Commerce Department's $38M SIMS contract awarded to Peraton Inc. with no competition
Contract Overview
Contract Amount: $38,289,523 ($38.3M)
Contractor: Peraton Inc.
Awarding Agency: Department of Commerce
Start Date: 2024-12-07
End Date: 2026-12-06
Contract Duration: 729 days
Daily Burn Rate: $52.5K/day
Competition Type: NOT COMPETED
Number of Offers Received: 1
Pricing Type: FIRM FIXED PRICE
Sector: IT
Official Description: STORAGE INFRASTRUCTURE MANAGED SERVICES (SIMS)
Place of Performance
Location: HERNDON, FAIRFAX County, VIRGINIA, 20170
State: Virginia Government Spending
Plain-Language Summary
Department of Commerce obligated $38.3 million to PERATON INC. for work described as: STORAGE INFRASTRUCTURE MANAGED SERVICES (SIMS) Key points: 1. The contract's value of $38.3 million over two years raises questions about potential overspending due to the lack of competition. 2. Awarding a sole-source contract for storage infrastructure management services limits opportunities for market-driven price discovery and innovation. 3. The absence of a competitive bidding process presents a significant risk indicator for ensuring optimal value for taxpayer dollars. 4. This contract's performance context is crucial, as the USPTO relies on robust storage infrastructure for its patent and trademark operations. 5. Peraton Inc. operates within the IT infrastructure and data processing sector, a critical area for government operations. 6. The firm-fixed-price contract type aims to control costs, but the lack of competition undermines this objective. 7. The contract duration of approximately two years provides a defined period for service delivery and oversight.
Value Assessment
Rating: questionable
Benchmarking the value of this $38.3 million contract is challenging without competitive data. The lack of competition suggests that the government may not have secured the most favorable pricing or terms. Comparing this to similar managed storage infrastructure contracts would be necessary to assess if the price is aligned with market rates for comparable services. The absence of multiple bids prevents a clear assessment of whether Peraton's pricing reflects a competitive market or a premium due to a sole-source award.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was awarded on a sole-source basis, meaning no other vendors were solicited or considered. This approach bypasses the standard competitive procurement process, which typically involves soliciting bids from multiple qualified contractors. The lack of competition means there were no alternative proposals to evaluate, and no direct price comparison from other market participants. This significantly reduces the government's leverage in negotiating terms and pricing.
Taxpayer Impact: Taxpayers are at a disadvantage as the absence of competition means the government could be paying more than necessary for these services. Without competing bids, there's no market pressure to drive down costs or encourage innovative, cost-effective solutions.
Public Impact
The U.S. Patent and Trademark Office (USPTO) is the primary beneficiary, ensuring the continuity and integrity of its critical data storage. Services delivered include the management of essential storage infrastructure, vital for the USPTO's operational efficiency. The geographic impact is primarily within the United States, supporting federal government operations. This contract supports a workforce involved in IT infrastructure management and data services, likely within Peraton Inc. and potentially subcontractors.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Lack of competition raises concerns about potential overpricing and reduced value for taxpayer money.
- Sole-source awards can stifle innovation by not exposing the government to a wider range of solutions.
- Oversight is critical to ensure Peraton Inc. meets all performance requirements and delivers value despite the lack of competition.
Positive Signals
- The firm-fixed-price contract type provides cost certainty for the government, assuming the scope is well-defined.
- The contract is for a defined period, allowing for reassessment and potential competition in future procurements.
- The USPTO's reliance on this infrastructure highlights its importance, suggesting a focus on reliable service delivery.
Sector Analysis
The IT infrastructure and data processing sector is a vast and critical component of government operations. This contract falls under computing infrastructure providers, data processing, web hosting, and related services. The market for managed storage solutions is competitive, with numerous providers offering a range of services. However, sole-source awards like this bypass typical market dynamics, preventing direct comparison with industry benchmarks for similar managed services.
Small Business Impact
This contract does not appear to have a small business set-aside component, as indicated by 'ss': false. Furthermore, there is no explicit mention of subcontracting requirements for small businesses. This suggests that small businesses may not directly benefit from this specific award, and their participation in the subcontracting chain is not mandated by the contract terms. This could limit opportunities for small businesses within this particular procurement.
Oversight & Accountability
Oversight for this contract will likely be managed by the Department of Commerce and the U.S. Patent and Trademark Office contracting officers and program managers. Accountability measures would be tied to the performance work statement and the firm-fixed-price terms. Transparency is limited due to the sole-source nature of the award, making public scrutiny of the procurement process difficult. Inspector General jurisdiction would apply if any fraud, waste, or abuse is suspected.
Related Government Programs
- General Services Administration (GSA) IT Schedule contracts
- Cloud computing services procurements
- Data center operations and maintenance contracts
- IT managed services contracts across federal agencies
Risk Flags
- Lack of Competition
- Potential for Overpricing
- Limited Transparency
- Sole-Source Award
Tags
it-services, storage-infrastructure, managed-services, department-of-commerce, uspto, sole-source, definitive-contract, firm-fixed-price, peraton-inc, virginia, computing-infrastructure-providers, data-processing
Frequently Asked Questions
What is this federal contract paying for?
