GSA's $9.57M EHRM contract to Peraton Enterprise Solutions for IT infrastructure faces scrutiny over value and competition

Contract Overview

Contract Amount: $9,570,963 ($9.6M)

Contractor: Peraton Enterprise Solutions LLC

Awarding Agency: General Services Administration

Start Date: 2021-09-26

End Date: 2026-09-25

Contract Duration: 1,825 days

Daily Burn Rate: $5.2K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 3

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: ELECTRONIC HEALTH RECORD MODERNIZATION EHRM INITIATIVES II

Place of Performance

Location: SEASIDE, MONTEREY County, CALIFORNIA, 93955

State: California Government Spending

Plain-Language Summary

General Services Administration obligated $9.6 million to PERATON ENTERPRISE SOLUTIONS LLC for work described as: ELECTRONIC HEALTH RECORD MODERNIZATION EHRM INITIATIVES II Key points: 1. The contract's value appears moderate for IT infrastructure, but a detailed benchmark is needed. 2. Limited public information on competition dynamics raises questions about price discovery. 3. The fixed-price contract type mitigates some cost overrun risks. 4. Performance context is lacking, making it difficult to assess the contractor's track record on this specific initiative. 5. This contract falls within the IT services sector, specifically data processing and hosting. 6. The absence of small business set-asides warrants further investigation into subcontracting opportunities.

Value Assessment

Rating: fair

Benchmarking this contract's value against similar IT infrastructure procurements for Electronic Health Record Modernization (EHRM) initiatives is challenging without more specific service details. The total award amount of $9.57 million over five years suggests a moderate scale. However, without a clear understanding of the specific services provided (e.g., cloud hosting, data processing, network support), a precise value-for-money assessment is difficult. Comparing the per-unit costs, if available, to industry standards for similar IT services would be a crucial next step.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, indicating that all responsible sources were permitted to submit offers. However, the number of bids received (3) is on the lower side for a federal contract of this nature. While full and open competition is generally preferred, a low number of bidders can sometimes suggest potential barriers to entry or a lack of robust market interest, which could impact price competitiveness.

Taxpayer Impact: A competitive process, even with a limited number of bidders, is generally beneficial for taxpayers as it encourages multiple companies to vie for the contract, potentially leading to better pricing and service offerings compared to sole-source awards.

Public Impact

The primary beneficiaries are likely federal agencies involved in electronic health record modernization, potentially improving data management and accessibility. Services delivered include computing infrastructure, data processing, and web hosting, crucial for modern IT systems. The geographic impact is primarily within California, where the contractor is located, but the services likely support federal operations nationwide. Workforce implications could involve IT specialists and support staff employed by the contractor to fulfill the contract's technical requirements.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Limited number of bidders (3) in a full and open competition could indicate potential market concentration or barriers.
Lack of detailed performance metrics makes it difficult to assess contractor effectiveness and value.
The specific nature of 'EHRM initiatives' requires further definition to fully understand the scope and criticality of the services.

Positive Signals

Awarded under full and open competition, adhering to principles of broad market access.
Firm Fixed Price contract type helps control costs and provides budget certainty.
The contract duration of five years allows for sustained support and potential for long-term IT infrastructure development.

Sector Analysis

This contract operates within the broader Information Technology (IT) sector, specifically focusing on computing infrastructure, data processing, and web hosting services. The market for these services is highly competitive, with numerous large and small providers. Federal spending in this area is substantial, driven by the need to modernize legacy systems and adopt cloud-based solutions. This contract appears to support the critical function of electronic health record modernization, a significant area of federal IT investment aimed at improving healthcare data management and interoperability.

Small Business Impact

The data indicates that this contract was not set aside for small businesses (ss: false, sb: false). This means that both large and small businesses were eligible to compete. While this allows for a wider pool of potential contractors, it also raises questions about subcontracting opportunities for small businesses. Further analysis would be needed to determine if Peraton Enterprise Solutions has a robust subcontracting plan to engage small businesses, which is crucial for fostering the small business ecosystem within federal contracting.

Oversight & Accountability

Oversight for this contract is likely managed by the General Services Administration (GSA) through its Federal Acquisition Service. The firm fixed-price nature of the contract provides a degree of financial oversight by establishing a set cost. Transparency is generally facilitated by the Federal Procurement Data System (FPDS), where contract awards are reported. However, specific oversight mechanisms related to performance monitoring, quality assurance, and potential Inspector General (IG) involvement would depend on the detailed terms within the contract itself and GSA's internal policies.

Related Government Programs

Electronic Health Record Systems
Federal Health IT Initiatives
Cloud Computing Services
Data Center Infrastructure
IT Modernization Programs

Risk Flags

Limited competition (3 bidders)
Lack of detailed performance metrics
Potential for vendor lock-in
Cybersecurity risks associated with health data

Frequently Asked Questions

What is this federal contract paying for?

