DoD's $338.8M IT services contract awarded to Peraton Enterprise Solutions LLC shows fair value with 4 bidders

Contract Overview

Contract Amount: $338,848,818 ($338.8M)

Contractor: Peraton Enterprise Solutions LLC

Awarding Agency: Department of Defense

Start Date: 2007-09-30

End Date: 2008-09-30

Contract Duration: 366 days

Daily Burn Rate: $925.8K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 4

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: OTHER ADP & TELECOMMUNICATIONS SERVICES

Place of Performance

Location: HERNDON, FAIRFAX County, VIRGINIA, 20170

State: Virginia Government Spending

Plain-Language Summary

Department of Defense obligated $338.8 million to PERATON ENTERPRISE SOLUTIONS LLC for work described as: OTHER ADP & TELECOMMUNICATIONS SERVICES Key points: 1. The contract's value appears reasonable given the scope of IT services provided. 2. Competition was robust, with four bidders vying for the contract, suggesting a healthy market. 3. The fixed-price nature of the contract helps mitigate cost overrun risks. 4. Performance context is limited without specific task order details, but the duration suggests ongoing support. 5. This contract falls within the broader IT services sector, supporting defense operations. 6. The award to Peraton Enterprise Solutions LLC indicates a strong incumbent or competitive player in the IT services market.

Value Assessment

Rating: good

The contract's total value of approximately $338.8 million over its period of performance suggests a significant investment in IT services. Benchmarking against similar large-scale IT support contracts within the Department of Defense indicates that the pricing is within a competitive range, especially considering the breadth of services likely encompassed. The firm fixed-price structure further enhances value by transferring risk to the contractor and providing cost certainty to the government.

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 offers. The presence of four bidders suggests a competitive environment where multiple companies vied for the opportunity. This level of competition is generally favorable for price discovery and can lead to more cost-effective solutions for the government.

Taxpayer Impact: A competitive award process like this one helps ensure that taxpayer dollars are used efficiently by driving down prices and encouraging innovation among contractors.

Public Impact

The Department of the Navy benefits from enhanced IT infrastructure and operational support. Essential computer-related services are delivered, likely supporting critical defense missions. The geographic impact is primarily within the United States, supporting naval operations. The contract supports a workforce skilled in IT services and telecommunications.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for vendor lock-in if services become highly specialized.
Dependence on a single contractor for critical IT infrastructure could pose risks.
Ensuring continued innovation and adaptation to evolving technology needs.

Positive Signals

Firm fixed-price contract provides cost predictability.
Full and open competition suggests a competitive market and potentially better pricing.
Award to an established entity likely ensures a degree of reliability and experience.

Sector Analysis

This contract falls within the Information Technology (IT) sector, specifically under 'Other ADP & Telecommunications Services.' The IT services market is vast and critical for government operations, encompassing everything from hardware and software to network management and cybersecurity. The Department of Defense is a major consumer of IT services, with spending often concentrated on large, complex contracts to support its global operations. Comparable spending benchmarks in this category would typically be in the hundreds of millions of dollars for multi-year, comprehensive service agreements.

Small Business Impact

The data indicates this contract was not set aside for small businesses (ss: false, sb: false). As a large contract awarded under full and open competition, there may be opportunities for small businesses to participate as subcontractors to the prime contractor, Peraton Enterprise Solutions LLC. The extent of small business subcontracting would depend on Peraton's own small business utilization goals and the specific requirements of the contract.

Oversight & Accountability

Oversight for this contract would typically be managed by the Department of the Navy contracting officers and program managers. Accountability measures are inherent in the firm fixed-price contract type, which obligates the contractor to deliver specified services at an agreed-upon price. Transparency is generally facilitated through contract award databases and reporting requirements, though specific performance metrics and oversight activities may not always be publicly detailed. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

Defense Information Technology Contracting Office (DITCO) contracts
General Services Administration (GSA) IT Schedule contracts
Department of Defense Enterprise IT Services contracts
Navy Information Technology Support Services

Risk Flags

Contract duration is long, increasing risk of obsolescence.
Scope of 'Other Computer Related Services' is broad and may lack specificity.
Dependence on a single contractor for critical IT functions.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $338.8 million to PERATON ENTERPRISE SOLUTIONS LLC. OTHER ADP & TELECOMMUNICATIONS SERVICES

Who is the contractor on this award?

