HHS awards $251.7M for IT services, with 5 bids received in a competitive process

Contract Overview

Contract Amount: $251,712,671 ($251.7M)

Contractor: Peraton Enterprise Solutions LLC

Awarding Agency: Department of Health and Human Services

Start Date: 2007-01-19

End Date: 2014-06-15

Contract Duration: 2,704 days

Daily Burn Rate: $93.1K/day

Competition Type: COMPETITIVE DELIVERY ORDER

Number of Offers Received: 5

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: TAS::75 0511::TAS

Place of Performance

Location: TULSA, TULSA County, OKLAHOMA, 74117

State: Oklahoma Government Spending

Plain-Language Summary

Department of Health and Human Services obligated $251.7 million to PERATON ENTERPRISE SOLUTIONS LLC for work described as: TAS::75 0511::TAS Key points: 1. The contract value of $251.7 million over its period of performance suggests a significant investment in IT infrastructure. 2. A competitive delivery order indicates that multiple vendors were considered, potentially leading to better pricing. 3. The fixed-price contract type shifts performance risk to the contractor, encouraging efficient service delivery. 4. The duration of the contract (2704 days) points to a long-term need for these IT services. 5. The North American Industry Classification System (NAICS) code 541513 categorizes this as Computer Facilities Management Services. 6. The award was made by the Centers for Medicare and Medicaid Services (CMS), a key agency within HHS.

Value Assessment

Rating: good

The total award of $251.7 million over approximately 7.4 years averages to about $34 million annually. Benchmarking this against similar large-scale IT service contracts within federal agencies requires detailed comparison of scope and service levels. However, the competitive nature of the award suggests that pricing was likely scrutinized against multiple proposals. Without specific per-unit cost data or detailed service level agreements, a precise value-for-money assessment is challenging, but the competitive environment is a positive indicator.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded as a competitive delivery order, indicating that it was competed under full and open competition. Five bids were received, suggesting a healthy level of interest and a reasonable degree of competition for this requirement. The presence of multiple bidders generally allows the government to solicit a range of technical solutions and pricing, fostering price discovery and potentially leading to more favorable terms.

Taxpayer Impact: The competitive bidding process for this contract is beneficial for taxpayers as it likely resulted in a more cost-effective solution compared to a sole-source award. The government was able to leverage market forces to obtain better value for the funds expended.

Public Impact

Beneficiaries include federal employees and contractors who rely on stable IT infrastructure for operations. Services delivered likely encompass IT support, maintenance, and management of computer facilities. The geographic impact is primarily within the operational areas of the Centers for Medicare and Medicaid Services. Workforce implications may include the need for skilled IT professionals to manage and maintain these systems.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Contract duration is lengthy, requiring sustained oversight to ensure continued value.
Scope creep could increase costs if not managed effectively.
Reliance on a single contractor for critical IT functions presents potential single points of failure.

Positive Signals

Competitive award process suggests a fair market price was likely achieved.
Fixed-price contract type incentivizes contractor efficiency.
The award was made to a known entity, Peraton Enterprise Solutions LLC, suggesting a track record.

Sector Analysis

This contract falls within the IT services sector, specifically Computer Facilities Management. The federal IT services market is vast, with agencies consistently investing in maintaining and upgrading their technological infrastructure. Contracts of this magnitude are common for agencies like HHS, which manage complex data and systems. Comparable spending benchmarks would typically look at the total IT spending of CMS or HHS annually, and the proportion allocated to facilities management.

Small Business Impact

The provided data does not indicate if this contract included small business set-asides or subcontracting goals. As a competitive delivery order, it's possible that small businesses could have participated as prime contractors or subcontractors. Further analysis would be needed to determine the extent of small business involvement and its impact on the small business ecosystem.

Oversight & Accountability

Oversight for this contract would typically be managed by the contracting officer and program managers within the Centers for Medicare and Medicaid Services. Accountability measures are embedded in the contract terms, including performance standards and reporting requirements. Transparency is generally facilitated through contract databases like FPDS-NG. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

HHS IT Modernization
CMS IT Infrastructure Support
Federal Civilian IT Services
Information Technology Management Services

Risk Flags

Long contract duration requires sustained oversight.
Potential for scope creep in IT services.
Technological obsolescence risk over contract term.

Frequently Asked Questions

What is this federal contract paying for?

