HHS FDA exercises $93M bridge contract for data center operations with Peraton Enterprise Solutions LLC

Contract Overview

Contract Amount: $93,193,750 ($93.2M)

Contractor: Peraton Enterprise Solutions LLC

Awarding Agency: Department of Health and Human Services

Start Date: 2023-09-27

End Date: 2025-09-29

Contract Duration: 733 days

Daily Burn Rate: $127.1K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: TIME AND MATERIALS

Sector: IT

Official Description: TO ENSURE CONTINUITY OF OPERATIONS, THE OFFICE OF INFORMATION MANAGEMENT AND TECHNOLOGY (OIMT) SEEKS TO EXERCISE ANOTHER BRIDGE CONTRACT FOR CONTINUED OPERATIONS OF ITS DATA CENTERS AND INFRASTRUCTURE NEEDS. AS A RESULT OF DELAYS WITH COMPETITIVE FO

Place of Performance

Location: SILVER SPRING, MONTGOMERY County, MARYLAND, 20993

State: Maryland Government Spending

Plain-Language Summary

Department of Health and Human Services obligated $93.2 million to PERATON ENTERPRISE SOLUTIONS LLC for work described as: TO ENSURE CONTINUITY OF OPERATIONS, THE OFFICE OF INFORMATION MANAGEMENT AND TECHNOLOGY (OIMT) SEEKS TO EXERCISE ANOTHER BRIDGE CONTRACT FOR CONTINUED OPERATIONS OF ITS DATA CENTERS AND INFRASTRUCTURE NEEDS. AS A RESULT OF DELAYS WITH COMPETITIVE FO Key points: 1. Contract aims to ensure continuity of operations for critical data center and infrastructure needs. 2. Bridge contract awarded due to delays in the competitive procurement process. 3. Peraton Enterprise Solutions LLC is the incumbent contractor for these services. 4. The contract type is Time and Materials, which can pose cost control challenges. 5. The duration of the contract is 733 days, extending into late 2025. 6. The contract is for Computer Systems Design Services, a key IT support function.

Value Assessment

Rating: fair

The contract value of $93.2 million over approximately two years for data center operations and infrastructure support appears within a reasonable range for such critical services. However, the Time and Materials (T&M) pricing structure, while offering flexibility, carries inherent risks for cost overruns if not closely managed. Benchmarking against similar government contracts for data center operations and IT infrastructure support would be necessary for a more definitive value assessment. The lack of a fixed price or cost-plus-fixed-fee structure suggests potential for higher-than-anticipated expenditures.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, indicating that multiple vendors had the opportunity to bid. However, the specific details regarding the number of bidders and the evaluation process are not provided in the summary. The fact that this is a bridge contract suggests that the original competitive process may have encountered delays or issues, potentially impacting the overall competitiveness and final pricing.

Taxpayer Impact: Full and open competition is generally favorable for taxpayers as it encourages multiple vendors to offer competitive pricing, potentially leading to cost savings. However, the necessity of a bridge contract implies a temporary solution, which might not always reflect the most cost-effective long-term strategy.

Public Impact

The primary beneficiaries are the Food and Drug Administration (FDA) and the Department of Health and Human Services (HHS), ensuring the uninterrupted operation of their essential data centers and IT infrastructure. The services delivered include continued operations, maintenance, and support for critical data center facilities and related infrastructure. The geographic impact is primarily within Maryland, where the contractor is located and services are likely performed. Workforce implications include the continued employment of personnel by Peraton Enterprise Solutions LLC to deliver these services, maintaining IT operational capabilities within the agency.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

The use of a Time and Materials contract type can lead to cost escalation if not rigorously managed and monitored.
The award of a bridge contract suggests potential inefficiencies or delays in the original competitive procurement process, which could impact long-term planning and cost-effectiveness.
Lack of detailed performance metrics or specific outcomes in the provided data makes it difficult to assess the true effectiveness and value delivered.
The incumbent contractor, Peraton Enterprise Solutions LLC, may benefit from familiarity, potentially creating a barrier for new entrants in future procurements.

