DOJ's $38.8M IT Managed Services Contract Awarded to Peraton Enterprise Solutions LLC

Contract Overview

Contract Amount: $38,793,129 ($38.8M)

Contractor: Peraton Enterprise Solutions LLC

Awarding Agency: Department of Justice

Start Date: 2006-10-01

End Date: 2007-09-30

Contract Duration: 364 days

Daily Burn Rate: $106.6K/day

Number of Offers Received: 1

Pricing Type: FIXED PRICE INCENTIVE

Sector: IT

Official Description: INFORMATION TECHNOLOGY MANAGED SERVICES

Place of Performance

Location: WASHINGTON, DISTRICT OF COLUMBIA County, DISTRICT OF COLUMBIA, 20226

State: District of Columbia Government Spending

Plain-Language Summary

Department of Justice obligated $38.8 million to PERATON ENTERPRISE SOLUTIONS LLC for work described as: INFORMATION TECHNOLOGY MANAGED SERVICES Key points: 1. Contract awarded for IT managed services, indicating a need for external expertise in managing complex technological infrastructure. 2. The fixed-price incentive contract type suggests a focus on performance-based outcomes with financial incentives for meeting or exceeding targets. 3. The contract duration of 364 days points to a short-term or initial engagement, potentially for a specific project or transition. 4. Awarded by the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), highlighting the critical nature of IT support for law enforcement operations. 5. The single award indicates a competitive process that resulted in one primary provider, requiring careful evaluation of the chosen vendor's capabilities. 6. The contract's value of approximately $38.8 million warrants scrutiny to ensure cost-effectiveness and alignment with market rates for similar services.

Value Assessment

Rating: fair

The contract value of $38.8 million for a one-year IT managed services engagement appears substantial. Benchmarking against similar contracts for federal IT managed services is crucial to determine if this represents a fair price. Without specific details on the scope of services, it's difficult to definitively assess value for money. However, the fixed-price incentive structure suggests an attempt to align costs with performance, which can be a positive indicator if managed effectively.

Cost Per Unit: N/A

Competition Analysis

Competition Level: unknown

The contract was awarded as a single award, but the specific competition method (e.g., full and open, sole source, limited competition) is not detailed. If it was a full and open competition, the single award might suggest that only one offeror met the technical and price requirements, or that Peraton Enterprise Solutions LLC was significantly more competitive than others. If it was a limited or sole-source award, it would imply specific justifications were required.

Taxpayer Impact: A single award, regardless of the competition type, means taxpayers are relying on the government's due diligence to ensure the selected contractor provides the best value and that the pricing is competitive.

Public Impact

The primary beneficiaries are the Department of Justice, specifically the Bureau of Alcohol, Tobacco, Firearms and Explosives, which will receive enhanced IT managed services. Services delivered likely include network management, system maintenance, cybersecurity support, and potentially help desk functions to ensure operational continuity. The geographic impact is centered in Washington D.C., where the contract is managed and likely where the primary IT infrastructure resides. Workforce implications may include the utilization of Peraton's IT professionals, potentially reducing the need for a large in-house IT staff for the ATF.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of detailed competition information raises questions about potential price discovery and whether the government secured the most competitive pricing.
The fixed-price incentive contract type, while performance-oriented, can lead to cost overruns if not carefully monitored and managed.
The single award necessitates a thorough review of Peraton's past performance and technical capabilities to ensure successful service delivery.

Positive Signals

The fixed-price incentive structure incentivizes the contractor to meet performance goals, potentially leading to improved service quality.
Awarding to a single vendor can streamline management and communication, provided the vendor is highly capable and reliable.
The contract addresses a critical need for IT managed services within a key law enforcement agency.

Sector Analysis

This contract falls within the Information Technology (IT) sector, specifically focusing on managed services. The federal IT services market is vast, with agencies increasingly relying on external providers for specialized expertise in areas like network infrastructure, cybersecurity, and cloud computing. Managed services contracts aim to ensure the efficient and effective operation of IT systems, often at a lower cost than maintaining large in-house teams. Comparable spending benchmarks for IT managed services can vary widely based on the scope, duration, and complexity of services required.

Small Business Impact

The data indicates 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 small business set-aside. The primary contractor, Peraton Enterprise Solutions LLC, is likely a large business. Any subcontracting opportunities would depend on Peraton's own business strategy and federal subcontracting goals, which are not detailed in this data.

Oversight & Accountability

Oversight for this contract would typically be managed by the Bureau of Alcohol, Tobacco, Firearms and Explosives Acquisition and Property Management Division. Accountability measures are embedded within the fixed-price incentive contract structure, linking payment to performance. Transparency would be enhanced through contract reporting requirements and potentially through public contract databases. Inspector General jurisdiction would apply if any fraud, waste, or abuse is suspected.

Related Government Programs

Federal Information Technology, Acquisition Reform Act (FITARA)
IT Modernization Fund
General Services Administration (GSA) IT Schedule Contracts
Department of Justice IT Services

Risk Flags

Potential for cost overruns if performance targets are not met or if costs exceed projections.
Risk of vendor lock-in due to the single award nature of the contract.
Dependency on contractor's performance for critical IT infrastructure operations.
Need for robust government oversight to ensure value and compliance.

