DoD's $241M PEO EIS COSC SERVICES contract awarded to Peraton Enterprise Solutions LLC shows questionable value and limited competition

Contract Overview

Contract Amount: $241,399,017 ($241.4M)

Contractor: Peraton Enterprise Solutions LLC

Awarding Agency: Department of Defense

Start Date: 2013-10-01

End Date: 2014-09-30

Contract Duration: 364 days

Daily Burn Rate: $663.2K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: PEO EIS COSC SERVICES

Place of Performance

Location: ARLINGTON, ARLINGTON County, VIRGINIA, 22202

State: Virginia Government Spending

Plain-Language Summary

Department of Defense obligated $241.4 million to PERATON ENTERPRISE SOLUTIONS LLC for work described as: PEO EIS COSC SERVICES Key points: 1. The contract's value proposition is unclear given the lack of competitive bidding and limited performance data. 2. Limited competition raises concerns about potential overpricing and reduced innovation. 3. The contract's duration and fixed-price nature suggest a moderate risk profile. 4. Performance context is limited due to the 'Other Computer Related Services' NAICS code and lack of specific deliverables. 5. This contract falls within the IT services sector, specifically supporting defense-related IT operations. 6. The absence of small business set-asides or subcontracting plans is noted.

Value Assessment

Rating: questionable

Benchmarking the value of this contract is challenging due to the absence of competitive pricing data and detailed performance metrics. The sole-source award suggests that the government may not have achieved the best possible price. Without comparable contracts or a clear understanding of the services rendered, it's difficult to definitively assess value for money. The reported award amount of over $241 million for a single year of service warrants scrutiny to ensure it aligns with market rates for similar IT services.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning it was not competed among multiple vendors. This approach typically occurs when only one vendor possesses the necessary capabilities, security clearances, or proprietary technology required for the service. The lack of competition limits the government's ability to leverage market forces to drive down costs and encourage innovation. It also raises questions about whether a more competitive approach could have been pursued.

Taxpayer Impact: Sole-source awards can lead to higher costs for taxpayers as there is no competitive pressure to ensure the lowest possible price. This reduces the overall value for money achieved with federal funds.

Public Impact

The primary beneficiaries of this contract are the Department of Defense and its personnel, who receive IT support services. The services delivered are broadly categorized as 'Other Computer Related Services,' indicating a range of IT support functions. The geographic impact is likely concentrated within the Department of the Navy's operational areas, primarily in Virginia. Workforce implications include the employment of IT professionals by Peraton Enterprise Solutions LLC to fulfill the contract requirements.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition may lead to inflated costs.
Limited transparency on specific services provided.
Sole-source award raises concerns about market fairness.
No clear indication of performance metrics or success criteria.

Positive Signals

Contract awarded to a known entity, Peraton Enterprise Solutions LLC.
Fixed-price contract structure can provide cost predictability.
Services are essential for supporting defense IT infrastructure.

Sector Analysis

This contract falls within the broader IT services sector, which is a significant area of federal spending. The specific NAICS code, 541519, covers 'Other Computer Related Services,' indicating a wide range of potential IT support functions beyond standard software development or IT infrastructure management. Federal spending in this category is substantial, driven by the need for advanced technological capabilities across various agencies, particularly in defense. Comparable spending benchmarks are difficult to establish without more granular service details, but the overall IT services market is highly competitive, making the sole-source nature of this award notable.

Small Business Impact

The contract details indicate that this was not a small business set-aside, and there is no explicit mention of subcontracting plans for small businesses. This suggests that the prime contractor, Peraton Enterprise Solutions LLC, is likely a large business, and the contract did not prioritize opportunities for small business participation. Consequently, the impact on the small business ecosystem for this specific award appears minimal, as opportunities for subcontracting or direct award to small businesses were not a stated objective.

