DoD's $179M IT Services Contract Awarded to Peraton Enterprise Solutions LLC Shows Mixed Value and Competition

Contract Overview

Contract Amount: $179,464,733 ($179.5M)

Contractor: Peraton Enterprise Solutions LLC

Awarding Agency: Department of Defense

Start Date: 2007-09-30

End Date: 2009-09-30

Contract Duration: 731 days

Daily Burn Rate: $245.5K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 4

Pricing Type: FIXED PRICE

Sector: IT

Official Description: OTHER ADP AND TELECOMMUNICATIONS SVCS 200612!068206!1700!N00140!FLEET AND INDUSTRIAL SUPPLY CENT!N0002400D6000 !A!N! !Y!ETMT ! !20060831!20070930!077817617!077817617!046667523!N!ELECTRONIC DATA SYSTEMS CORPOR!13600 EDS DR !HERNDON !VA!20171!36648!059!51!HERNDON !FAIRFAX !VIRGINIA !+000001947424!N!Y!000000000000!D399!OTHER ADP & TELECOMMUNICATION SERVICES !S1 !SERVICES !000 !NOT DISCERNABLE !541519!E! !5!B!S! ! !C!20100930!B!E!Y!A! !A!N!J!2!004!B! !Z!N!Z! ! !Y!C!N! ! ! !A!A!A!A!000!A!D!N! ! ! ! !1700!N3238A!0001! !

Place of Performance

Location: HERNDON, FAIRFAX County, VIRGINIA, 20171

State: Virginia Government Spending

Plain-Language Summary

Department of Defense obligated $179.5 million to PERATON ENTERPRISE SOLUTIONS LLC for work described as: OTHER ADP AND TELECOMMUNICATIONS SVCS … Key points: 1. The contract's value proposition appears fair, with a significant portion of the total award value potentially representing recurring service costs over its duration. 2. Competition dynamics indicate a full and open process, suggesting a healthy market for these services, though the number of bids is not specified. 3. Risk indicators are moderate, with a fixed-price contract type potentially mitigating cost overruns but requiring careful scope management. 4. Performance context is limited by the available data, but the contract's duration suggests a need for sustained IT support. 5. Sector positioning places this contract within the broader IT services market for defense, a critical area for government operations. 6. The contract's fixed-price nature, while offering cost certainty, could lead to less flexibility if requirements evolve significantly.

Value Assessment

Rating: fair

The total award value of $179.46 million over two years suggests an average annual spend of approximately $89.73 million. Benchmarking this against similar large-scale IT service contracts within the Department of Defense is challenging without more granular data on the specific services provided. However, the fixed-price nature of the contract implies that the government has a defined cost ceiling, which can be advantageous if the scope is well-defined and stable. The value for money hinges on the successful delivery of the contracted services within this budget.

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 bids. This approach generally fosters a competitive environment, which can lead to better pricing and service offerings for the government. The number of bids received (4) is on the lower side for a contract of this magnitude, which might suggest a specialized market or high barriers to entry for potential bidders. Further analysis would be needed to determine if this level of competition adequately drove down costs.

Taxpayer Impact: A full and open competition is generally favorable for taxpayers as it increases the likelihood of obtaining competitive pricing and innovative solutions, maximizing the value of federal dollars spent.

Public Impact

The primary beneficiaries are the Department of the Navy and the broader Department of Defense, which receive essential IT and telecommunications services. Services delivered likely include network management, system maintenance, cybersecurity, and other critical IT infrastructure support. The geographic impact is primarily within the operational areas of the Department of the Navy, potentially spanning multiple bases and facilities. Workforce implications include the direct employment of IT professionals by Peraton Enterprise Solutions LLC and potentially indirect employment through subcontractors.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Limited number of bidders (4) for a contract of this size could indicate potential market concentration or barriers to entry.
Lack of detailed performance metrics makes it difficult to assess the true value for money and service quality.
Fixed-price contract type can sometimes lead to contractor disincentives for exceeding basic requirements or innovating beyond the scope.

Positive Signals

Awarded under full and open competition, suggesting a broad market engagement.
Fixed-price contract type provides cost certainty for the government.
Long contract duration (2 years) indicates a stable, ongoing need for these services.

Sector Analysis

This contract falls within the Information Technology (IT) services sector, specifically focusing on telecommunications and other computer-related services. The IT services market for the federal government is substantial, with significant spending allocated to maintaining and modernizing defense infrastructure. Comparable spending benchmarks would involve analyzing other large IT support contracts awarded by the DoD or other federal agencies for similar scope and duration. The market is characterized by a mix of large prime contractors and specialized subcontractors, with a constant demand for advanced technological solutions.

Small Business Impact

The data indicates that this contract was not set aside for small businesses (ss: false, sb: false). While Peraton Enterprise Solutions LLC is the prime contractor, there is no explicit information regarding small business subcontracting plans or performance. Large IT contracts often involve subcontracting opportunities for small businesses, but the extent of this participation is not detailed here. The absence of a small business set-aside means that opportunities for small businesses would likely arise through subcontracting agreements, if pursued by the prime contractor.

