Treasury's IRS awarded $29.1M for enterprise IT support, with Peraton Inc. as the prime contractor
Contract Overview
Contract Amount: $29,134,249 ($29.1M)
Contractor: Peraton Inc.
Awarding Agency: Department of the Treasury
Start Date: 2018-10-23
End Date: 2020-05-24
Contract Duration: 579 days
Daily Burn Rate: $50.3K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 1
Pricing Type: COST PLUS FIXED FEE
Sector: IT
Official Description: TECHNICAL SUPPORT FOR ENTERPRISE SERVICES, ENTERPRISE SYSTEMS TESTING (EST)
Place of Performance
Location: LANHAM, PRINCE GEORGES County, MARYLAND, 20706
State: Maryland Government Spending
Plain-Language Summary
Department of the Treasury obligated $29.1 million to PERATON INC. for work described as: TECHNICAL SUPPORT FOR ENTERPRISE SERVICES, ENTERPRISE SYSTEMS TESTING (EST) Key points: 1. The contract value of $29.1M for enterprise IT support over approximately 1.9 years suggests a significant investment in maintaining critical systems. 2. Competition dynamics for this contract were full and open, indicating a potentially robust market for these services. 3. The contract type (Cost Plus Fixed Fee) can sometimes lead to cost overruns if not closely managed, posing a potential risk. 4. Performance context is crucial, as the effectiveness of enterprise systems testing directly impacts the IRS's operational efficiency. 5. This contract falls within the IT services sector, specifically computer systems design, a vital area for government operations.
Value Assessment
Rating: fair
The contract value of $29.1M for approximately 579 days of service averages to roughly $50,318 per day. Benchmarking this against similar enterprise IT support contracts is challenging without more specific service details. However, the Cost Plus Fixed Fee (CPFF) structure, while providing flexibility, can sometimes result in higher overall costs compared to fixed-price contracts if scope creep or unforeseen complexities arise. The award amount appears substantial for the duration, warranting scrutiny of the delivered value.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
The contract was awarded under full and open competition, suggesting that multiple vendors had the opportunity to bid. The presence of only one award (no: 1) indicates that Peraton Inc. was selected as the sole awardee from the competitive pool. This level of competition is generally positive for price discovery, as it allows the government to solicit proposals from various qualified sources.
Taxpayer Impact: A full and open competition generally benefits taxpayers by fostering a competitive environment that can drive down prices and encourage innovation from multiple vendors.
Public Impact
Taxpayers benefit from the reliable operation and testing of enterprise systems that support tax administration. The services delivered include technical support for enterprise services and enterprise systems testing, crucial for IRS functionality. The geographic impact is primarily national, supporting the IRS's nationwide operations. Workforce implications may include the need for skilled IT professionals within Peraton Inc. to fulfill the contract requirements.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Cost Plus Fixed Fee contracts require diligent oversight to manage potential cost escalations.
- The duration of the contract (579 days) is relatively short for enterprise-level IT support, potentially leading to transition costs if not managed effectively.
- Lack of specific performance metrics in the provided data makes it difficult to assess the true value for money.
- The 'MD' (Maryland) state code might indicate a concentration of work or contractor presence, but further detail is needed.
Positive Signals
- Awarded under full and open competition, suggesting a competitive bidding process.
- The contract addresses critical IT infrastructure for the IRS, indicating a focus on essential government functions.
- Peraton Inc. is a known entity in the government contracting space, potentially bringing established expertise.
Sector Analysis
This contract falls within the Information Technology (IT) sector, specifically under Computer Systems Design Services. The IT services market for the federal government is substantial, with agencies heavily reliant on robust systems for operations. Comparable spending benchmarks would typically involve analyzing other large-scale IT support and testing contracts awarded by agencies like the IRS or other Treasury bureaus, looking at contract values, durations, and service scopes to gauge value for money.
Small Business Impact
The data indicates that this contract was not set aside for small businesses (sb: false) and there is no specific mention of subcontracting plans for small businesses. This suggests that the primary awardee, Peraton Inc., likely handled the majority of the work internally or through larger partners, with limited direct impact on the small business ecosystem for this specific award.
Oversight & Accountability
Oversight for this contract would typically fall under the Department of the Treasury's Inspector General and the contracting officers within the Internal Revenue Service. Accountability measures would be defined in the contract's terms and conditions, including performance standards and reporting requirements. Transparency is facilitated through contract award databases like FPDS, where basic details are publicly available.
Related Government Programs
- IRS Enterprise Systems Modernization
- Federal Civilian IT Modernization Programs
- Department of the Treasury IT Services Contracts
- Computer Systems Design Services Federal Contracts
Risk Flags
- Cost Plus Fixed Fee contract type requires diligent oversight to manage potential cost overruns.
- Limited duration (579 days) may necessitate careful transition planning and could incur additional costs if not managed efficiently.
- Lack of specific performance metrics in the provided data hinders a comprehensive value-for-money assessment.
Tags
it-services, computer-systems-design, department-of-the-treasury, internal-revenue-service, peraton-inc, full-and-open-competition, delivery-order, cost-plus-fixed-fee, enterprise-it-support, enterprise-systems-testing, maryland, federal-contract
Frequently Asked Questions
What is this federal contract paying for?
Department of the Treasury awarded $29.1 million to PERATON INC.. TECHNICAL SUPPORT FOR ENTERPRISE SERVICES, ENTERPRISE SYSTEMS TESTING (EST)
Who is the contractor on this award?
The obligated recipient is PERATON INC..
Which agency awarded this contract?
Awarding agency: Department of the Treasury (Internal Revenue Service).