Oversight & Accountability

Oversight mechanisms for this contract would typically be managed by the Department of the Navy's contracting officers and program managers. Accountability measures would be tied to the terms of the firm-fixed-price contract and any performance standards outlined. Transparency is limited due to the sole-source nature and the broad categorization of services. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

PEO EIS IT Services
Department of the Navy IT Support
Defense Information Technology Contracting
Sole-Source IT Services Awards
Other Computer Related Services Contracts

Risk Flags

Sole-source award
Lack of competition
Broad service description
High contract value

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $241.4 million to PERATON ENTERPRISE SOLUTIONS LLC. PEO EIS COSC 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 $241.4 million.

What is the period of performance?

Start: 2013-10-01. End: 2014-09-30.

What specific IT services were provided under the PEO EIS COSC SERVICES contract?

The contract falls under NAICS code 541519, 'Other Computer Related Services.' This broad category can encompass a wide array of IT support functions, including but not limited to IT system administration, network support, help desk services, IT consulting, and potentially specialized technical support for defense systems. However, without more specific details within the contract award documentation, the precise nature and scope of the services rendered by Peraton Enterprise Solutions LLC remain undefined. This lack of specificity makes it challenging to evaluate the contract's effectiveness or compare its value to other IT service contracts.

How does the $241 million award amount compare to market rates for similar IT services?

Directly comparing the $241 million award to market rates for 'Other Computer Related Services' is difficult without knowing the exact services provided, the duration, and the geographic scope. However, for a single year of service, this is a substantial amount. The fact that it was a sole-source award means that competitive market forces were not leveraged to ensure the best possible price. Typically, sole-source contracts may carry a premium compared to competitively bid contracts. Further analysis would require benchmarking against other sole-source or competitively awarded contracts for similar IT support services within the Department of Defense or other federal agencies, considering factors like labor categories, service levels, and security requirements.

What are the risks associated with a sole-source award for IT services of this magnitude?

The primary risk associated with a sole-source award of this magnitude is the potential for overpayment and reduced value for taxpayer money. Without competition, there is less incentive for the contractor to offer the most competitive pricing. Additionally, sole-source awards can limit the government's access to innovative solutions or alternative service providers that might offer better performance or cost efficiencies. There's also a risk that the government may become overly reliant on a single vendor, potentially impacting flexibility and future contracting options. Ensuring robust oversight and justification for the sole-source determination is crucial to mitigate these risks.

What performance metrics were used to evaluate Peraton Enterprise Solutions LLC's delivery of services?

The provided data does not include specific performance metrics or evaluation criteria used for this contract. For a firm-fixed-price contract, performance is typically assessed against the contract's requirements and deliverables. However, the broad nature of 'Other Computer Related Services' and the sole-source award suggest that detailed, quantifiable performance metrics might not have been as rigorously defined or publicly disclosed as they would be in a competitively bid scenario with specific service level agreements (SLAs). Accountability would likely stem from adherence to the contract terms, but the effectiveness of the services in achieving desired outcomes is not explicitly detailed in the summary data.

What is the historical spending pattern for PEO EIS COSC SERVICES or similar contracts?

Historical spending data for this specific contract, 'PEO EIS COSC SERVICES,' is not provided in the summary. However, the award amount of over $241 million for a single year (October 1, 2013, to September 30, 2014) indicates a significant investment in IT services by the Program Executive Office for Enterprise Information Systems (PEO EIS). To understand historical patterns, one would need to examine prior contracts awarded by PEO EIS for similar IT support services, looking at award amounts, contract types, and competition levels over several fiscal years. This would help determine if this award represents an increase or decrease in spending and if the trend towards sole-source awards is consistent.

Were there any justifications provided for awarding this contract on a sole-source basis?

Sole-source awards, especially for large dollar amounts, typically require a formal justification and approval (J&A) process. This process outlines why full and open competition is not feasible or not in the government's best interest. Common justifications include the existence of only one responsible source, urgent and compelling needs, or specific capabilities possessed by a single contractor. Without access to the J&A document for this specific contract, the precise reasons for the sole-source award remain unknown. However, the process is designed to ensure that such awards are made only when truly necessary and that the government still seeks the best value under the circumstances.

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: $241,399,017

Exercised Options: $241,399,017

Current Obligation: $241,399,017

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: YES

Parent Contract

Parent Award PIID: N0003910D0010

IDV Type: IDC

Timeline