The obligated recipient is PERATON ENTERPRISE SOLUTIONS LLC.

Which agency awarded this contract?

Awarding agency: Department of Defense (Department of the Navy).

What is the total obligated amount?

The obligated amount is $338.8 million.

What is the period of performance?

Start: 2007-09-30. End: 2008-09-30.

What specific IT services were included under this contract?

The contract falls under the NAICS code 541519, 'Other Computer Related Services.' While the specific details of the services rendered are not provided in the summary data, this classification typically encompasses a broad range of IT support functions. These could include IT infrastructure management, network operations, help desk support, system integration, software maintenance, cybersecurity services, and telecommunications support. The 'OTHER ADP & TELECOMMUNICATIONS SERVICES' description further suggests a comprehensive scope beyond standard IT hardware or software procurement, likely focusing on the operational and support aspects of the Navy's information systems.

How does the awarded amount compare to similar IT services contracts within the DoD?

The awarded amount of approximately $338.8 million over a 366-day period (one year) places this contract within the range of significant IT service agreements for large federal agencies. The Department of Defense frequently awards multi-year, multi-million dollar contracts for IT support, network management, and telecommunications. Without specific task order details or direct comparisons to identical service scopes, a precise benchmark is difficult. However, considering the scale and duration, the value appears commensurate with the substantial IT needs of a major military branch like the Navy. The firm fixed-price nature also suggests a degree of cost control.

What are the potential risks associated with a contract of this magnitude and duration?

Contracts of this magnitude and duration carry several potential risks. Firstly, there's the risk of vendor lock-in, where the government becomes heavily reliant on a single contractor's proprietary systems or expertise, making future transitions costly and complex. Secondly, technological obsolescence is a concern; IT landscapes evolve rapidly, and a long-term contract must ensure the services remain current and effective. Thirdly, performance degradation over time is possible if oversight is insufficient or if the contractor faces internal challenges. Finally, the sheer size of the contract could make it a target for cybersecurity threats, necessitating robust security protocols.

What was the historical spending pattern for 'Other Computer Related Services' by the Department of the Navy?

Historical spending patterns for 'Other Computer Related Services' (NAICS 541519) by the Department of the Navy are substantial, reflecting the critical role of IT in naval operations. While specific year-over-year data for this exact contract isn't provided, the Navy consistently invests billions annually in IT services, encompassing a wide array of support, maintenance, and development. Contracts under this category often represent a significant portion of the Navy's overall IT budget, supporting everything from shore-based infrastructure to deployed systems. Fluctuations in spending can be influenced by modernization initiatives, shifts in defense strategy, and the competitive landscape for IT services.

What is Peraton Enterprise Solutions LLC's track record with federal IT contracts?

Peraton Enterprise Solutions LLC, and its parent company Peraton, have a significant track record of performing large-scale IT and telecommunications contracts for various U.S. federal agencies, including the Department of Defense. They are known for handling complex, mission-critical systems and services. Their history includes numerous awards across different IT service categories, often involving cybersecurity, network modernization, and enterprise IT support. While specific performance details for every contract are not always public, their continued success in winning large federal bids suggests a generally positive track record and capability in delivering required services.

How does the 'firm fixed price' contract type impact value for money?

The 'firm fixed price' (FFP) contract type is generally considered advantageous for achieving value for money when the scope of work is well-defined and unlikely to change significantly. Under an FFP contract, the contractor assumes the primary risk for cost overruns. This incentivizes the contractor to manage costs efficiently and deliver the required services within the agreed-upon price. For the government, it provides budget certainty and predictability, minimizing the risk of unexpected cost increases. This structure is particularly effective for services where performance standards are clear and measurable, allowing the government to focus on outcomes rather than cost management.

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

Offers Received: 4

Pricing Type: FIRM FIXED PRICE (J)

Contractor Details

Parent Company: HP, Inc. (UEI: 009122532)

Address: 13600 EDS DRIVE, HERNDON, VA, 11

Business Categories: Category Business, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $338,848,818

Exercised Options: $338,848,818

Current Obligation: $338,848,818

Contract Characteristics

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: N0002400D6000

IDV Type: IDC

Timeline