Department of Health and Human Services awarded $251.7 million to PERATON ENTERPRISE SOLUTIONS LLC. TAS::75 0511::TAS

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 Medicare and Medicaid Services).

What is the total obligated amount?

The obligated amount is $251.7 million.

What is the period of performance?

Start: 2007-01-19. End: 2014-06-15.

What is the specific track record of Peraton Enterprise Solutions LLC with the Department of Health and Human Services?

Peraton Enterprise Solutions LLC has a history of performing IT services for various federal agencies, including HHS. Analyzing their past performance with HHS would involve reviewing previous contracts, performance evaluations (e.g., Contractor Performance Assessment Reporting System - CPARS), and any documented issues or successes. This specific contract, awarded in 2007 and ending in 2014, represents a significant engagement. Understanding their performance on this and other HHS contracts would provide insight into their reliability, technical capabilities, and ability to meet contractual obligations within the healthcare sector.

How does the awarded price compare to market rates for similar IT facilities management services?

A precise comparison of the $251.7 million award to market rates for Computer Facilities Management Services (NAICS 541513) is complex without granular data on the specific services rendered, service levels, and geographic locations. However, the contract's competitive nature, with five bids received, suggests that the pricing was likely vetted against multiple market offerings. To conduct a thorough benchmark, one would need to analyze industry reports on IT service costs, consult with industry experts, and compare the contract's scope against similar government or commercial contracts awarded around the same period (2007-2014).

What are the primary risks associated with a long-term (2704 days) fixed-price contract for IT facilities management?

A significant risk with a long-term, fixed-price IT facilities management contract is the potential for scope creep and the contractor's ability to adapt to evolving technological landscapes. If the contract's scope is not rigidly defined and managed, the government might end up paying more for services that were not originally envisioned. Conversely, the contractor bears the risk of cost overruns if their initial pricing was too low or if unforeseen technical challenges arise. Technological obsolescence is another risk; the services and equipment provided under a contract spanning over seven years could become outdated, requiring careful management and potential modifications to ensure continued relevance and effectiveness.

How effective has the Centers for Medicare and Medicaid Services (CMS) been in managing its IT infrastructure contracts historically?

CMS has a complex history with IT contract management, marked by both successes and significant challenges. Agencies like CMS, responsible for vast and critical healthcare programs, rely heavily on robust IT systems. Historically, CMS has faced scrutiny over large IT projects, including cost overruns and schedule delays, particularly in areas like the Healthcare.gov platform. However, they have also executed numerous successful contracts for essential services. Evaluating the effectiveness of this specific $251.7 million contract would require examining its performance metrics, adherence to schedule and budget, and its contribution to CMS's overall IT operational stability during its term.

What has been the trend in federal spending on Computer Facilities Management Services (NAICS 541513) over the past decade?

Federal spending on Computer Facilities Management Services (NAICS 541513) has generally remained substantial, reflecting the ongoing need for agencies to manage and maintain their IT infrastructure. While specific trends can fluctuate based on budget appropriations, technological shifts (e.g., cloud adoption), and agency priorities, the overall demand for these services has been consistent. Agencies continue to invest in hardware maintenance, data center operations, network management, and related support functions. Analyzing historical spending data from sources like FPDS-NG would reveal year-over-year changes and highlight any significant increases or decreases in this category of IT spending.

Were there any performance issues or contract disputes associated with this specific delivery order?

Information regarding specific performance issues or contract disputes for this particular delivery order (awarded 2007, ended 2014) is not directly available in the provided summary data. Such details are typically found in contract performance reports (like CPARS), agency procurement records, or potentially in legal filings if disputes escalated. Without access to these detailed records, it's impossible to definitively state whether performance issues or disputes occurred. However, the contract's completion without apparent major public red flags suggests it was likely managed to a satisfactory conclusion.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Computer Systems Design and Related Services › Computer Facilities Management Services

Product/Service Code: SUPPORT SVCS (PROF, ADMIN, MGMT) › PROFESSIONAL SERVICES

Competition & Pricing

Extent Competed: COMPETITIVE DELIVERY ORDER

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Offers Received: 5

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Veritas Capital Fund Management, L.L.C. (UEI: 078628925)

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

Business Categories: Category Business, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $251,712,671

Exercised Options: $251,712,671

Current Obligation: $251,712,671

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Parent Contract

Parent Award PIID: HHSM500200600002I

IDV Type: IDC

Timeline