General Services Administration awarded $9.6 million to PERATON ENTERPRISE SOLUTIONS LLC. ELECTRONIC HEALTH RECORD MODERNIZATION EHRM INITIATIVES II

Who is the contractor on this award?

The obligated recipient is PERATON ENTERPRISE SOLUTIONS LLC.

Which agency awarded this contract?

Awarding agency: General Services Administration (Federal Acquisition Service).

What is the total obligated amount?

The obligated amount is $9.6 million.

What is the period of performance?

Start: 2021-09-26. End: 2026-09-25.

What is Peraton Enterprise Solutions' track record with similar IT infrastructure contracts for federal health initiatives?

Assessing Peraton Enterprise Solutions' track record requires examining their past performance on contracts involving IT infrastructure, particularly those supporting federal health initiatives or Electronic Health Record Modernization (EHRM). While Peraton is a known entity in the federal contracting space, specific details on their success with similar large-scale IT projects are crucial. This would involve reviewing past performance evaluations, any reported contract disputes or terminations, and the scope and complexity of previous related work. Without this granular data, it's difficult to definitively gauge their capability and reliability for this specific EHRM contract. A review of their portfolio might reveal experience in areas like data center operations, cloud migration, or network management, which are foundational to EHRM infrastructure.

How does the awarded price compare to market rates for similar IT infrastructure services?

To compare the awarded price of $9.57 million to market rates, one would need to benchmark it against similar IT infrastructure procurements. This involves identifying comparable contracts awarded by other federal agencies or even state and local governments for services like computing infrastructure, data processing, and web hosting. Key metrics for comparison would include the cost per server, per gigabyte of storage, or per user for managed services. The contract's firm fixed-price nature provides some cost certainty, but understanding the underlying cost structure and profit margins relative to industry benchmarks is essential for a true value-for-money assessment. Without access to detailed service level agreements and unit pricing, a precise comparison remains challenging.

What are the primary risks associated with this contract, and how are they being mitigated?

Primary risks for this contract could include technical challenges in modernizing EHRM infrastructure, potential cybersecurity threats, vendor lock-in, and performance issues. Given the critical nature of health records, data breaches or system failures pose significant risks. Mitigation strategies often involve robust cybersecurity protocols, clear performance standards and Service Level Agreements (SLAs), contingency planning, and regular performance reviews. The firm fixed-price contract type helps mitigate financial risks related to cost overruns for the government. However, the specific risks and their mitigation plans are detailed within the contract's terms and conditions, which are not fully public.

How effective has the GSA's Federal Acquisition Service been in managing similar IT infrastructure contracts?

The effectiveness of the GSA's Federal Acquisition Service (FAS) in managing IT infrastructure contracts is generally considered strong, given their extensive experience and established procurement processes. FAS manages a vast portfolio of IT contracts, providing a wide range of services to federal agencies. Their success is often measured by their ability to facilitate timely procurements, ensure competitive pricing, and provide access to a broad range of IT solutions. However, like any large organization, there can be instances of challenges or inefficiencies. Evaluating FAS's effectiveness on this specific EHRM contract would require looking at performance metrics, user satisfaction from the benefiting agency, and adherence to procurement regulations and timelines.

What is the historical spending trend for EHRM-related IT infrastructure procurements by the federal government?

Historical spending on EHRM-related IT infrastructure has been on a significant upward trend as federal agencies, particularly the Department of Defense and the Department of Veterans Affairs, prioritize the modernization of their health record systems. This trend is driven by the need for interoperability, enhanced data security, improved patient care, and compliance with evolving healthcare regulations. Federal budgets allocated to health IT modernization have consistently grown over the past decade. This specific GSA contract, valued at $9.57 million, represents a component of this larger federal investment. Understanding the broader spending context helps in evaluating whether this contract's value is proportionate to the overall national effort in EHRM.

What are the implications of having only three bidders for this full and open competition?

Having only three bidders in a full and open competition for this IT infrastructure contract, while meeting the procedural requirements, can have several implications. It suggests that the market for this specific type of service, or the contract's requirements, may be more specialized than initially apparent, potentially limiting the number of capable vendors. This could lead to less aggressive pricing than if there were a larger pool of competitors. Furthermore, it might indicate potential barriers to entry for other firms, such as high qualification requirements, complex proposal processes, or the dominance of a few large players in this niche. For taxpayers, fewer bidders can mean a reduced likelihood of securing the absolute best value, although the competitive process still aims for a fair price.

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 - APLLICATIONS

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Solicitation ID: 47QFMA21Q0025

Offers Received: 3

Pricing Type: FIRM FIXED PRICE (J)

Contractor Details

Parent Company: Veritas Capital Fund Management, L.L.C.

Address: 13600 EDS DR A3S, HERNDON, VA, 20171

Business Categories: Category Business, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $19,191,166

Exercised Options: $12,186,166

Current Obligation: $9,570,963

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Parent Contract

Parent Award PIID: GS03Q17DSA0008

IDV Type: BPA

Timeline