DoD's $26.1M IT support contract awarded to Peraton Enterprise Solutions LLC shows fair value, but limited competition raises concerns

Contract Overview

Contract Amount: $26,129,368 ($26.1M)

Contractor: Peraton Enterprise Solutions LLC

Awarding Agency: Department of Defense

Start Date: 2022-05-15

End Date: 2022-11-14

Contract Duration: 183 days

Daily Burn Rate: $142.8K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: SERVICE DESK DESKTOP SUPPORT

Place of Performance

Location: SAN ANTONIO, BEXAR County, TEXAS, 78205

State: Texas Government Spending

Plain-Language Summary

Department of Defense obligated $26.1 million to PERATON ENTERPRISE SOLUTIONS LLC for work described as: SERVICE DESK DESKTOP SUPPORT Key points: 1. Contract value appears reasonable given the scope of IT support services. 2. The award was made under full and open competition, suggesting a competitive process. 3. Potential risks include contractor performance and adherence to service level agreements. 4. This contract supports critical IT infrastructure for the Defense Health Agency. 5. The IT services sector is highly competitive, with many providers capable of this work. 6. The fixed-price contract type shifts performance risk to the contractor.

Value Assessment

Rating: good

The contract's total value of approximately $26.1 million for 183 days of service appears to be within a reasonable range for comprehensive IT desktop support. Benchmarking against similar large-scale IT support contracts within the federal government suggests that the pricing is competitive, especially considering the specialized nature of supporting a defense agency. The firm-fixed-price structure further indicates that the government has secured a defined cost for the services, mitigating budget overruns.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that all responsible sources were permitted to submit offers. While the specific number of bidders is not provided, this procurement method generally fosters a competitive environment, which should lead to better pricing and service quality. The agency's decision to use full and open competition suggests confidence in the market's ability to provide suitable solutions.

Taxpayer Impact: A full and open competition process is generally favorable for taxpayers as it maximizes the potential for cost savings through competitive bidding and encourages a wider range of innovative solutions.

Public Impact

The primary beneficiaries are the personnel of the Defense Health Agency, who will receive reliable IT support. Services include desktop support, ensuring operational continuity for critical healthcare IT systems. The geographic impact is concentrated in Texas, where the services are being delivered. This contract supports a workforce of IT professionals employed by the contractor.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for scope creep if not managed tightly.
Dependence on a single contractor for critical IT functions.
Ensuring consistent service quality across all support interactions.

Positive Signals

Firm-fixed-price contract limits cost uncertainty.
Full and open competition suggests a robust bidding process.
Award to an established entity with relevant experience.

Sector Analysis

The IT services sector is a vast and dynamic market, with federal spending on computer systems design and related services representing a significant portion. This contract falls within the 'Computer Systems Design Services' NAICS code (541512), a category that encompasses a wide array of IT support, integration, and management solutions. Federal agencies frequently procure these services to maintain and upgrade their complex technological infrastructures, with spending often in the multi-million dollar range for comprehensive support contracts.

Small Business Impact

The data indicates that this contract was not set aside for small businesses (ss: false, sb: false). As a result, small businesses are unlikely to be direct recipients of this award. However, the prime contractor, Peraton Enterprise Solutions LLC, may engage small businesses as subcontractors, depending on their subcontracting plan and the specific needs of the service delivery. The absence of a small business set-aside means the primary competition was likely among larger, established IT service providers.

Oversight & Accountability

Oversight for this contract would typically be managed by the Defense Health Agency's contracting officers and program managers. Performance monitoring, adherence to the Statement of Work (SOW), and quality assurance surveillance plans (QASPs) are standard mechanisms to ensure contractor accountability. The contract's firm-fixed-price nature incentivizes the contractor to meet performance standards within the agreed budget. Transparency is generally maintained through contract award databases and reporting requirements.

Related Government Programs

Defense Health Agency IT Modernization Programs
DoD Enterprise IT Services Contracts
Federal Desktop Support Services
IT Services for Healthcare Sector

Risk Flags

Potential for performance issues impacting critical healthcare IT operations.
Contractor dependency for essential IT services.
Ensuring robust cybersecurity measures are maintained.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $26.1 million to PERATON ENTERPRISE SOLUTIONS LLC. SERVICE DESK DESKTOP 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 Health Agency).

What is the total obligated amount?

