Treasury's $21.9M IT refresh contract awarded to Peraton Enterprise Solutions LLC for OCC computer systems

Contract Overview

Contract Amount: $21,919,998 ($21.9M)

Contractor: Peraton Enterprise Solutions LLC

Awarding Agency: Department of the Treasury

Start Date: 2012-06-15

End Date: 2017-09-30

Contract Duration: 1,933 days

Daily Burn Rate: $11.3K/day

Competition Type: FULL AND OPEN COMPETITION

Pricing Type: TIME AND MATERIALS

Sector: IT

Official Description: IGF::OT::IGF OTHER FUNCTION AND LOW DISCRETION. SECOND TECHNICAL REFRESH OF OCC'S COMPUTER SYSTEMS.

Place of Performance

Location: HERNDON, FAIRFAX County, VIRGINIA, 20171

State: Virginia Government Spending

Plain-Language Summary

Department of the Treasury obligated $21.9 million to PERATON ENTERPRISE SOLUTIONS LLC for work described as: IGF::OT::IGF OTHER FUNCTION AND LOW DISCRETION. SECOND TECHNICAL REFRESH OF OCC'S COMPUTER SYSTEMS. Key points: 1. Contract awarded via full and open competition, suggesting a competitive bidding process. 2. The contract's duration of over 5 years indicates a long-term need for IT services. 3. The 'Other Computer Related Services' NAICS code points to a broad scope of IT support. 4. Awarded as a delivery order, suggesting it's part of a larger contract vehicle. 5. The contract's value of $21.9M falls within a moderate spending range for IT modernization. 6. The use of Time and Materials pricing may introduce cost variability. 7. Virginia is the performance location, indicating a concentration of federal IT work in the region.

Value Assessment

Rating: fair

The contract's value of $21.9 million for a 5-year IT refresh project appears moderate. Without specific benchmarks for similar 'second technical refresh' projects, a precise value-for-money assessment is challenging. The Time and Materials (T&M) pricing structure, while flexible, can lead to cost overruns if not managed closely. Comparing this to other IT modernization contracts of similar scope and duration would be necessary for a more robust benchmark. The absence of a specific task order number or parent contract makes direct comparison difficult.

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 a bid. The number of bidders is not specified, but this procurement method generally fosters price discovery and encourages competitive pricing. The agency sought proposals from a wide range of potential contractors, which should have led to a more favorable price for the government compared to sole-source or limited competition awards.

Taxpayer Impact: A full and open competition process is generally beneficial for taxpayers as it maximizes the potential for cost savings through competitive bidding, leading to a more efficient use of public funds.

Public Impact

The Office of the Comptroller of the Currency (OCC) benefits from updated and potentially more secure computer systems. Federal employees within the OCC will have access to improved IT infrastructure, potentially increasing productivity. The contract supports IT service providers and potentially related technology vendors in Virginia. Modernized IT systems can enhance the OCC's ability to perform its regulatory functions effectively.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Time and Materials (T&M) pricing can lead to cost escalation if not carefully monitored and controlled.
The 'second technical refresh' implies ongoing IT infrastructure needs, potentially indicating a cycle of recurring costs.
The broad NAICS code (541519) might obscure the specific services rendered, making detailed performance tracking more complex.
The contract's duration of over 5 years requires sustained oversight to ensure continued value and performance.

Positive Signals

Awarded through full and open competition, suggesting a robust vetting of potential contractors and pricing.
The contract addresses a critical need for IT system modernization, essential for operational efficiency.
The performance location in Virginia may leverage established IT talent pools.
The contract is a delivery order, potentially indicating it's part of a pre-vetted, established contract vehicle.

Sector Analysis

The IT services sector is characterized by rapid technological advancements and a wide range of specialized services. This contract falls under 'Other Computer Related Services,' a broad category that can encompass IT consulting, system integration, and technical support. The federal government is a significant consumer of IT services, with spending often focused on modernization, cybersecurity, and cloud migration. Comparable spending benchmarks would typically involve analyzing IT modernization contracts for agencies of similar size and mission, considering factors like system complexity and user base.

Small Business Impact

The contract was not set aside for small businesses (ss: false, sb: false). As a result, large businesses like Peraton Enterprise Solutions LLC were eligible to bid and win. This means that opportunities for small business subcontracting may be limited unless explicitly included in the prime contractor's plan. The absence of a small business set-aside suggests that the scope or nature of the services was deemed more suitable for larger, established IT providers, potentially impacting the broader small business IT ecosystem.

Oversight & Accountability

Oversight for this contract would primarily reside with the Department of the Treasury and the Office of the Comptroller of the Currency (OCC). As a delivery order, it likely falls under a larger contract vehicle with its own oversight mechanisms. The Time and Materials pricing structure necessitates close monitoring of labor hours and material costs to ensure accountability and prevent overspending. Transparency would be enhanced through regular reporting requirements from the contractor and potential audits by the Treasury Inspector General.