Positive Signals

The contract ensures continuity of essential IT operations, preventing disruptions to critical FDA functions.
Awarded under full and open competition, suggesting a competitive process was initiated, even if a bridge was needed.
The contractor, Peraton Enterprise Solutions LLC, has an existing relationship and likely institutional knowledge, potentially facilitating smooth service delivery.
The contract duration provides a stable period for the agency to finalize a more permanent, long-term solution.

Sector Analysis

This contract falls within the IT services sector, specifically focusing on computer systems design and related infrastructure support. The market for government IT services is substantial, with agencies increasingly relying on external vendors for data center management, cloud migration, cybersecurity, and general IT operations. Comparable spending benchmarks for similar data center operations and IT infrastructure support contracts within federal agencies can vary widely based on scope, duration, and specific services required. Agencies often seek to consolidate data centers or move to cloud solutions, making the management of existing infrastructure a critical, albeit sometimes transitional, need.

Small Business Impact

The provided data indicates that this contract was not set aside for small businesses (ss: false, sb: false). Therefore, there are no direct subcontracting implications or specific impacts on the small business ecosystem stemming from a small business set-aside. The primary focus appears to be on ensuring operational continuity through a larger, established provider.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of Health and Human Services (HHS) and the Food and Drug Administration (FDA) contracting officers and program managers. The Time and Materials (T&M) nature of the contract necessitates close monitoring of labor hours and material costs to prevent overspending. Transparency is generally facilitated through contract award databases like FPDS.gov, where basic details are published. Specific accountability measures would be detailed in the contract's terms and conditions, including performance standards and remedies for non-performance. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

HHS IT Infrastructure Support Contracts
FDA Data Center Operations
Federal Data Center Consolidation Initiative
IT Services for Health Agencies
Computer Systems Design Services

Risk Flags

Bridge Contract
Time and Materials Pricing
Procurement Delays
Incumbent Contractor Award

Frequently Asked Questions

What is this federal contract paying for?

Department of Health and Human Services awarded $93.2 million to PERATON ENTERPRISE SOLUTIONS LLC. TO ENSURE CONTINUITY OF OPERATIONS, THE OFFICE OF INFORMATION MANAGEMENT AND TECHNOLOGY (OIMT) SEEKS TO EXERCISE ANOTHER BRIDGE CONTRACT FOR CONTINUED OPERATIONS OF ITS DATA CENTERS AND INFRASTRUCTURE NEEDS. AS A RESULT OF DELAYS WITH COMPETITIVE FO

Who is the contractor on this award?

The obligated recipient is PERATON ENTERPRISE SOLUTIONS LLC.

Which agency awarded this contract?

Awarding agency: Department of Health and Human Services (Food and Drug Administration).

What is the total obligated amount?

The obligated amount is $93.2 million.

What is the period of performance?

Start: 2023-09-27. End: 2025-09-29.

What is the track record of Peraton Enterprise Solutions LLC with the FDA and HHS for similar services?

Peraton Enterprise Solutions LLC has a history of providing IT services to government agencies, including potentially the FDA and HHS, given they are the incumbent on this bridge contract. Their track record would typically involve managing complex IT infrastructure, ensuring system uptime, and providing technical support. A thorough review would examine past performance evaluations, any documented issues or successes on previous contracts, and their overall reputation within the federal IT contracting space. Specific details on their performance metrics, adherence to schedules, and quality of deliverables on prior FDA/HHS contracts would be crucial for assessing their reliability and capability for this ongoing requirement. Without access to detailed past performance reports, it's difficult to provide a definitive assessment, but their incumbency suggests a level of established capability.

How does the $93.2 million cost compare to similar data center operations contracts within the federal government?

