Treasury's $50.5M IT support contract awarded to Peraton Enterprise Solutions shows fair value despite limited competition

Contract Overview

Contract Amount: $50,516,586 ($50.5M)

Contractor: Peraton Enterprise Solutions LLC

Awarding Agency: Department of the Treasury

Start Date: 2015-04-01

End Date: 2023-04-30

Contract Duration: 2,951 days

Daily Burn Rate: $17.1K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: IGF::CT::IGF FOR CRITICAL FUNCTIONS - PC REPLACEMENT AND SUPPORT SERVICES

Place of Performance

Location: HERNDON, FAIRFAX County, VIRGINIA, 20171

State: Virginia Government Spending

Plain-Language Summary

Department of the Treasury obligated $50.5 million to PERATON ENTERPRISE SOLUTIONS LLC for work described as: IGF::CT::IGF FOR CRITICAL FUNCTIONS - PC REPLACEMENT AND SUPPORT SERVICES Key points: 1. Contract value of $50.5M over 8 years suggests a moderate annual spend for IT support services. 2. Awarded via full and open competition, indicating a broad search for qualified vendors. 3. The contract's duration of nearly 8 years may present risks related to technology obsolescence and vendor lock-in. 4. Fixed-price contract type helps mitigate cost overrun risks for the government. 5. Services are categorized under Computer Systems Design, a common IT support function. 6. The contract is managed by the Office of the Comptroller of the Currency, a key Treasury bureau.

Value Assessment

Rating: good

The contract's total value of $50.5M over approximately 8 years equates to an average annual spend of roughly $6.3M. Benchmarking this against similar IT support contracts is challenging without more granular data on the specific services provided. However, the firm fixed-price structure suggests the government aimed to secure predictable costs. The number of bids received (1) is a key factor in assessing value, and if this was the only bid, it raises questions about whether the government secured the best possible price.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, which theoretically allows any interested and capable vendor to bid. However, only one bid was received. This could indicate a highly specialized service, a challenging bidding process, or a lack of market interest. While the competition was open, the low number of bids limits the government's ability to leverage market dynamics for optimal price discovery.

Taxpayer Impact: A single bid in an open competition suggests that taxpayers may not have benefited from the full range of competitive pricing that a more robust bidding process could have yielded.

Public Impact

The Office of the Comptroller of the Currency (OCC) benefits from continuous IT support for its critical functions. This contract ensures the availability and maintenance of essential computer systems. The services likely support OCC operations nationwide, impacting federal financial regulation. IT professionals employed by Peraton Enterprise Solutions are involved in delivering these services.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Low number of bids (1) despite full and open competition raises concerns about market interest and potential price inflation.
Long contract duration (nearly 8 years) increases the risk of technology obsolescence and potential vendor lock-in.
Lack of specific performance metrics or quality data makes it difficult to assess the effectiveness of the services provided.

Positive Signals

Firm fixed-price contract type provides cost certainty and protects taxpayers from potential cost overruns.
Awarded under full and open competition, which theoretically allows for the widest possible vendor pool.
The contract supports critical functions within the Department of the Treasury, indicating its importance.

Sector Analysis

This contract falls within the broader IT services sector, specifically Computer Systems Design Services. The federal IT services market is substantial, with agencies consistently investing in maintaining and upgrading their technological infrastructure. Contracts like this are crucial for ensuring the operational continuity of government functions. Benchmarking requires comparing it to other similar IT support and systems design contracts across federal agencies, considering factors like scope, duration, and service level agreements.

Small Business Impact

The data indicates that small business participation was not a stated set-aside for this contract (ss: false, sb: false). There is no information provided on subcontracting plans. Therefore, the direct impact on the small business ecosystem is likely minimal unless Peraton Enterprise Solutions voluntarily engages small businesses for subcontracting opportunities.

Oversight & Accountability

Oversight for this contract would typically be managed by the contracting officer and program managers within the Office of the Comptroller of the Currency. The firm fixed-price nature provides some cost control. Transparency is dependent on the public availability of contract details and performance reports. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

IT Infrastructure Support Services
Computer Systems Design Services
Federal IT Modernization Programs
Department of the Treasury IT Contracts
Office of the Comptroller of the Currency Operations

Risk Flags

Low Bidder Count
Long Contract Duration
Potential for Price Inflation due to Limited Competition

Frequently Asked Questions

What is this federal contract paying for?

