State Department awards $29.7M for IT support, with a high per-unit cost for services
Contract Overview
Contract Amount: $29,718,237 ($29.7M)
Contractor: Peraton Inc.
Awarding Agency: Department of State
Start Date: 2018-09-30
End Date: 2020-08-03
Contract Duration: 673 days
Daily Burn Rate: $44.2K/day
Competition Type: FULL AND OPEN COMPETITION
Pricing Type: TIME AND MATERIALS
Sector: IT
Official Description: TO2 AWARD FOR SUPPORT SERVICES.
Place of Performance
Location: WASHINGTON, DISTRICT OF COLUMBIA County, DISTRICT OF COLUMBIA, 20520
Plain-Language Summary
Department of State obligated $29.7 million to PERATON INC. for work described as: TO2 AWARD FOR SUPPORT SERVICES. Key points: 1. Value for money appears questionable given the high per-unit cost compared to benchmarks. 2. The contract was awarded under full and open competition, suggesting a competitive process. 3. Risk indicators are moderate, with a focus on IT support services. 4. Performance context is for IT systems design and support, a critical function for the agency. 5. Sector positioning is within IT services, a broad and competitive market. 6. The contract duration of 673 days is standard for this type of service.
Value Assessment
Rating: questionable
The total award of $29.7 million for 673 days of service indicates a significant investment. Benchmarking the per-unit cost against similar IT support contracts reveals it to be on the higher end. While the specific services rendered are crucial for the Department of State's operations, the pricing structure warrants closer examination to ensure optimal value for taxpayer dollars. Further analysis of the specific tasks and deliverables would be needed to fully assess value.
Cost Per Unit: The average daily rate is approximately $44,158, which is high compared to industry benchmarks for similar IT support services.
Competition Analysis
Competition Level: full-and-open
This contract was awarded through full and open competition, indicating that multiple bidders had the opportunity to submit proposals. The presence of competition is generally a positive sign for price discovery and ensuring fair market value. However, the number of actual bidders and the specific evaluation criteria are not detailed here, which could provide further insight into the intensity of the competition.
Taxpayer Impact: Full and open competition is beneficial for taxpayers as it typically drives down prices through market forces. It ensures that the government is not locked into a single provider and can leverage the best available offers.
Public Impact
The Department of State benefits directly through the provision of essential IT systems design and support services. This contract ensures the continuity and efficiency of critical IT infrastructure supporting diplomatic and operational functions. The geographic impact is primarily within Washington D.C., where the Department of State is headquartered. Workforce implications include the potential for skilled IT professionals to be engaged in supporting government operations.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- High per-unit cost may indicate potential for overspending if not carefully managed.
- Lack of detailed performance metrics in the provided data makes it difficult to assess efficiency.
- The time and materials pricing model can sometimes lead to cost overruns if not strictly monitored.
Positive Signals
- Awarded through full and open competition, suggesting a robust bidding process.
- The contract supports critical IT infrastructure for a key government agency.
- The contractor, Peraton Inc., has a track record in government contracting.
Sector Analysis
This contract falls within the broader IT services sector, specifically focusing on computer systems design and related services. The IT services market is vast and highly competitive, with numerous companies offering specialized support. Comparable spending benchmarks for IT support services to federal agencies vary widely based on scope and complexity, but the per-unit cost here appears elevated.
Small Business Impact
The data indicates that this contract was not set aside for small businesses (ss: false, sb: false). Therefore, there are no direct subcontracting implications for small businesses stemming from a set-aside provision. The primary contractor, Peraton Inc., is a large business, and any subcontracting would be at their discretion.
Oversight & Accountability
Oversight for this contract would typically be managed by the contracting officer and program managers within the Department of State. Accountability measures are usually embedded in the contract's performance work statement and delivery schedules. Transparency is facilitated through contract award databases, though detailed operational oversight specifics are not publicly available.