Related Government Programs

IT Modernization Contracts
Computer Systems Integration Services
IT Support Services
Federal Agency IT Infrastructure Upgrades
Technology Refresh Contracts

Risk Flags

Potential for cost overruns due to Time and Materials pricing.
Scope definition for 'second technical refresh' may be complex.
Reliance on contractor performance for critical IT infrastructure.
Need for sustained oversight over a multi-year contract.

Frequently Asked Questions

What is this federal contract paying for?

Department of the Treasury awarded $21.9 million to PERATON ENTERPRISE SOLUTIONS LLC. IGF::OT::IGF OTHER FUNCTION AND LOW DISCRETION. SECOND TECHNICAL REFRESH OF OCC'S COMPUTER SYSTEMS.

Who is the contractor on this award?

The obligated recipient is PERATON ENTERPRISE SOLUTIONS LLC.

Which agency awarded this contract?

Awarding agency: Department of the Treasury (Office of the Comptroller of the Currency).

What is the total obligated amount?

The obligated amount is $21.9 million.

What is the period of performance?

Start: 2012-06-15. End: 2017-09-30.

What is the specific nature of the 'second technical refresh' and what systems are being updated?

The contract description mentions 'SECOND TECHNICAL REFRESH OF OCC'S COMPUTER SYSTEMS.' A 'technical refresh' typically involves updating aging hardware and software components to maintain performance, security, and compatibility with newer technologies. A 'second' refresh suggests this is not the initial modernization but a subsequent iteration. Without more detailed documentation, it's difficult to pinpoint the exact systems. However, it likely includes servers, workstations, networking equipment, and potentially core operating systems and application software used by the Office of the Comptroller of the Currency (OCC) to perform its financial regulatory functions. The goal is usually to mitigate risks associated with outdated technology, such as security vulnerabilities, performance degradation, and lack of vendor support.

How does the Time and Materials (T&M) pricing structure compare to fixed-price or cost-plus models for similar IT refresh projects?

Time and Materials (T&M) pricing is often used when the scope of work is not clearly defined or is expected to evolve. For IT refresh projects, T&M offers flexibility, allowing the contractor to adjust resources as needed. However, it carries a higher risk of cost overruns for the government compared to fixed-price contracts, as the final cost is directly tied to the hours worked and materials used. Cost-plus contracts also involve flexibility but include a profit margin defined as a percentage of costs. Fixed-price contracts offer the most cost certainty but require a well-defined scope upfront. For IT refreshes, a well-defined scope might favor fixed-price, but if unforeseen technical challenges are anticipated, T&M or cost-plus might be chosen, necessitating stringent oversight to control costs.

What is Peraton Enterprise Solutions LLC's track record with the Department of the Treasury or similar agencies for IT services?

Peraton Enterprise Solutions LLC has a significant presence in the federal contracting space, including work with various agencies. Information regarding their specific track record with the Department of the Treasury and the Office of the Comptroller of the Currency (OCC) for IT services would require a deeper dive into contract databases like FPDS or SAM.gov. Generally, Peraton is known for providing a range of technology and mission support services to government clients. Assessing their past performance would involve reviewing past contract awards, performance evaluations (if publicly available), and any history of contract disputes or issues. Their ability to win a 'full and open competition' contract suggests they met the agency's requirements and demonstrated capability.

What are the potential risks associated with a 'second technical refresh' compared to an initial one?

A 'second technical refresh' can carry unique risks. Unlike an initial refresh that might address fundamental obsolescence, subsequent refreshes often deal with more nuanced integration challenges or the need to upgrade systems that were themselves part of a previous refresh cycle. There's a risk of 'refresh fatigue' if the underlying architecture isn't fundamentally sound, leading to diminishing returns. Integration complexity can increase as newer systems need to interface with existing infrastructure that may not have been part of the original plan. Furthermore, if the first refresh didn't fully address underlying issues, the second might be playing catch-up, potentially leading to scope creep and increased costs. Ensuring the refresh strategy is holistic and addresses long-term IT architecture is crucial.

How has federal spending on 'Other Computer Related Services' (NAICS 541519) trended over the past 5-10 years?

Federal spending on 'Other Computer Related Services' (NAICS 541519) has generally shown a consistent upward trend over the past decade, reflecting the government's increasing reliance on technology and outsourced IT expertise. This category often captures a wide array of services, including IT consulting, system integration, and specialized technical support that don't fit neatly into more defined categories like software development or network management. Factors driving this growth include the need for digital transformation initiatives, cybersecurity enhancements, cloud adoption, and the modernization of legacy systems across various federal agencies. While specific year-over-year fluctuations can occur due to budget cycles and shifting priorities, the overall trajectory indicates sustained demand for these types of services.

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: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Pricing Type: TIME AND MATERIALS (Y)

Evaluated Preference: NONE

Contractor Details

Parent Company: DXC Technology Company (UEI: 080521853)

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: $21,919,998

Exercised Options: $21,919,998

Current Obligation: $21,919,998

Contract Characteristics

Commercial Item: COMMERCIAL ITEM

Parent Contract

Parent Award PIID: TCC09HQD0033

IDV Type: IDC

Timeline