Department of the Treasury awarded $50.5 million to PERATON ENTERPRISE SOLUTIONS LLC. IGF::CT::IGF FOR CRITICAL FUNCTIONS - PC REPLACEMENT AND SUPPORT 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 the Treasury (Office of the Comptroller of the Currency).

What is the total obligated amount?

The obligated amount is $50.5 million.

What is the period of performance?

Start: 2015-04-01. End: 2023-04-30.

What is the track record of Peraton Enterprise Solutions with federal IT contracts, particularly those of similar scope and value?

Peraton Enterprise Solutions, as a contractor, has a history of performing various IT services for the federal government. Analyzing their past performance on contracts with the Department of the Treasury or other agencies for computer systems design and support is crucial. Key metrics to examine would include on-time delivery, adherence to budget, quality of service, and any past performance issues or awards. Without specific data on Peraton's prior performance on comparable contracts, it's difficult to definitively assess their reliability for this specific $50.5M IGF contract. However, their continued awards suggest a general capability to meet federal requirements.

How does the pricing of this contract compare to similar IT support contracts awarded by the Treasury or other agencies?

Benchmarking the pricing of this $50.5M contract requires a detailed comparison with other federal contracts for Computer Systems Design Services (NAICS 541512) of similar duration and scope. Factors such as the specific services included (e.g., hardware maintenance, software support, network management, cybersecurity), the number of users supported, and the Service Level Agreements (SLAs) are critical. Given that only one bid was received under full and open competition, there's a risk that the pricing may not be as competitive as it could have been with multiple bidders. A thorough analysis would involve comparing the effective annual cost ($6.3M) against market rates for comparable IT support functions within the federal government.

What are the primary risks associated with a contract of this duration (nearly 8 years) for IT support services?

The primary risks associated with an IT support contract spanning nearly eight years include technological obsolescence, vendor lock-in, and potential degradation of service quality over time. Technology evolves rapidly, and systems or software supported under this contract could become outdated, requiring costly upgrades or replacements not fully accounted for in the original contract. Vendor lock-in can occur if the contractor becomes indispensable, making it difficult and expensive to switch providers. Furthermore, maintaining consistent service quality and innovation over such a long period can be challenging, potentially leading to decreased efficiency or increased user dissatisfaction if not actively managed and overseen.

How effective is the 'full and open competition' strategy when only one bid is received?

The effectiveness of 'full and open competition' is significantly diminished when only one bid is received. While the strategy itself is designed to maximize the pool of potential offerors and foster robust price competition, a single bid suggests potential issues. These could include a highly specialized requirement that only one firm can meet, a lack of market awareness or interest from other potential bidders, or overly restrictive solicitation terms. In such scenarios, the government loses the benefit of competitive pressure, potentially leading to higher prices and less innovation than if multiple bids had been submitted. It necessitates careful review to ensure the single bid represents fair market value.

What are the implications of the 'firm fixed price' contract type for managing IT support services?

The 'firm fixed price' (FFP) contract type is generally favored by the government for services where the scope of work is well-defined and stable, such as IT support. This structure places the primary risk of cost overruns on the contractor, providing the government with cost certainty. For taxpayers, this means the price agreed upon at the outset is the price paid, barring any approved modifications. However, it can also incentivize contractors to minimize costs, potentially impacting service quality if not carefully monitored through performance standards and oversight. It also means the government may not directly benefit from cost savings if the contractor performs more efficiently than anticipated.

How does this contract fit within the broader IT spending patterns of the Department of the Treasury?

This $50.5M contract for critical IT functions represents a significant, long-term investment by the Department of the Treasury, specifically the Office of the Comptroller of the Currency. Federal agencies, including Treasury, allocate substantial portions of their budgets to IT to maintain essential operations, modernize systems, and enhance cybersecurity. Analyzing this contract's value in the context of Treasury's overall IT budget and spending trends for similar services (e.g., systems design, maintenance, support) provides insight into the agency's priorities and resource allocation strategies. Its duration suggests a commitment to stable, ongoing support for core systems.

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: CC15HQR0003

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

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: $57,210,796

Exercised Options: $52,201,984

Current Obligation: $50,516,586

Actual Outlays: $23,566,498

Subaward Activity

Number of Subawards: 27

Total Subaward Amount: $2,205,605

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Parent Contract

Parent Award PIID: HHSN316201200026W

IDV Type: GWAC

Timeline