HHS awards $63.4M for ITSO Application Hosting Services to Peraton Enterprise Solutions LLC

Contract Overview

Contract Amount: $63,454,332 ($63.5M)

Contractor: Peraton Enterprise Solutions LLC

Awarding Agency: Department of Health and Human Services

Start Date: 2011-12-26

End Date: 2016-08-26

Contract Duration: 1,705 days

Daily Burn Rate: $37.2K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 4

Pricing Type: TIME AND MATERIALS

Sector: IT

Official Description: ITSO APPLICATION HOSTING SERVICES

Place of Performance

Location: ATLANTA, DEKALB County, GEORGIA, 30329

State: Georgia Government Spending

Plain-Language Summary

Department of Health and Human Services obligated $63.5 million to PERATON ENTERPRISE SOLUTIONS LLC for work described as: ITSO APPLICATION HOSTING SERVICES Key points: 1. The contract value represents a significant investment in IT infrastructure for the CDC. 2. Competition dynamics for this contract are assessed to understand pricing efficiency. 3. Risk indicators are evaluated based on contract type and performance history. 4. Performance context is provided by comparing this award to similar IT hosting services. 5. The contract falls within the Computer Systems Design Services sector, a critical area for government IT operations.

Value Assessment

Rating: fair

The total award of $63.4 million over approximately 1705 days (roughly 4.6 years) suggests a substantial commitment. Benchmarking this against similar large-scale IT hosting contracts is challenging without more granular data on service levels and scope. However, the average annual spend of approximately $13.7 million warrants scrutiny to ensure it aligns with market rates for comparable hosting and application management services. The Time and Materials (T&M) pricing structure, while offering flexibility, can sometimes lead to cost overruns if not managed tightly, impacting overall value for money.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that multiple vendors had the opportunity to bid. With 4 bidders participating, the level of competition appears moderate. A higher number of bidders generally leads to more competitive pricing and a wider range of technical solutions. The presence of four bidders suggests that the market for these services is active, but further analysis would be needed to determine if the pricing achieved was truly optimal compared to a scenario with even greater competition.

Taxpayer Impact: Full and open competition is generally favorable for taxpayers as it encourages multiple vendors to offer their best pricing and solutions, potentially leading to cost savings and better service delivery.

Public Impact

The Centers for Disease Control and Prevention (CDC) benefits from this contract by securing essential IT hosting services. The services delivered are critical for the operation and maintenance of various government applications. The geographic impact is primarily within the federal government's IT infrastructure, supporting national public health initiatives. Workforce implications include the potential for IT professionals to be engaged in supporting these critical government systems.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Time and Materials (T&M) contract type can lead to cost uncertainty if not closely monitored.
The duration of the contract (1705 days) represents a significant, long-term commitment of federal funds.
Limited public information on specific performance metrics makes it difficult to assess value beyond the award amount.

Positive Signals

Awarded under full and open competition, suggesting a competitive bidding process.
The contract supports critical public health IT infrastructure for the CDC.
The vendor, Peraton Enterprise Solutions LLC, is a known entity in the federal IT contracting space.

Sector Analysis

This contract falls within the broader IT services sector, specifically focusing on computer systems design and related services, including application hosting. The market for government IT hosting is substantial, driven by the need for secure, reliable, and scalable infrastructure to support a wide range of federal agency operations. Comparable spending benchmarks would typically involve analyzing other large federal contracts for cloud hosting, data center services, and managed IT infrastructure, often measured by annual spend or cost per user/application.

Small Business Impact

The data indicates that 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 set-aside requirement. However, the prime contractor, Peraton Enterprise Solutions LLC, may engage small businesses as subcontractors to fulfill parts of the contract, depending on their own subcontracting plans and the nature of the services required. The absence of a small business set-aside means that opportunities for small businesses were likely pursued through the general full and open competition.

Oversight & Accountability

Oversight for this contract would typically be managed by the Department of Health and Human Services (HHS) and the Centers for Disease Control and Prevention (CDC) contracting officers and program managers. Accountability measures would be defined in the contract's statement of work and performance standards. Transparency is often facilitated through contract award databases like FPDS-NG, which provide basic details of the award. Inspector General jurisdiction would apply if any fraud, waste, or abuse related to the contract were suspected.

Related Government Programs

IT Infrastructure Modernization Programs
Cloud Computing Services Contracts
Application Development and Maintenance Services
Data Center Operations Support
Federal Civilian Agency IT Spending

Risk Flags

Potential for cost overruns due to T&M pricing structure.
Long-term contract duration requires careful resource allocation and budget forecasting.
Dependence on a single vendor for critical IT infrastructure.
Need for robust performance monitoring to ensure value for money.

Frequently Asked Questions

What is this federal contract paying for?

Department of Health and Human Services awarded $63.5 million to PERATON ENTERPRISE SOLUTIONS LLC. ITSO APPLICATION HOSTING 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 Health and Human Services (Centers for Disease Control and Prevention).

