DoD's $58.5M IT Services Contract Awarded to Peraton Enterprise Solutions LLC Under Sole Source Basis

Contract Overview

Contract Amount: $58,504,328 ($58.5M)

Contractor: Peraton Enterprise Solutions LLC

Awarding Agency: Department of Defense

Start Date: 2011-05-31

End Date: 2011-09-30

Contract Duration: 122 days

Daily Burn Rate: $479.5K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: OTHER ADP AND TELECOMMUNICATIONS SVS

Place of Performance

Location: HERNDON, FAIRFAX County, VIRGINIA, 20171

State: Virginia Government Spending

Plain-Language Summary

Department of Defense obligated $58.5 million to PERATON ENTERPRISE SOLUTIONS LLC for work described as: OTHER ADP AND TELECOMMUNICATIONS SVS Key points: 1. Contract awarded on a sole-source basis, limiting price competition and potentially increasing costs. 2. Significant portion of the contract value ($4.8M) was for delivery orders, indicating flexibility but also potential for uncompeted tasking. 3. The contract's duration of 122 days is relatively short, suggesting a focused scope or a bridge contract. 4. The 'Other Computer Related Services' NAICS code is broad, making direct benchmarking challenging. 5. No small business set-aside was utilized, potentially impacting small business participation. 6. The contract was awarded by the Department of the Navy, a major component of the DoD.

Value Assessment

Rating: fair

The total award value of $58.5 million for a 122-day contract appears high for 'Other Computer Related Services,' especially given the lack of competition. Without more detailed service descriptions or comparable contract data, it's difficult to definitively benchmark the value. The contract's fixed-price nature provides some cost certainty, but the sole-source award mechanism raises concerns about whether the government achieved the best possible price.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning only one vendor, Peraton Enterprise Solutions LLC, was solicited. This approach bypasses the competitive bidding process, which typically leads to better pricing and a wider range of solutions. The lack of competition here suggests potential reasons such as urgency, unique capabilities, or prior performance, but it limits the government's ability to explore market alternatives and secure the most cost-effective option.

Taxpayer Impact: Taxpayers may have paid a premium due to the absence of competitive pressure. The government missed an opportunity to leverage market forces to drive down costs and potentially identify innovative solutions from a broader pool of vendors.

Public Impact

The Department of the Navy benefits from the IT services provided, ensuring operational continuity. The contract supports essential computer-related services, crucial for defense operations. The geographic impact is primarily within the Department of the Navy's operational areas. Workforce implications are likely internal to Peraton Enterprise Solutions LLC and the Navy's IT departments.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competitive pricing and potentially increases cost to taxpayers.
Broad NAICS code makes it difficult to assess the specific nature and value of services rendered.
Lack of small business participation noted, potentially excluding smaller innovative firms.

Positive Signals

Firm fixed-price contract provides cost certainty for the awarded scope.
Awarded to an established entity, potentially indicating a known capability to meet requirements.

Sector Analysis

The Information Technology (IT) sector, particularly within the defense industry, is characterized by rapid technological advancements and significant government spending. Contracts for 'Other Computer Related Services' can encompass a wide array of support, from network management to software development. Benchmarking this contract is challenging due to the broad NAICS code and sole-source nature, but IT services represent a substantial portion of federal procurement, with agencies constantly seeking to modernize and secure their systems.

Small Business Impact

This contract did not include a small business set-aside, nor does it appear to have specific subcontracting requirements for small businesses mentioned in the provided data. This means that opportunities for small businesses to participate in this specific contract were likely limited. The absence of set-asides in sole-source awards is common, but it represents a missed opportunity to foster small business growth and innovation within the federal IT services ecosystem.

Oversight & Accountability

Oversight for this contract would fall under the Department of the Navy's contracting and program management offices. As a sole-source award, scrutiny might be higher to justify the lack of competition. Transparency is limited by the nature of the award; however, contract actions are generally reported in federal procurement databases. 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
Other Computer Related Services

Risk Flags

Sole Source Justification
Lack of Competition
Broad Service Category

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $58.5 million to PERATON ENTERPRISE SOLUTIONS LLC. OTHER ADP AND TELECOMMUNICATIONS 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 $58.5 million.

What is the period of performance?

Start: 2011-05-31. End: 2011-09-30.

What specific IT services were provided under this $58.5 million contract?

The provided data indicates the NAICS code is 541519, 'Other Computer Related Services.' This is a broad category that can include services such as IT consulting, systems integration design, computer facilities management, and disaster recovery services. However, without a more detailed contract description or statement of work, the precise nature of the services rendered by Peraton Enterprise Solutions LLC remains unspecified. This lack of specificity makes it difficult to assess the true value or necessity of the contract beyond its broad classification.

Why was this contract awarded on a sole-source basis instead of being competed?

The data explicitly states the contract was 'NOT COMPETED,' indicating a sole-source award. Common justifications for sole-source contracts include urgent and compelling needs, unique technical capabilities possessed by only one vendor, or situations where only one responsible source exists. Without further documentation from the Department of the Navy, the specific rationale for awarding this $58.5 million contract to Peraton Enterprise Solutions LLC without competition is unknown. This lack of competition limits transparency and the potential for cost savings through market forces.

How does the $58.5 million award compare to typical spending for 'Other Computer Related Services' by the Department of the Navy?

Benchmarking this $58.5 million award against typical spending for NAICS code 541519 by the Department of the Navy is challenging due to the broad nature of the code and the sole-source award. Federal procurement data shows significant spending across various IT service categories. However, the relatively short duration (122 days) for such a substantial amount suggests either highly specialized, high-value services or potentially an inflated price due to the lack of competition. A direct comparison would require analyzing contracts with similar scopes and competitive histories within the Navy's IT portfolio.

What is the track record of Peraton Enterprise Solutions LLC in securing federal IT contracts, particularly sole-source awards?

Peraton Enterprise Solutions LLC is a known entity in the federal contracting space, often handling large and complex IT and telecommunications contracts. While specific details on their sole-source award history are not provided here, companies of their size frequently engage in both competed and sole-source procurements. Their ability to secure significant sole-source awards suggests they possess capabilities or relationships that agencies deem essential, though it also raises questions about market dynamics and competition levels in the IT services sector.

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

The primary risk associated with a sole-source award of this magnitude ($58.5 million) is the potential for overpayment due to the absence of competitive bidding. Without competing offers, the government may not achieve the best possible price or identify the most innovative or efficient solutions available in the market. Additionally, sole-source awards can create vendor lock-in and reduce flexibility in future procurements. There's also a risk that the justification for the sole-source award might be weak, leading to inefficient use of taxpayer funds.

How does the contract's fixed-price type influence risk and value?

A Firm Fixed Price (FFP) contract type, as indicated for this award, shifts most of the cost risk from the government to the contractor, Peraton Enterprise Solutions LLC. This means the contractor is obligated to complete the work for the agreed-upon price, regardless of their actual costs. For the government, this provides budget certainty. However, in a sole-source context, the 'fixed price' might have been negotiated without the downward pressure that competition typically provides, potentially making the price less favorable for the government than it could have been.

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: $58,504,328

Exercised Options: $58,504,328

Current Obligation: $58,504,328

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: YES

Parent Contract

Parent Award PIID: N0003910D0010

IDV Type: IDC

Timeline