Frequently Asked Questions

What is this federal contract paying for?

Department of Justice awarded $38.8 million to PERATON ENTERPRISE SOLUTIONS LLC. INFORMATION TECHNOLOGY MANAGED 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 Justice (Bureau of Alcohol, Tobacco, Firearms and Explosives Acquisition and Property Management Division).

What is the total obligated amount?

The obligated amount is $38.8 million.

What is the period of performance?

Start: 2006-10-01. End: 2007-09-30.

What specific IT managed services are included under this contract, and how do they align with the ATF's operational needs?

The provided data identifies the contract as being for 'INFORMATION TECHNOLOGY MANAGED SERVICES' but does not detail the specific services. Typically, such contracts encompass a broad range of IT support, including network management, server administration, cybersecurity monitoring and response, help desk support, software maintenance, and potentially cloud infrastructure management. For the ATF, these services are critical for maintaining secure and reliable communication systems, data management for investigations, and operational technology that supports field agents. The exact alignment would depend on the detailed Statement of Work (SOW) within the contract, which is not available here. Understanding the SOW is crucial to assess if the scope adequately addresses the ATF's unique requirements, such as handling sensitive law enforcement data and ensuring high availability for critical systems.

How does the $38.8 million contract value compare to industry benchmarks for similar IT managed services contracts of a 1-year duration?

Benchmarking the $38.8 million contract value for a one-year IT managed services engagement requires detailed comparison with similar federal or large enterprise contracts. Factors influencing cost include the number of users supported, the complexity of the IT environment (e.g., number of servers, network devices, applications), the level of security required (especially critical for law enforcement), and the specific services included (e.g., 24/7 support, proactive monitoring, disaster recovery). Without a detailed Statement of Work (SOW) and specific service level agreements (SLAs), a precise comparison is difficult. However, for a contract of this magnitude, it suggests a comprehensive suite of services for a significant user base or a highly complex IT infrastructure. Industry reports and government spending databases (like FPDS or USAspending) can provide comparative data points, but nuances in scope often make direct comparisons challenging. The fixed-price incentive nature also implies that the target cost was established, and deviations could impact the final price paid.

What is Peraton Enterprise Solutions LLC's track record with federal IT managed services contracts, particularly with law enforcement agencies?

Peraton Enterprise Solutions LLC, and its predecessor companies, have a significant history of providing IT services to the federal government. Their portfolio often includes complex solutions for defense, intelligence, and civilian agencies. While specific details on their track record with the ATF for managed services under this particular contract are not provided in the summary data, Peraton has been involved in large-scale IT modernization, cybersecurity, and mission support contracts across various agencies. Evaluating their past performance on similar contracts, including client satisfaction, adherence to schedules and budgets, and technical execution, would be essential. Their experience with sensitive data and secure IT environments, common in law enforcement and national security sectors, would be a key indicator of their capability to fulfill the ATF's requirements effectively.

What are the potential risks associated with a single award for IT managed services, and how might they be mitigated?

A single award for IT managed services carries several potential risks. Firstly, it can limit price competition, potentially leading to higher costs if the initial negotiation or pricing structure is not optimal. Secondly, it creates a dependency on a single vendor; if Peraton Enterprise Solutions LLC underperforms, experiences financial instability, or faces unforeseen challenges, the ATF's IT operations could be severely disrupted. Mitigation strategies include rigorous upfront due diligence on the vendor's capabilities, financial health, and past performance. Strong contract management, including clearly defined performance metrics (SLAs), regular performance reviews, and robust oversight, is crucial. Including strong incentive clauses and clear termination for convenience or default clauses in the contract can also provide leverage and contingency options. Maintaining open communication channels and fostering a collaborative relationship, while remaining vigilant, can help address issues proactively.

How does the fixed-price incentive (FPI) contract type influence cost control and performance outcomes for this IT managed services contract?

The Fixed-Price Incentive (FPI) contract type aims to balance cost control with performance by establishing a target cost, target profit, and a price ceiling. The contractor (Peraton) is incentivized to control costs below the target cost, sharing in the savings with the government. Conversely, if costs exceed the target, the contractor's profit decreases, and if costs exceed the price ceiling, the contractor absorbs the additional cost. This structure encourages efficiency and cost-consciousness. For performance, the FPI contract often includes specific performance objectives tied to the profit or price. Achieving or exceeding these objectives can lead to higher profits for the contractor, aligning their goals with the government's desired outcomes. Effective implementation requires clear definition of cost and performance metrics, robust tracking, and fair negotiation of the final settlement.

Contractor Details

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

Address: 13600 EDS DR, HERNDON, VA, 11

Business Categories: AbilityOne Program Participant, Category Business, Not Designated a Small Business, Special Designations

Financial Breakdown

Contract Ceiling: $38,793,129

Exercised Options: $38,793,129

Current Obligation: $38,793,129

Parent Contract

Parent Award PIID: DCA20002D5007

IDV Type: IDC

Timeline