DoD Civilian Payroll System Support contract awarded to Peraton for over $30.5M, spanning 5 years

Contract Overview

Contract Amount: $30,533,507 ($30.5M)

Contractor: Peraton Enterprise Solutions LLC

Awarding Agency: Department of Defense

Start Date: 2021-10-01

End Date: 2026-09-30

Contract Duration: 1,825 days

Daily Burn Rate: $16.7K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 3

Pricing Type: LABOR HOURS

Sector: IT

Official Description: DEFENSE CIVILIAN PAYROLL SYSTEM SUPPORT

Place of Performance

Location: INDIANAPOLIS, MARION County, INDIANA, 46249

State: Indiana Government Spending

Plain-Language Summary

Department of Defense obligated $30.5 million to PERATON ENTERPRISE SOLUTIONS LLC for work described as: DEFENSE CIVILIAN PAYROLL SYSTEM SUPPORT Key points: 1. Contract value appears reasonable given the 5-year duration and scope of IT support services. 2. Full and open competition suggests a competitive bidding process, potentially leading to better pricing. 3. The contract's duration and complexity present moderate performance risks. 4. This contract supports a critical function within the Department of Defense's financial operations. 5. The IT services sector is characterized by rapid technological change, requiring adaptable support. 6. Spending on similar IT support contracts can vary significantly based on specific requirements and market conditions.

Value Assessment

Rating: good

The contract's total value of approximately $30.5 million over five years averages to about $6.1 million annually. This figure seems within a reasonable range for comprehensive IT support services for a large federal system like the Defense Civilian Payroll System. Benchmarking against similar large-scale IT support contracts within the federal government would provide a more precise value-for-money assessment, but initial indications suggest fair pricing for the scope of work.

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. The presence of 3 bidders suggests a moderate level of competition for this requirement. While more bidders could potentially drive prices lower, a competitive process was still employed, which is generally favorable for price discovery and ensuring a fair market price.

Taxpayer Impact: Taxpayers benefit from a competitive bidding process that aims to secure the best value for the government. Full and open competition increases the likelihood that the awarded price reflects market rates and that the chosen contractor offers the most effective solution.

Public Impact

Serves approximately 1.5 million Department of Defense civilian employees by ensuring accurate and timely payroll processing. Delivers essential IT infrastructure and application support for a critical national defense function. The primary geographic impact is national, supporting a federal system with nationwide reach. Requires a skilled IT workforce for maintenance, development, and operational support of the payroll system.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for scope creep in IT projects if requirements are not clearly defined and managed.
Reliance on a single contractor for critical payroll system support could pose a risk if performance issues arise.
The dynamic nature of IT requires continuous adaptation to new technologies and security threats.

Positive Signals

Awarded through full and open competition, suggesting a robust selection process.
The contract has a defined duration, allowing for periodic reassessment of needs and contractor performance.
The Defense Finance and Accounting Service (DFAS) likely has established oversight mechanisms for such critical systems.

Sector Analysis

The IT services sector, particularly within the defense industry, is a large and complex market. Contracts for system support and maintenance are common, with values ranging widely based on system criticality and scope. This contract fits within the broader category of government IT support services, which is a significant portion of federal IT spending. Comparable spending benchmarks for large-scale payroll system support contracts can be found across various federal agencies.

Small Business Impact

This contract was not specifically set aside for small businesses, and there is no indication of significant subcontracting opportunities for small businesses within the provided data. The primary contractor, Peraton Enterprise Solutions LLC, is a large business. Further analysis would be needed to determine if any small business subcontracting plans are part of the contract's terms.

Oversight & Accountability

Oversight for this contract would typically fall under the purview of the Defense Finance and Accounting Service (DFAS), the contracting agency. Mechanisms likely include regular performance reviews, milestone tracking, and adherence to service level agreements. Transparency is generally maintained through federal contract databases, and the Inspector General's office would have jurisdiction over any potential fraud, waste, or abuse.

Related Government Programs

DoD Payroll Systems
Federal Civilian Payroll Processing
Defense Finance and Accounting Service Contracts
Large-Scale IT Support Services
Government IT Infrastructure Management

Risk Flags

Potential for scope creep due to broad service classification.
Reliance on a single vendor for critical system support.
Need for continuous adaptation to evolving IT security threats.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $30.5 million to PERATON ENTERPRISE SOLUTIONS LLC. DEFENSE CIVILIAN PAYROLL SYSTEM SUPPORT

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 (Defense Finance and Accounting Service).

What is the total obligated amount?

The obligated amount is $30.5 million.

What is the period of performance?

Start: 2021-10-01. End: 2026-09-30.

What is the historical spending trend for the Defense Civilian Payroll System (DCPS) support?