What is the total obligated amount?
The obligated amount is $29.1 million.
What is the period of performance?
Start: 2018-10-23. End: 2020-05-24.
What is Peraton Inc.'s track record with the IRS and similar federal agencies for enterprise IT support?
Peraton Inc. has a significant history of contracting with various U.S. federal agencies, including the Department of the Treasury and the IRS, across a range of IT and technical services. Their portfolio often includes complex system integration, cybersecurity, and enterprise IT support. For the IRS specifically, Peraton has been involved in contracts related to tax systems modernization, data management, and infrastructure support. Their broader federal experience suggests a capacity to handle large-scale IT operations. However, a detailed analysis would require examining past performance evaluations, any past disputes or contract modifications, and the specific outcomes of their previous engagements with the IRS to fully assess their suitability and reliability for this particular enterprise services contract.
How does the $29.1M contract value compare to similar enterprise IT support contracts awarded by the IRS or other large federal agencies?
The $29.1 million contract value for approximately 579 days (about 1.9 years) of enterprise IT support and testing services, awarded to Peraton Inc. by the IRS, needs context for a precise comparison. On average, this equates to roughly $50,318 per day. Large federal agencies, particularly those with complex IT infrastructures like the IRS, often award multi-year, multi-million dollar contracts for enterprise IT support. For instance, similar contracts for system design, integration, maintenance, and testing can range from tens to hundreds of millions of dollars depending on the scope, duration, and criticality of the systems involved. Without specific details on the exact services rendered, number of users supported, and complexity of the enterprise systems, a direct benchmark is difficult. However, the award appears to be within the typical range for substantial IT support contracts within the federal government.
What are the primary risks associated with a Cost Plus Fixed Fee (CPFF) contract for enterprise IT services?
Cost Plus Fixed Fee (CPFF) contracts, like the one awarded to Peraton Inc. for IRS enterprise IT services, present specific risks. The primary risk for the government is the potential for cost overruns. While the 'fixed fee' component provides a ceiling on the contractor's profit, the 'cost plus' element means the government reimburses the contractor for allowable costs incurred. If the contractor's costs exceed initial estimates due to unforeseen complexities, scope creep, or inefficiencies, the total contract price can increase significantly. This necessitates robust government oversight to scrutinize incurred costs, ensure they are reasonable and allocable, and manage any changes to the contract scope. For the contractor, the risk lies in accurately estimating costs to ensure the fixed fee remains profitable, especially if unforeseen challenges arise.
How effective is 'full and open competition' in ensuring value for money for IT services contracts of this magnitude?
Full and open competition is generally considered the most effective method for ensuring value for money in federal IT services contracts. By allowing all responsible sources to submit bids, it maximizes the pool of potential offerors, thereby increasing the likelihood of receiving competitive pricing and innovative solutions. This competitive pressure incentivizes contractors to propose efficient approaches and realistic cost structures to win the contract. For a contract of this magnitude ($29.1M) supporting critical IRS enterprise systems, a broad competition allows the government to compare diverse technical approaches and pricing models. While the ultimate value depends on the quality of proposals received and the effectiveness of the source selection process, the principle of broad competition inherently promotes better price discovery and a stronger likelihood of obtaining services that meet both technical requirements and budgetary constraints.
What is the historical spending pattern for enterprise IT support and testing services at the IRS over the last 5 fiscal years?
Analyzing historical spending patterns for enterprise IT support and testing services at the IRS over the last five fiscal years would provide crucial context for the $29.1M award to Peraton Inc. This would involve examining contract databases (like FPDS) to identify all contracts awarded for similar services, noting the total dollar amounts, contract types, awardees, and durations. Trends in spending could reveal whether the IRS is increasing or decreasing its investment in these areas, whether specific vendors have dominated the market, or if there's a shift towards different types of IT support. For example, a rising trend might indicate growing system complexity or modernization efforts, while a stable or declining trend could suggest system maturity or consolidation. Understanding these patterns helps assess if the current award is consistent with past investments or represents a significant change in strategy or budget allocation for critical IT functions.
What are the implications of the 'Delivery Order' (aw: DELIVERY ORDER) award type for this contract?
The 'Delivery Order' (aw: DELIVERY ORDER) award type signifies that this contract is likely a task order issued under a larger, pre-existing indefinite-delivery, indefinite-quantity (IDIQ) contract or a similar multiple-award contract vehicle. This means that the $29.1M represents the value of a specific order placed against a broader contract that allows for multiple orders over its lifetime. The benefit of this structure is flexibility; the government can order services as needed, up to a certain ceiling. For the IRS, it allows them to procure enterprise IT support and testing services incrementally. For Peraton Inc., it signifies they were one of potentially multiple awardees on a larger IDIQ contract, and this specific order represents a defined scope of work and funding. The 'Delivery Order' itself doesn't inherently imply risk or benefit beyond its procedural nature, but the underlying IDIQ contract's terms and competition level are critical.
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: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY
Solicitation ID: 4358
Offers Received: 1
Pricing Type: COST PLUS FIXED FEE (U)
Evaluated Preference: NONE
Contractor Details
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: $36,991,343
Exercised Options: $36,991,343
Current Obligation: $29,134,249
Actual Outlays: $12,374,137
Subaward Activity
Number of Subawards: 192
Total Subaward Amount: $34,191,492
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: NO
Parent Contract
Parent Award PIID: GS00Q09BGD0056
IDV Type: GWAC
Timeline
Start Date: 2018-10-23
Current End Date: 2020-05-24
Potential End Date: 2026-09-29 11:26:46
Last Modified: 2025-09-29
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