DoD's $88.6M ITCC II contract to Peraton Enterprise Solutions shows strong competition and fair pricing for computer systems design

Contract Overview

Contract Amount: $88,640,980 ($88.6M)

Contractor: Peraton Enterprise Solutions LLC

Awarding Agency: Department of Defense

Start Date: 2021-07-01

End Date: 2025-12-19

Contract Duration: 1,632 days

Daily Burn Rate: $54.3K/day

Competition Type: FULL AND OPEN COMPETITION

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: ITCC II BASELINE LABOR, CDRLS, AND FFP PROJECTS

Place of Performance

Location: OFFUTT AFB, SARPY County, NEBRASKA, 68113

State: Nebraska Government Spending

Plain-Language Summary

Department of Defense obligated $88.6 million to PERATON ENTERPRISE SOLUTIONS LLC for work described as: ITCC II BASELINE LABOR, CDRLS, AND FFP PROJECTS Key points: 1. Contract awarded under full and open competition, indicating a robust bidding process. 2. Pricing appears competitive when benchmarked against similar IT services contracts. 3. The contract's duration and scope suggest a significant, long-term IT support requirement. 4. Performance is tied to specific deliverables (CDRLs), offering clear accountability. 5. The firm-fixed-price structure shifts performance risk to the contractor. 6. No small business set-aside was utilized, suggesting large prime contractor focus.

Value Assessment

Rating: good

The contract's value of $88.6 million over its period of performance appears reasonable for comprehensive IT systems design services. Benchmarking against similar large-scale IT support contracts within the Department of Defense suggests that the pricing is within an expected range. The firm-fixed-price (FFP) award type indicates that the contractor bears the primary financial risk, which can be a positive indicator of value if performance is met within budget.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded through a full and open competition, suggesting that multiple qualified vendors had the opportunity to bid. The specific number of bidders is not provided, but the designation implies a competitive environment that should drive price discovery and innovation. This approach is generally favored for ensuring the government receives the best possible value by leveraging market forces.

Taxpayer Impact: A full and open competition maximizes the potential for competitive pricing, which directly benefits taxpayers by ensuring that the government is not overpaying for essential IT services.

Public Impact

The Department of the Air Force benefits from enhanced computer systems design and support capabilities. This contract ensures the delivery of critical IT services necessary for military operations. The contract's impact is primarily within the IT services sector, supporting defense readiness. Workforce implications include the potential for skilled IT professionals to be engaged through Peraton Enterprise Solutions.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for contractor lock-in if follow-on work is not competed.
Reliance on a single prime contractor for critical IT infrastructure.
Scope creep could increase costs if not managed tightly.
Cybersecurity risks associated with sensitive defense data.
Dependence on contractor's ability to maintain skilled workforce.

Positive Signals

Awarded through full and open competition, promoting market fairness.
Firm-fixed-price contract shifts financial risk to the contractor.
Clear deliverables (CDRLs) provide performance accountability.
Long-term contract indicates a stable IT support solution.
Supports critical defense IT infrastructure needs.

Sector Analysis

The IT services sector, particularly within defense, is characterized by complex requirements and significant government spending. This contract for Computer Systems Design Services falls under the broader IT consulting and integration market, which is highly competitive. The size of this contract, approximately $88.6 million, places it as a substantial award, likely supporting a significant portion of the Air Force's IT infrastructure needs in Nebraska. Comparable spending benchmarks in this area often involve multi-year, multi-million dollar contracts for system design, integration, and maintenance.

Small Business Impact

The data indicates that this contract was not set aside for small businesses (ss: false, sb: false). This suggests that the primary focus was on securing the best overall solution from the market, likely favoring larger prime contractors with the capacity to handle the scope and complexity of this IT systems design requirement. There is no explicit information on subcontracting plans, but typically, large prime contracts of this nature may involve some subcontracting opportunities for specialized services, though not necessarily targeted towards small businesses unless specified.

Oversight & Accountability

Oversight for this contract would primarily reside with the Department of the Air Force contracting and program management offices. The firm-fixed-price nature of the award, coupled with the requirement for specific Contract Data Requirements Lists (CDRLs), provides a framework for performance monitoring. Transparency is facilitated through contract award databases, though detailed performance metrics are typically internal. Inspector General jurisdiction would apply in cases of suspected fraud, waste, or abuse.

Related Government Programs

IT Systems Integration Services
Computer Systems Design Services
Defense Information Technology Contracts
Air Force IT Modernization Programs
Enterprise IT Solutions

Risk Flags

Potential for performance issues if contractor lacks sufficient resources.
Risk of scope creep without stringent management.
Cybersecurity vulnerabilities in IT systems.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $88.6 million to PERATON ENTERPRISE SOLUTIONS LLC. ITCC II BASELINE LABOR, CDRLS, AND FFP PROJECTS

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 Air Force).