What is the total obligated amount?

The obligated amount is $63.5 million.

What is the period of performance?

Start: 2011-12-26. End: 2016-08-26.

What is the track record of Peraton Enterprise Solutions LLC with the federal government, particularly in IT hosting services?

Peraton Enterprise Solutions LLC has a significant track record as a federal contractor, often involved in large-scale IT services, cybersecurity, and mission support. Their experience spans various agencies, including defense and civilian. For IT hosting services specifically, their past performance would be detailed in contract databases, showing the types of systems hosted, the scale of operations, and client agency satisfaction. Analyzing their history with similar contracts would reveal their capability to manage complex application hosting environments, adhere to security protocols, and meet performance requirements. Past performance evaluations and any contract disputes or awards for exceptional performance would provide further insight into their reliability and expertise in this domain.

How does the average annual cost of this contract compare to industry benchmarks for similar IT hosting services?

The contract's total value of approximately $63.4 million over 1705 days averages to about $13.7 million per year. To benchmark this against industry standards, one would need to compare it with contracts for comparable services, considering factors like the number of applications hosted, the complexity of those applications, the required uptime (e.g., 99.99%), data storage needs, security certifications (e.g., FedRAMP), and the level of managed services provided. General market research reports on IT infrastructure and cloud hosting services can offer average costs per server, per gigabyte of storage, or per managed application. Without specific details on the service level agreements (SLAs) and the scope of work for this particular contract, a precise comparison is difficult, but the annual spend suggests a significant scale of operation.

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

The primary risk associated with a Time and Materials (T&M) contract for IT hosting services is the potential for cost overruns. Unlike fixed-price contracts, T&M contracts reimburse the contractor for the actual labor hours and material costs incurred. If the scope of work is not clearly defined, or if project management is weak, the contractor may spend more time or resources than anticipated, leading to a higher final cost for the government. This lack of a cost ceiling can make budgeting unpredictable. To mitigate this risk, strong oversight, detailed tracking of labor hours, efficient resource allocation, and clear task definitions are crucial. The government must actively manage the contractor's effort to ensure efficiency and prevent scope creep.

What is the strategic importance of these ITSO Application Hosting Services to the CDC's mission?

The ITSO Application Hosting Services are strategically vital to the Centers for Disease Control and Prevention (CDC) as they underpin the operational continuity and accessibility of numerous critical public health applications. These applications likely support disease surveillance, data analysis, public health alerts, research initiatives, and internal operational systems. Reliable and secure hosting ensures that the CDC can effectively monitor health threats, disseminate vital information, and conduct its research without interruption. Any disruption to these hosting services could have significant implications for public health response and national security. Therefore, securing robust and efficient hosting is a foundational element of the CDC's ability to fulfill its public health mission.

How has federal spending on IT hosting services evolved over the past five years, and where does this contract fit in?

Federal spending on IT hosting services, including cloud and data center solutions, has seen a significant upward trend over the past five years, driven by agency modernization efforts, the adoption of cloud-first policies, and the increasing demand for data analytics and digital services. Agencies are shifting from traditional on-premises data centers to more flexible and scalable cloud environments (public, private, and hybrid). This contract, awarded in 2011 and ending in 2016, represents a substantial investment during a period of transition. While it reflects a significant commitment to dedicated hosting, it predates the full maturation of many modern cloud offerings. Its value of $63.4 million places it among larger IT infrastructure contracts, indicative of the scale of the CDC's needs at the time.

What are the potential implications of this contract's duration and value on future IT procurement strategies for the CDC?

The contract's duration of approximately 1705 days (4.6 years) and its substantial value ($63.4 million) highlight the long-term commitment required for robust IT hosting solutions. For the CDC, such awards necessitate careful long-term IT planning and budgeting. The trend in federal IT procurement has been moving towards more agile methodologies, cloud-native solutions, and shorter contract vehicles where feasible, to allow for faster adoption of new technologies and better cost management. This contract, being a delivery order under a larger vehicle, might reflect a strategy to secure essential services while allowing for some flexibility. Future strategies may focus on leveraging scalable cloud services that offer greater agility and potentially lower total cost of ownership compared to dedicated hosting, while still ensuring security and compliance.

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 › ADP AND TELECOMMUNICATIONS

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Solicitation ID: 2010N11852

Offers Received: 4

Pricing Type: TIME AND MATERIALS (Y)

Evaluated Preference: NONE

Contractor Details

Parent Company: Peraton Solutions Inc. (UEI: 081218565)

Address: 13600 EDS DR A3S-B53, HERNDON, VA, 20171

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

Financial Breakdown

Contract Ceiling: $687,790,945

Exercised Options: $248,515,916

Current Obligation: $63,454,332

Contract Characteristics

Commercial Item: COMMERCIAL ITEM

Parent Contract

Parent Award PIID: HHSD200201037212I

IDV Type: IDC

Timeline