Benchmarking the $93.2 million cost requires comparing it against contracts with similar scope, duration, and service levels for data center operations and IT infrastructure support across federal agencies. The average cost for such services can vary significantly based on factors like the number of data centers supported, the complexity of the infrastructure (e.g., legacy systems vs. modern cloud integration), the level of security required, and the specific services included (e.g., hardware maintenance, software support, network management, disaster recovery). Given this is a bridge contract for continuity, it might not reflect the most optimized long-term pricing. A comprehensive analysis would involve reviewing data from similar contracts awarded by agencies like GSA, DoD, or other large civilian departments to establish a reasonable market rate and assess whether this contract represents good value for money, especially considering the T&M pricing structure.

What are the primary risks associated with using a Time and Materials (T&M) contract for these critical IT services?

The primary risk with a Time and Materials (T&M) contract for critical IT services like data center operations is the potential for cost overruns. Unlike fixed-price contracts, T&M contracts reimburse the contractor for direct labor hours at specified rates and for the actual cost of materials. This structure provides flexibility but lacks a definitive ceiling on total expenditure, making budget predictability challenging. If not managed diligently, contractors may incur higher labor hours or material costs than anticipated, leading to a significantly higher final price than initially projected. Effective oversight, including rigorous monitoring of labor hours, validation of material costs, and clear task definitions, is essential to mitigate these risks and ensure the government receives value for its investment. The agency must have robust mechanisms in place to control scope and prevent scope creep.

What is the expected effectiveness and performance of these services under the bridge contract?

The expected effectiveness and performance of these services under the bridge contract are primarily focused on ensuring the continuity of essential data center operations and IT infrastructure. The goal is to maintain the status quo without disruption, allowing the FDA to continue its critical functions without interruption. Performance expectations would typically revolve around maintaining high levels of system availability, ensuring data integrity, providing timely technical support, and meeting established service level agreements (SLAs) for uptime and response times. While a bridge contract aims for continuity, it may not necessarily drive innovation or performance improvements beyond maintaining existing operational standards. The effectiveness will largely depend on the contractor's ability to sustain current operations and the agency's oversight in monitoring adherence to service levels.

How has historical spending on data center operations and IT infrastructure support evolved at the FDA or HHS?

Analyzing historical spending patterns for data center operations and IT infrastructure support at the FDA or HHS is crucial for understanding trends, identifying potential cost efficiencies, and contextualizing the current contract's value. This would involve examining spending data over several fiscal years to identify increases or decreases in expenditure, the reasons behind these fluctuations (e.g., technology upgrades, consolidation efforts, changes in service providers), and the overall trajectory of IT investment. Understanding this history can reveal whether spending has been consistent, escalating, or declining, and whether previous contracts were competitively bid or sole-sourced. Such analysis helps in assessing the long-term financial commitment and strategic direction of the agency's IT infrastructure management.

What are the implications of the delays in the competitive procurement process for future IT service contracts?

Delays in the competitive procurement process for essential IT services, leading to the necessity of a bridge contract, can have several implications. Firstly, it can indicate potential challenges within the agency's acquisition planning or execution, possibly signaling a need for process improvement. Secondly, it can lead to increased costs, as bridge contracts, especially T&M types, may not be as cost-effective as a well-executed competitive award. Thirdly, it can create uncertainty for both the agency and potential future bidders. For the agency, it means relying on a potentially temporary solution, which might hinder long-term strategic IT goals. For potential bidders, it can raise questions about the procurement process's efficiency and predictability, potentially impacting their willingness to invest resources in future bids if they perceive risks or delays.

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 › IT AND TELECOM - DATA CENTER

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Offers Received: 1

Pricing Type: TIME AND MATERIALS (Y)

Evaluated Preference: NONE

Contractor Details

Address: 15050 CONFERENCE CENTER DR, CHANTILLY, VA, 20151

Business Categories: Category Business, Limited Liability Corporation, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $93,193,750

Exercised Options: $93,193,750

Current Obligation: $93,193,750

Actual Outlays: $92,331,016

Subaward Activity

Number of Subawards: 10

Total Subaward Amount: $1,093,926

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Parent Contract

Parent Award PIID: HHSN316201200026W

IDV Type: GWAC

Timeline