Department of Commerce awarded $38.3 million to PERATON INC.. STORAGE INFRASTRUCTURE MANAGED SERVICES (SIMS)
Who is the contractor on this award?
The obligated recipient is PERATON INC..
Which agency awarded this contract?
Awarding agency: Department of Commerce (U.S. Patent and Trademark Office).
What is the total obligated amount?
The obligated amount is $38.3 million.
What is the period of performance?
Start: 2024-12-07. End: 2026-12-06.
What is Peraton Inc.'s track record with the federal government, particularly in providing storage infrastructure management services?
Peraton Inc. has a significant history of federal contracting across various agencies and service areas, including IT, defense, and intelligence. They have been involved in numerous large-scale contracts, often in complex and mission-critical environments. While specific details on their performance for storage infrastructure management services under this particular contract are not yet available due to its recent award, Peraton's broader federal experience suggests they possess the technical capabilities. However, a comprehensive review would require examining past performance evaluations, contract awards, and any reported issues on previous, similar engagements to fully assess their suitability and historical performance in this specific domain.
How does the $38.3 million contract value compare to similar managed storage infrastructure services procured by the government?
Direct comparison of the $38.3 million contract value is difficult without knowing the exact scope, duration, and service level agreements. However, the lack of competition for this two-year contract awarded to Peraton Inc. by the USPTO raises concerns about value for money. Typically, competitive procurements for managed storage solutions can range significantly based on data volume, performance requirements, and included services. Without competitive bids, it's impossible to benchmark if this price is at, above, or below market rates. A thorough analysis would involve identifying comparable contracts, adjusting for differences in scale and service, and assessing the pricing structure against industry standards.
What are the primary risks associated with awarding a sole-source contract for critical IT infrastructure services?
The primary risks of a sole-source award for critical IT infrastructure services like storage management include potential overpricing, reduced innovation, and a lack of vendor accountability. Without competition, the government loses the leverage to negotiate the best possible price and terms, potentially leading to higher costs for taxpayers. The absence of multiple bidders can also limit the exposure to innovative solutions or more efficient service delivery models that competitors might offer. Furthermore, a sole-source vendor may face less pressure to maintain high service levels or proactively improve performance, as the government has fewer immediate alternatives.
How effective is the firm-fixed-price contract type in managing costs for storage infrastructure services, especially in a sole-source scenario?
The firm-fixed-price (FFP) contract type is designed to provide cost certainty by fixing the price regardless of the contractor's actual costs. This can be effective in managing costs when the scope of work is well-defined and stable, as it shifts the risk of cost overruns to the contractor. However, in a sole-source scenario, the effectiveness of FFP in achieving the *best* value is diminished. While the price is fixed, the government may have agreed to a higher initial price due to the lack of competition. Therefore, while FFP provides budget predictability, it doesn't guarantee cost savings or optimal value when competition is absent.
What are the historical spending patterns for storage infrastructure management services at the U.S. Patent and Trademark Office?
Analyzing historical spending patterns for storage infrastructure management services at the U.S. Patent and Trademark Office (USPTO) is crucial for context. Without specific historical data for this contract, we can infer that the USPTO, as a large government agency managing vast amounts of intellectual property data, would have ongoing needs for robust and secure storage solutions. Past procurements might reveal trends in contract values, durations, and the types of services sought. Understanding whether previous contracts were competed, sole-sourced, or awarded to different vendors would provide insight into the agency's procurement strategies and the evolution of its storage infrastructure needs and associated spending over time.
What are the implications of this contract award on the broader market for IT infrastructure providers?
This sole-source award to Peraton Inc. for storage infrastructure management services has limited direct implications for the broader IT infrastructure market in terms of stimulating competition or innovation. It represents a specific instance where the government opted not to compete a requirement. However, it could signal to other vendors that sole-source opportunities may arise under certain circumstances, potentially influencing their business development strategies. For the market segment focused on managed storage, this contract highlights the ongoing demand from federal agencies. The lack of competition, however, means that the broader market's competitive dynamics and pricing efficiencies are not being leveraged in this particular instance.
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 › IT AND TELECOM - STORAGE
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: Veritas Capital Fund Management, L.L.C.
Address: 12975 WORLDGATE DR STE 7322, HERNDON, VA, 20170
Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $52,500,789
Exercised Options: $38,289,523
Current Obligation: $38,289,523
Subaward Activity
Number of Subawards: 2
Total Subaward Amount: $5,789,892
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES
Cost or Pricing Data: NO
Timeline
Start Date: 2024-12-07
Current End Date: 2026-12-06
Potential End Date: 2027-12-06 00:00:00
Last Modified: 2026-03-13
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