GSA's $26.6M DMDC Systems Integration Contract with Peraton Faces Scrutiny for Potential Overpricing

Contract Overview

Contract Amount: $26,628,911 ($26.6M)

Contractor: Peraton Enterprise Solutions LLC

Awarding Agency: General Services Administration

Start Date: 2003-02-27

End Date: 2007-04-30

Contract Duration: 1,523 days

Daily Burn Rate: $17.5K/day

Number of Offers Received: 3

Pricing Type: TIME AND MATERIALS

Sector: IT

Official Description: DMDC SYSTEMS INTEGRATION & TECHNICAL SUPPORT

Place of Performance

Location: HERNDON, FAIRFAX County, VIRGINIA, 20171

State: Virginia Government Spending

Plain-Language Summary

General Services Administration obligated $26.6 million to PERATON ENTERPRISE SOLUTIONS LLC for work described as: DMDC SYSTEMS INTEGRATION & TECHNICAL SUPPORT Key points: 1. The contract awarded to Peraton Enterprise Solutions LLC for DMDC Systems Integration & Technical Support is valued at $26.6 million. 2. Competition details are limited, raising questions about the pricing strategy and potential taxpayer impact. 3. The sector is Computing Infrastructure Providers, Data Processing, Web Hosting, and Related Services, a critical area for government operations. 4. Oversight and accountability mechanisms need to be thoroughly examined given the contract's duration and value.

Value Assessment

Rating: questionable

The contract's Time and Materials pricing structure, coupled with a lack of detailed competition information, makes a direct pricing assessment difficult. Without benchmarks or clearer justification for the $26.6 million spend over 1523 days, it's hard to determine if it represents fair value.

Cost Per Unit: N/A

Competition Analysis

Competition Level: unknown

The contract was awarded under an unknown competition method. The lack of transparency regarding the procurement process hinders an assessment of how effectively price discovery was achieved and if the government secured the best possible pricing.

Taxpayer Impact: The potential for overpricing due to limited competition and a T&M structure could result in a significant negative impact on taxpayer funds.

Public Impact

Citizens may be paying more than necessary for essential IT infrastructure and data processing services. Lack of transparency erodes public trust in government procurement practices. The long duration of the contract suggests a sustained expenditure that warrants close monitoring.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition
Time and Materials pricing
Limited transparency on pricing justification

Positive Signals

Contract supports critical DMDC systems
Long-term engagement indicates potential for stable service delivery

Sector Analysis

This contract falls within the Computing Infrastructure Providers, Data Processing, Web Hosting, and Related Services sector. Spending in this area is substantial across government, and efficient procurement is crucial for operational effectiveness and fiscal responsibility.

Small Business Impact

There is no indication in the provided data whether small businesses were involved in this contract, either as prime contractors or subcontractors. Further investigation is needed to assess opportunities for small business participation.

Oversight & Accountability

The contract's duration and value necessitate robust oversight to ensure performance standards are met and costs remain justified. The General Services Administration (GSA) should provide clear documentation on how this contract was managed and audited.

Related Government Programs

Computing Infrastructure Providers, Data Processing, Web Hosting, and Related Services
General Services Administration Contracting
Federal Acquisition Service Programs

Risk Flags

Potential for cost overruns due to T&M pricing
Lack of transparency in procurement process
Limited information on competition
Difficulty in assessing value for money

Frequently Asked Questions

What is this federal contract paying for?

General Services Administration awarded $26.6 million to PERATON ENTERPRISE SOLUTIONS LLC. DMDC SYSTEMS INTEGRATION & TECHNICAL SUPPORT

Who is the contractor on this award?

The obligated recipient is PERATON ENTERPRISE SOLUTIONS LLC.

Which agency awarded this contract?

Awarding agency: General Services Administration (Federal Acquisition Service).

What is the total obligated amount?

The obligated amount is $26.6 million.

What is the period of performance?

Start: 2003-02-27. End: 2007-04-30.

What was the specific justification for using a Time and Materials contract for this IT service, and how was the hourly rate determined to ensure fair pricing?

Time and Materials contracts are typically used when the scope of work is not clearly defined or is expected to change. However, for IT systems integration and technical support, a more fixed-price or cost-plus-fixed-fee structure might offer better cost control. The government should have established ceiling prices and conducted thorough market research to benchmark hourly rates against industry standards to prevent overpayment.

Given the lack of explicit competition details, what steps were taken to ensure the government received competitive pricing and avoided potential vendor lock-in?

Without clear competition details, it's difficult to ascertain the steps taken. Ideally, agencies should conduct thorough market research, consider multiple sources, and negotiate aggressively. If a sole-source or limited competition was used, there should be a documented justification. The absence of this information raises concerns about the government's ability to secure the best value and potentially limits future flexibility.

How does the $26.6 million expenditure over 1523 days for DMDC systems integration compare to industry benchmarks for similar services, and what is the projected return on investment for the governmen

A direct comparison to industry benchmarks is challenging without specific details on the services rendered and the complexity of the DMDC systems. However, a $26.6 million spend over approximately four years suggests a significant investment. The government should have metrics to track the return on investment, such as improved system performance, reduced downtime, enhanced security, and cost savings realized through the integration and support.

Industry Classification

NAICS: Information › Computing Infrastructure Providers, Data Processing, Web Hosting, and Related Services › Computing Infrastructure Providers, Data Processing, Web Hosting, and Related Services

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

Contractor Details

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

Address: 13600 EDS DR, HERNDON, VA, 11

Business Categories: Category Business, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $26,628,911

Exercised Options: $26,628,911

Current Obligation: $26,628,911

Parent Contract

Parent Award PIID: GS35F0323J

IDV Type: FSS

Timeline