes the majority of the risk for cost overruns, meaning the government pays the agreed-upon price regardless of the contractor's actual costs. This simplifies budgeting and financial management. However, the primary risk for the government is that the contractor may cut corners on quality or scope to maximize profit if not adequately monitored, potentially leading to subpar performance or unmet requirements. To mitigate this, robust performance monitoring and clear acceptance criteria are essential. The government also risks paying a premium price upfront to compensate the contractor for taking on this risk.

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: $44,563,197

Exercised Options: $44,563,197

Current Obligation: $44,563,197

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: YES

Parent Contract

Parent Award PIID: N0003913D0013

IDV Type: IDC

Timeline