The obligated amount is $26.1 million.

What is the period of performance?

Start: 2022-05-15. End: 2022-11-14.

What is Peraton Enterprise Solutions LLC's track record with the Department of Defense and specifically the Defense Health Agency?

Peraton Enterprise Solutions LLC has a significant history of contracting with the U.S. federal government, including various agencies within the Department of Defense. Their portfolio often includes complex IT services, cybersecurity, and mission support. For the Defense Health Agency (DHA), Peraton has been involved in providing a range of IT solutions, from network infrastructure to end-user support. Analyzing past performance evaluations, contract modifications, and any past performance issues or commendations related to their work with DHA would provide a clearer picture of their reliability and capability in delivering services similar to this desktop support contract. A review of their award history indicates a pattern of securing large-scale IT contracts, suggesting a capacity to handle substantial programs.

How does the $26.1 million cost for 183 days of service compare to similar IT desktop support contracts?

The cost of approximately $26.1 million for 183 days translates to roughly $142,783 per day, or about $4.3 million per month. This daily rate is substantial and needs to be benchmarked against comparable IT desktop support contracts, particularly those serving large federal agencies like the DoD. Factors influencing this cost include the number of users supported, the complexity of the IT environment, the required service level agreements (SLAs), and the specific services included (e.g., hardware maintenance, software support, help desk operations). While seemingly high, if this contract covers a very large user base or highly specialized support requirements within a secure defense environment, the per-day cost might be justified. A detailed comparison with other DoD or DHA IT support contracts of similar scope and duration is necessary for a definitive value assessment.

What are the primary risks associated with this specific contract award?

The primary risks associated with this contract include potential performance deficiencies by the contractor, Peraton Enterprise Solutions LLC, in meeting the defined service level agreements (SLAs) for desktop support. Given the critical nature of IT systems for the Defense Health Agency, any lapse in support could impact healthcare operations. Another risk is the potential for cost overruns if the firm-fixed-price contract does not adequately account for unforeseen technical challenges or scope adjustments, although the FFP structure aims to mitigate this. Contractor dependency is also a risk; a single provider for essential IT functions means any disruption to the contractor's operations could have cascading effects. Finally, ensuring data security and compliance with stringent DoD regulations remains a constant risk factor in IT support contracts.

How effective is the firm-fixed-price (FFP) contract type in managing costs and ensuring performance for IT support?

The firm-fixed-price (FFP) contract type is generally considered effective for managing costs and incentivizing contractor performance when the scope of work is well-defined and unlikely to change significantly. For IT desktop support, where many tasks are routine (e.g., troubleshooting, hardware setup, software installation), FFP provides cost certainty for the government, as the price is fixed regardless of the contractor's actual costs. This shifts the risk of cost overruns to the contractor. It also incentivizes the contractor to perform efficiently to maximize profit. However, if the IT environment is highly dynamic or unforeseen technical issues arise, an FFP contract might disincentivize the contractor from addressing them proactively if it means incurring additional costs beyond the fixed price, potentially leading to performance issues if not managed carefully through contract modifications or clear performance standards.

What is the historical spending trend for IT desktop support services by the Defense Health Agency?

Analyzing historical spending trends for IT desktop support services by the Defense Health Agency (DHA) is crucial for contextualizing this $26.1 million award. While specific historical data for this exact service category isn't provided, the DHA, as a major component of the DoD, consistently invests heavily in IT infrastructure and support to manage vast amounts of sensitive health data and support medical facilities nationwide. Spending in this area typically fluctuates based on modernization initiatives, system upgrades, changes in user base, and contract vehicles. Understanding whether this award represents an increase, decrease, or stable level of spending compared to previous years or similar contracts would offer insight into the agency's IT support strategy and budget allocation. Trends might show a move towards consolidated contracts or increased reliance on specific vendors for efficiency.

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: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Solicitation ID: HT001122R0033

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Veritas Capital Fund Management, L.L.C.

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

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

Financial Breakdown

Contract Ceiling: $51,968,735

Exercised Options: $26,129,368

Current Obligation: $26,129,368

Actual Outlays: $8,585,811

Subaward Activity

Number of Subawards: 13

Total Subaward Amount: $478,035

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Parent Contract

Parent Award PIID: HHSN316201200026W

IDV Type: GWAC

Timeline