Analyzing historical spending for the DCPS support is crucial for understanding long-term investment and identifying potential cost efficiencies or escalations. While the provided data focuses on a single delivery order valued at over $30.5 million from October 2021 to September 2026, it represents a segment of the overall DCPS lifecycle costs. To establish a trend, one would need to examine previous contracts for DCPS support, including their values, durations, and the scope of services provided. This would involve querying federal procurement databases like FPDS or USASpending for prior awards related to 'Defense Civilian Payroll System' or similar keywords. Understanding the historical spending pattern allows for a more informed assessment of the current contract's value and whether spending has increased, decreased, or remained stable relative to inflation and system modernization efforts.

How does the awarded price compare to industry benchmarks for similar IT support services?

Benchmarking the awarded price of approximately $30.5 million over five years against industry standards for similar IT support services requires detailed analysis of the contract's specific deliverables. The contract covers 'Other Computer Related Services' (NAICS 541519) and is labor-hour based, suggesting flexibility but also potential variability in cost. To perform a robust comparison, one would need to identify comparable contracts within the federal government or the private sector that involve payroll system maintenance, IT infrastructure support, and application development for large organizations. Key metrics for comparison would include cost per labor hour for different skill sets, total contract value as a percentage of system criticality or user base, and the cost of maintaining similar systems. Without specific details on the labor mix, skill levels, and the exact scope of services (e.g., help desk, system administration, cybersecurity, software development), a precise benchmark is challenging. However, the annual average of ~$6.1 million suggests a significant investment, necessitating a detailed comparison with peer contracts to validate value for money.

What are the key performance indicators (KPIs) and service level agreements (SLAs) associated with this contract?

Key Performance Indicators (KPIs) and Service Level Agreements (SLAs) are critical components of any IT support contract, especially for a mission-essential system like the Defense Civilian Payroll System (DCPS). While not detailed in the provided summary data, these would typically be outlined in the contract's Statement of Work (SOW) or Performance Work Statement (PWS). For DCPS support, KPIs might include metrics such as payroll processing accuracy rates (e.g., less than 0.01% error rate), system uptime percentages (e.g., 99.9% availability), response times for critical issue resolution (e.g., critical issues resolved within 4 hours), and help desk ticket resolution times. SLAs define the acceptable performance thresholds for these KPIs and often include remedies or penalties for non-compliance, such as financial deductions or contract termination clauses. The effectiveness of the contractor's performance is directly measured against these agreed-upon standards, providing a framework for accountability and ensuring the continued reliable operation of the payroll system.

What is the contractor's track record with similar large-scale federal IT support contracts?

Peraton Enterprise Solutions LLC has a significant track record in providing IT services to the federal government, including large-scale contracts. Their experience spans various agencies and domains, often involving complex systems integration, cybersecurity, and mission support. To assess their specific track record for payroll systems, one would need to examine past performance evaluations and contract awards related to similar financial or HR IT systems within DoD or other federal agencies. Publicly available data, such as past performance reviews in contract databases or news releases about major contract wins, can provide insights. A review of Peraton's portfolio might reveal experience with systems requiring high levels of security, reliability, and data integrity, which are paramount for payroll processing. Evaluating their performance on previous, comparable contracts—looking at factors like on-time delivery, budget adherence, and quality of service—is essential for gauging their capability to successfully execute the DCPS support contract.

What are the potential risks associated with the 'Other Computer Related Services' classification?

The 'Other Computer Related Services' (NAICS 541519) classification is broad and encompasses a wide range of IT activities beyond standard software development or hardware maintenance. This breadth can introduce risks if the specific requirements of the DCPS support are not clearly defined within the contract. Potential risks include scope creep, where the contractor undertakes tasks not originally envisioned, leading to cost overruns or schedule delays. There's also a risk of misinterpretation of requirements, potentially leading to the delivery of services that don't fully meet the agency's needs. Furthermore, this classification might encompass specialized services that require unique expertise, and the government needs to ensure the contractor possesses the necessary skills and certifications. Effective risk mitigation involves a detailed Statement of Work (SOW) with clearly delineated tasks, deliverables, and acceptance criteria, alongside robust contract management and oversight to ensure the contractor stays within the defined scope and meets all performance expectations.

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 › IT AND TELECOM - PLATFORM

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Solicitation ID: HQ042321R0010

Offers Received: 3

Pricing Type: LABOR HOURS (Z)

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: $31,815,462

Exercised Options: $31,815,462

Current Obligation: $30,533,507

Subaward Activity

Number of Subawards: 27

Total Subaward Amount: $2,639,346

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: W52P1J18DA082

IDV Type: IDC

Timeline