What is the total obligated amount?

The obligated amount is $88.6 million.

What is the period of performance?

Start: 2021-07-01. End: 2025-12-19.

What is the track record of Peraton Enterprise Solutions with the Department of Defense for similar IT services contracts?

Peraton Enterprise Solutions, as a significant player in the government contracting space, has a history of performing IT services for various federal agencies, including the Department of Defense. While specific details on past performance for identical 'ITCC II BASELINE LABOR, CDRLS, AND FFP PROJECTS' are not immediately available from this data snippet, Peraton has been awarded numerous contracts for IT modernization, cybersecurity, and enterprise IT services. Their performance history generally indicates experience with large-scale, complex IT projects. However, a deeper dive into their specific contract history, including past performance evaluations and any reported issues on previous DoD contracts, would be necessary for a comprehensive assessment of their track record for this particular type of service.

How does the awarded value of $88.6 million compare to other similar IT systems design contracts within the DoD?

The $88.6 million value for this ITCC II contract is substantial and falls within the typical range for large-scale, multi-year IT systems design and support contracts awarded by the Department of Defense. Contracts of this nature often span several years and involve comprehensive services, justifying such significant financial commitments. Benchmarking against similar contracts for computer systems design services within the Air Force or other DoD branches reveals that values can range from tens to hundreds of millions of dollars, depending on the scope, duration, and complexity of the required services. This particular contract's value appears to be in line with industry standards for supporting critical defense IT infrastructure over its projected lifespan.

What are the primary risks associated with this firm-fixed-price contract structure for the government?

The primary risk for the government with a firm-fixed-price (FFP) contract structure, like this ITCC II award, is that the contractor may be incentivized to cut corners on quality or scope to maximize profit if not adequately monitored. While FFP shifts cost overrun risk to the contractor, it requires robust oversight to ensure that the specified quality and performance standards are met. If the contractor underperforms or fails to deliver as per the Contract Data Requirements Lists (CDRLs), the government may face challenges in rectifying the situation without potentially incurring additional costs or delays, especially if the contractor is experiencing financial difficulties or lacks the necessary expertise. However, FFP is generally preferred for its cost predictability.

What is the expected impact of this contract on the IT services market in Nebraska?

While the contract is awarded to Peraton Enterprise Solutions and the specific performance location is listed as Nebraska, the direct impact on the broader IT services market within Nebraska is not explicitly detailed in the provided data. Typically, large federal contracts can stimulate local economies by creating jobs, either directly through the prime contractor or indirectly through subcontractors. If Peraton establishes or expands a presence in Nebraska to fulfill this contract, it could lead to increased demand for skilled IT professionals in the region. However, without information on the extent of local subcontracting or the physical location of the work performed, the precise market impact remains speculative. It is possible the work is performed remotely or by personnel already based in the area.

How does the 'Computer Systems Design Services' NAICS code (541512) typically relate to defense IT spending?

The NAICS code 541512, 'Computer Systems Design Services,' is a fundamental category for defense IT spending. It encompasses a wide range of activities crucial for maintaining and modernizing military technology, including designing, developing, and integrating hardware, software, and network systems. Defense agencies rely heavily on these services for everything from battlefield management systems and intelligence analysis platforms to administrative and logistical IT infrastructure. Contracts under this code often involve complex system architecture, software development, network engineering, and cybersecurity integration, making them vital for ensuring operational readiness and technological superiority for the armed forces.

What does the 'Delivery Order' (aw) designation imply about the contract's structure?

The 'Delivery Order' (aw) designation indicates that this contract is likely a task order or delivery order issued under a larger, pre-existing indefinite-delivery/indefinite-quantity (IDIQ) or similar type of multiple-award contract vehicle. This means that the 'ITCC II BASELINE LABOR, CDRLS, AND FFP PROJECTS' is not a standalone contract but rather a specific order placed against a broader contract that allows for the issuance of multiple orders over its term. This structure provides flexibility for the government to procure specific services or products as needed, while the underlying IDIQ contract likely underwent a competitive process itself. The 'Delivery Order' specifies the particular goods or services to be provided, their cost, and delivery timeline for this instance.

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 - APLLICATIONS

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

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

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

Financial Breakdown

Contract Ceiling: $88,640,980

Exercised Options: $88,640,980

Current Obligation: $88,640,980

Actual Outlays: $2,985,769

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Parent Contract

Parent Award PIID: FA460021D0001

IDV Type: IDC

Timeline