Oversight & Accountability

Oversight for this contract would typically be managed by the contracting officer and the program management office within the Department of the Navy. Accountability measures are inherent in the fixed-price contract terms, requiring delivery of specified services within the agreed budget. Transparency is facilitated through contract databases like FPDS, which provide basic award details. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected or reported.

Related Government Programs

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

Risk Flags

Potential for scope creep in fixed-price contracts if requirements are not clearly defined.
Dependence on a single contractor for critical IT infrastructure.
Limited number of bidders may indicate reduced competitive pressure.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $179.5 million to PERATON ENTERPRISE SOLUTIONS LLC. OTHER ADP AND TELECOMMUNICATIONS SVCS

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 $179.5 million.

What is the period of performance?

Start: 2007-09-30. End: 2009-09-30.

What specific IT and telecommunications services were included in this $179M contract?

The contract data lists the description as 'OTHER ADP AND TELECOMMUNICATIONS SVCS', indicating a broad scope of information technology and telecommunications support. This likely encompasses a range of services such as network operations and maintenance, system administration, cybersecurity support, help desk services, and potentially the provision or management of telecommunications infrastructure. Without more detailed contract line item numbers (CLINs) or a statement of work (SOW), the precise nature and breakdown of these services remain unspecified. However, given the substantial award value and the duration of the contract (two years), it suggests a comprehensive, ongoing support requirement critical to the Department of the Navy's operational capabilities.

How does the per-unit cost or pricing structure of this contract compare to similar DoD IT service contracts?

Direct per-unit cost comparison is not feasible with the provided data, as specific services and their associated unit costs are not detailed. The contract is a fixed-price award, meaning the total price is set regardless of the contractor's actual costs incurred. This pricing structure is generally favorable for the government in terms of cost certainty, assuming the scope is well-defined. To benchmark value, one would need to compare the overall annual spend ($89.73 million) against similar large-scale IT support contracts awarded by the DoD, considering factors like the number of users supported, the complexity of the systems managed, and the specific service level agreements (SLAs) in place. Without such comparative data, assessing whether this contract represents excellent, good, or fair value is challenging.

What are the key performance indicators (KPIs) or metrics used to evaluate Peraton Enterprise Solutions LLC's performance under this contract?

The provided data does not include specific Key Performance Indicators (KPIs) or metrics used to evaluate Peraton Enterprise Solutions LLC's performance. Typically, for IT service contracts of this nature, performance is assessed against Service Level Agreements (SLAs) outlined in the contract's Statement of Work (SOW). These SLAs might cover aspects such as system uptime, response times for issue resolution, cybersecurity incident response times, and user satisfaction. The contracting officer's representative (COR) would usually monitor these metrics throughout the contract period. The absence of this information in the summary data limits a thorough assessment of the contractor's performance and the overall effectiveness of the service delivery.

What is the historical spending trend for 'OTHER ADP AND TELECOMMUNICATIONS SVCS' within the Department of the Navy or DoD?

Analyzing historical spending trends for 'OTHER ADP AND TELECOMMUNICATIONS SVCS' within the Department of the Navy or the broader DoD requires access to historical contract databases over multiple fiscal years. This specific contract award of $179.46 million from 2007-2009 represents a significant investment in IT and telecommunications services during that period. General trends in federal IT spending have shown a consistent increase over the past two decades, driven by modernization efforts, cybersecurity needs, and the expansion of digital services. Within the DoD, spending on IT services is a major component of the overall budget, reflecting the critical role of technology in defense operations. To provide a precise trend analysis, one would need to aggregate and analyze spending data for this specific Product Service Code (PSC) or similar categories across relevant agencies over an extended timeframe.

Are there any known risks associated with Peraton Enterprise Solutions LLC as a contractor, based on past performance or other contracts?

The provided data does not contain information regarding the past performance or specific risks associated with Peraton Enterprise Solutions LLC for this particular contract. A comprehensive risk assessment would involve reviewing past performance evaluations (e.g., Contractor Performance Assessment Reporting System - CPARS), any past disputes or litigation, and the company's overall track record on similar government contracts. Peraton is a significant player in the government contracting space, particularly in IT and defense sectors. Without access to detailed performance history or specific contract-related issues, it is difficult to identify contractor-specific risks beyond those inherent in the contract type and scope.

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: FIXED PRICE (J)

Contractor Details

Parent Company: HP, Inc.

Address: 13600 EDS DRIVE, HERNDON, VA, 20171

Business Categories: Category Business, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $179,464,733

Exercised Options: $179,464,733

Current Obligation: $179,464,733

Contract Characteristics

Commercial Item: COMMERCIAL ITEM

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: N0002400D6000

IDV Type: IDC

Timeline