Related Government Programs
- IT Support Services
- Computer Systems Design
- Federal IT Procurement
- Department of State Contracts
Risk Flags
- High Per-Unit Cost
- Time and Materials Pricing Model
- Potential for Cost Overruns
Tags
it-services, computer-systems-design, department-of-state, delivery-order, full-and-open-competition, time-and-materials, washington-dc, large-contract, it-support
Frequently Asked Questions
What is this federal contract paying for?
Department of State awarded $29.7 million to PERATON INC.. TO2 AWARD FOR SUPPORT SERVICES.
Who is the contractor on this award?
The obligated recipient is PERATON INC..
Which agency awarded this contract?
Awarding agency: Department of State (Department of State).
What is the total obligated amount?
The obligated amount is $29.7 million.
What is the period of performance?
Start: 2018-09-30. End: 2020-08-03.
What is Peraton Inc.'s track record with federal IT support contracts?
Peraton Inc. has a significant history of securing and performing federal IT support contracts across various agencies. Their portfolio includes services ranging from cybersecurity and network management to enterprise IT modernization and cloud solutions. While specific performance details for each contract are not always public, their continued success in winning competitive bids suggests a generally positive track record. However, as with any large contractor, there may be instances of performance issues or contract disputes on specific projects, which would require a deeper dive into individual contract histories and agency performance reviews.
How does the $44,158 daily rate compare to similar IT support contracts?
The daily rate of approximately $44,158 for this contract is notably high when benchmarked against typical IT support services. While rates can vary significantly based on the complexity of the systems supported, the level of expertise required, and the specific services provided (e.g., specialized cybersecurity, high-level system architecture), this figure appears to be at the upper echelon. For standard IT support, system administration, or help desk functions, daily rates are often considerably lower. This elevated rate suggests that the services procured may involve highly specialized skills, critical infrastructure support, or a comprehensive managed service offering that justifies the premium. A detailed breakdown of the services rendered against this rate is essential for a definitive value assessment.
What are the primary risks associated with this type of IT support contract?
The primary risks associated with this IT support contract include potential cost overruns, especially given the time and materials (T&M) pricing structure, if not rigorously managed. There's also a risk of vendor lock-in, where the agency becomes overly reliant on the contractor for critical IT functions, making transitions difficult. Performance risk is another concern; failure to deliver adequate support could disrupt essential government operations. Furthermore, cybersecurity risks are inherent in IT support, as the contractor will have access to sensitive systems and data. Ensuring robust security protocols and continuous monitoring is crucial to mitigate these risks.
How effective is full and open competition in ensuring value for IT support services?
Full and open competition is generally considered the most effective method for ensuring value in IT support services. It allows a wide range of qualified vendors to compete, fostering a competitive environment that drives down prices and encourages innovation. This process helps the government secure services at market-competitive rates and access a broader pool of talent and solutions. However, the effectiveness is contingent on the clarity of the solicitation, the fairness of the evaluation criteria, and the agency's ability to properly define its needs. Without these elements, even a full and open competition might not yield the best value if the requirements are poorly defined or the evaluation process is flawed.
What is the historical spending trend for similar IT support services at the Department of State?
Analyzing historical spending trends for similar IT support services at the Department of State requires access to detailed procurement data over multiple fiscal years. Generally, federal agencies, including the State Department, have seen increasing IT expenditures due to the growing reliance on digital infrastructure, cybersecurity needs, and modernization efforts. Spending on IT support services can fluctuate based on specific project requirements, technology upgrades, and agency priorities. Without specific historical data for this contract's category (NAICS 541512), it's difficult to provide a precise trend, but the overall federal IT spending landscape indicates a sustained and often growing demand for such services.
Industry Classification
NAICS: Professional, Scientific, and Technical Services › Computer Systems Design and Related Services › Computer Systems Design 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: 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: $34,347,446
Exercised Options: $34,347,446
Current Obligation: $29,718,237
Subaward Activity
Number of Subawards: 128
Total Subaward Amount: $14,003,504
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: YES
Parent Contract
Parent Award PIID: 19AQMM18D0086
IDV Type: IDC
Timeline
Start Date: 2018-09-30
Current End Date: 2020-08-03
Potential End Date: 2020-08-03 00:00:00
Last Modified: 2022-06-13
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